When Did Sports Betting Become Illegal in America?

One of the most hotly contested issues in sports betting is whether or not it is legal to wager on sporting events in America. Some states, like Nevada (home of the Las Vegas) and Delaware (where there is a big gaming industry), have fully legalized sports betting. But in most places, it is still considered to be a taboo activity, with local authorities often going to great lengths to shut down legal sportsbooks. Below, we will discuss when exactly sports betting became illegal in America.

NFL Was the First to Ban Sports Betting

The first recorded case of professional sports betting in America occurred in 1926, when the Philadelphia Eagles were banned from playing at the Polo Grounds in New York City because of crowd disturbances allegedly caused by the players betting on the game. Professional footballers were the first to raise a legal objection to sports betting, arguing that it could taint their integrity as athletes. The following season, the New York Yankees protested an entire game between the Boston Red Sox and Chicago White Sox, because the Sox had placed a few dollar bets on the game. The protest was eventually dropped after the NFL threatened to revoke the Chicago franchise’s license. The White Sox also dropped their protest after the Yankees promised not to publicize the incident.

The NFL was quick to realize the commercial potential of betting on their games, and several weeklies reported that the league was accepting wagers on all their games during the 1930s and early 1940s. In 1933, the NFL ruled that teams had to furnish weekly odds on weekly football games, and in 1940, they further restricted wagering on professional football to games between 6 pm and 10 pm ET on Sunday nights.

MLB Followed Suit With More Restrictions

Major League Baseball was quick to see the potential of sports betting, and they too restricted the activity, initially only allowing wagering on World Series games. In 1946, the St. Louis Cardinals were even fined $500 for allowing fans to wager on a spring training game against the Pirates. In the 1950s, the Chicago White Sox and New York Giants became the first two major professional sports teams to legally wager on baseball when they opened sportsbooks in the 1960s, which was shortly after the Supreme Court ruled that pro baseball was a “professional sport” deserving of protection under the Sherman Antitrust Act.

IRLEA Banned It

The Interstate Racing Law Enforcement and Athlete Protection Act was enacted in Congress in 1992, with the stated purpose of protecting “the integrity of horseracing and thoroughbred breeding.” The law was sponsored by the Thoroughbred Racing Association (TRI) and the American Thoroughbred Racing Association (ATRA) and was introduced after a series of scandals that tainted the image of American horse racing. The primary aim of the ban was to outlaw sports betting everywhere except in Nevada and a few other states that allowed it prior to 1992.

Under the ban, it is illegal to wager on sporting events that are held in Nevada and six other states: California, Florida, Montana, Nevada, New York, and Texas. It is also illegal for any individual, business, or entity to openly promote or advertise sports gambling. Additionally, it is against the law for any individual, business, or entity to work in the sports betting industry, or to provide any sort of service for others, with the intent to engage in illegal sports gambling. Breaking any of these laws carries serious penalties that include up to a year in prison and a $10,000 fine.

The federal government largely respects the ban, issuing only occasional reminders that it is still illegal to wager on sporting events that take place in the country. But there have been a number of court cases that have challenged the constitutionality of the ban, with most courts ruling that it is indeed unconstitutional.

Gambling Is Now Legal In All States

With the exception of Nevada and the five other states that have continued legal sports betting, gambling is now legal in all 50 states. This is largely due to the efforts of the gaming industry, which lobbied hard to get legal gambling established in every state. The numbers also show that the majority of Americans now live in states that allow some form of legal gambling. In 2018, there were 425,000 online poker accounts registered in Nevada, while there were only 110,000 registered in Texas. It is also important to keep in mind that in most states, including those where sports betting is illegal, a standalone casino or sportsbook cannot be operated without a gambling license from the state. This makes sports betting businesses highly regulated, and it restricts their operations to specific places, such as race tracks and concert venues.

Which States Have Fully Legalized Sports Betting?

As mentioned above, Nevada and the other five states that allow sports betting continue to be the only five states that have fully legalized the activity. But that could be about to change. Last year, the Republican-controlled Senate passed a bill that would have eliminated the federal prohibition on sports betting in all 50 states. The bill, which was co-sponsored by Iowa Senator Chuck Grassley, died in the Democrat-controlled House. But this year, the House and the Senate are once again considering similar legislation that would end the prohibition in most states. A similar bill was also introduced last year in Oklahoma. And just this month, the bipartisan group of Oklahoma State Representative Chuck Grooms (R) and Senator Kelly Armstrong (R) reintroduced their bill, H.B. 1039, which would exempt most sportsbooks and casinos from the federal prohibition on sports betting. The bill would also allow individuals to voluntarily admit to participating in past criminal conduct, which is a requirement under federal law for someone to open a bank account or join a financial institution.

Will Sports Betting Remain Illegal In All States?

The bill that was introduced last year would have allowed Nevada sportsbooks and casinos to continue operating freely, without fear of federal prosecution. But this year, efforts to legalize sports betting have once again been met with fierce opposition from the NFL. The league fears that legal sports betting will taint the fabric of professional football, and they have been one of the primary forces behind the push to have sports betting remain illegal, at least in the majority of states. But that is likely to change. As the technology of betting on games spreads to more and more states, it is becoming harder for the NFL to maintain their stance of opposition to legalized sports betting. Even the powerful NBA has come out in support of legalizing sports betting.

On the other side of the Coin, the NCAA has long opposed legalizing sports betting, fearing that it will lead to more gambling, especially among athletes and student-athletes. But with the exception of Nevada and a few other states, the NCAA is not a major player in the anti-sports betting movement anymore, as most of their member institutions have either opened sportsbooks or accepted wagers in some form or another. In 2018, the NCAA even allowed its members to offer bonus prizes and benefits to prospective athletes, in an effort to sway them to choose a career in sports. “You could look at our new sport scholarship, where we are matching young people with big ideas and athletic potential with the resources to make their dreams a reality,” NCAA president Mark Emmert said at the time. “Or you could look at our new performance-based contracts, where we are incentivizing student-athletes to achieve excellence on the field and in the classroom. Those are exciting times for our sport.”

While the efforts to have sports betting remain illegal have once again been met with success, the fight for legal sports betting in America will continue to be fiercely contested. But as the underlying motivations behind the bill, H.B. 1039, demonstrate, this is really just a battle for the next best thing. While the fight rages on, the tide is undeniably turning in favor of sports betting, especially considering that the majority of Americans now live in states where it is legal. At least for now.