What’s the Deal with 3-Way Betting?

Bets made on sports events between two competitors are fairly commonplace. But what if those bets involve not one, but two teams?

In some parts of the world (and within certain states in the U.S.), betting on sports involving more than two teams is not legal. That’s because these kinds of bets are considered “three-way” bets, or propositions bets. Generally speaking, three-way bets are illegal in the U.S. because of the Interstate Bookmaking Act of 1951. But what exactly is a three-way bet and why are they disallowed by federal law? Let’s take a gander.

Understanding 3-Way Betting

When you place a three-way bet, you are placing a bet on two competing sides of an event (like the Super Bowl) and the outcome of that event. For example, you might bet on the New York Giants (one of the teams in the NFL) to beat the San Francisco 49ers (the other team in the NFL), as well as on the Kansas City Chiefs (the other team in the AFC) to beat the Indianapolis Colts (the other team in the AFC).

Three-way bets can be difficult to wade through because you have to keep track of three separate sets of outcomes. If you’re not used to thinking in terms of probabilities, it can be hard to gauge exactly how much you should wager on each side. When you make a three-way wager, you must do so responsibly. As with any other wager, you can bet responsibly or irresponsibly. It’s all about how you want to approach it — and maybe what limits you want to set for yourself.

Why Are 3-Way Betting Limits Put In Place?

The Interstat Bookmaking Act of 1951 was intended to combat the organized crime that was prevalent in the sports betting industry during the early part of the 20th century. But while the goal of that law was to keep bookmakers from conspiring to fix games and games results, it also had the unintended consequence of prohibiting some people from placing three-way bets. Specifically, it disallows the placing of bets on “two or more sporting events involving different athletic teams,” or on “two or more teams of a professional athletic league.”

In the grand scheme of things, this law was a pretty reasonable way to govern sports betting. Back then, there was no such thing as “pari-mutuel” betting, where people competed to see who could wager the most on sports events. If you didn’t want to get in trouble with the law, it was best to avoid making three-way bets. If you did anyway, you were often met with harsh penalties. For instance, in some states in the U.S., bookmakers who accepted three-way bets face up to 10 years in prison.

Things have changed dramatically since the early part of the 20th century. Today, many big cities, including New York City, have legal sportsbooks where you can place wagers on all types of sporting events. If you live in one of these bigger cities, it’s quite possible you’ve already risked exposure to legal gambling by placing a few bets here and there. But as long as you keep your wins and losses secret, you shouldn’t have any problems. This is especially true if you’re betting on NFL games, as those are regularly settled by the end of the year. So if you live in a city where NFL games are televised, you usually know the score by the end of the third quarter anyway.

What About Internet Gambling And Daily Fantasy Sports?

It’s been well over a decade since the Unlawful Internet Gambling Enforcement Act of 2010 was passed, which sought to prohibit online gambling businesses from operating within the United States. But while that law was specifically designed to put a stop to online sports betting, it also had the effect of prohibiting wagering on all professional sporting events (including the NFL) within the United States. This means that while it’s now legal to bet on sports in some parts of the country, it’s still illegal to make a three-way bet.

To get around the UIGEA, online sportsbooks have set up shop outside the United States. This means that while gamblers in the U.S. are generally restricted to placing wagers on sports events that are broadcast on free television, people from abroad can still place wagers on any sporting event that they choose. And given the size of the international online gambling community, this is often enough to satisfy the desires of even the most ardent sports bettor.

You don’t have to look very far to find evidence of major organized crime activity in the industry. Back in 2015, the New York Attorney General’s office revealed that it had received more than 500 complaints about three-way betting websites from around the world. And that was just one branch of law enforcement. The complaints ranged from the relatively minor (someone winning or losing money due to bad gameplay or technical glitches) to the extreme (organized crime groups manipulating games and the like).

In response to the UIGEA, daily fantasy sports was created to provide a safe and legal alternative for sports betting. Essentially, daily fantasy sports is a variation of fantasy sports (the former is based on actual sports results while the latter is based on players’ statistics). What’s amazing is that while legal, daily fantasy sports websites take the guesswork out of picking profitable sports and players to bet on, all you need is an email address to get started.

Based on your specific knowledge of the NFL (or any professional sport for that matter), you can choose players and setups that you think are most likely to score points. For example, if you thought the Pittsburgh Steelers were going to steamroll their way to a victory in a certain matchup, you can create a daily fantasy team made up solely of players from that squad and set your wager on that game’s outcome. That way, you can be sure that your money is protecting you from illegal activity. It’s quite a relief to know that if you’re playing at an underground sportsbook or via an unofficial online partner, your money is not at risk.

Where Can I Bet On The Super Bowl?

For those of you who are looking to place a wager on this year’s Super Bowl, you might be wondering where and how to do so legally. Thanks to the 2018 UIGEA repeal bill, which reversed the prohibition on sports betting imposed by the 2010 law, it’s now possible to place wagers on the Super Bowl. As long as you keep your winnings below $2,500, you shouldn’t have any legal issues. It’s also advisable to bet responsibly, as the more you wager, the greater the exposure you have to risk.

While it is now legal to bet on the Super Bowl, there are still some restrictions. For instance, you can only bet on the big game between New Jersey and Pennsylvania. Similarly, you cannot bet on the outcome of an AFL game or on a game between an NCAA team and a non-institutional team (like a high school or youth football team).

Remember: Everything You Need For Legal Betting

When you make a wager, you have to have everything there. This means that you need to have a banking record, valid identification, and a credit card. Because of the nature of the business, you also need to keep a close eye on your gambling activity. That way, you can be sure that your winnings are properly recorded and declared as taxable income. If you don’t, then you’re in for a big surprise when the I.R.S. comes calling.

In the grand scheme of things, the Interstate Bookmaking Act of 1951 was a pretty reasonable law when it was originally passed. It was also one of the first laws that effectively de-criminalized certain types of gambling. Back in those days, placing a wager on a sports event was often met with legal consequences. Now, placing a wager on the Super Bowl is perfectly acceptable, and even legal in certain parts of the country.