When was Online Sports Betting Legalized in the United States?

The legality of sports betting in the United States has been in a state of flux since the first online sportsbooks were established in the early 2000s. The legality of internet gambling in general was also uncertain at the time, leaving bookmakers and fans alike in the dark regarding their sport’s officiating and outcome. In this article we will explore the rapid changes that took place in the sports betting landscape in America as a result of the 2010 Supreme Court case United States v. Vogel, which struck down a federal law that made online gambling illegal. In the wake of the decision, several states began to legalize online sports betting, leaving fans with a mixed bag of feelings.

Early Days Of Online Sports Betting

In the early days of online sports betting, illegal offshore sites were the only game in town, operating with impunity due to the anonymity they afforded their customers and the inability of states to effectively regulate internet gambling. Bookmakers, unable to keep up with the demand, started accepting wagers from online punters, setting off a rush to the online betting counter that continues to the present day.

The lack of uniformity among the then-six states that had prohibited online gambling led to the formation of the American Bookies Association in 2006, with the stated purpose of setting up a single online bookie for legal US internet casino gambling. By creating a central hub for online betting operations across the country, the ABAs’ efforts aimed at creating a seamless experience for online betters helped lay the groundwork for the legitimization of online sports betting nationally.

Legalization In Most States

The impetus for the legalization of online gambling in the United States came from the inability of states to effectively control and regulate internet gambling within their borders. As a result of the early internet pioneer’s desire to keep their services free from federal regulation, as well as the need for revenue generation following the Sept. 11, 2001 terror attacks, the USA’s first internet cafes opened in the mid-1990s, providing a means for people to engage in online gambling without breaking the law. The first legal land-based internet casino was launched in New York in August 1996, further establishing the popularity of this form of gambling in the US.

The Unites States Congress passed the Unlawful Activities Prevention Act of 1956, commonly known as the McClelland Act, which made it a federal offense, punishable by up to a decade in prison, to conduct, manage, supervise, or invest in an illegal gambling business. Since then, the number of states that have legalized or partially legalized online gambling has increased to 37, allowing gamblers to place bets on virtually any sporting event, from the Superbowl to the World Series, from the Pro Bowl to the NCAA tournament. In most states, betting on most professional sports is now legal, with the exception of a handful of sports, such as thoroughbred horse racing and greyhound racing in some states, that are still illegal to wager on.

However, the legality of online gambling remains uncertain in a couple of US states, namely Delaware and Nevada. The uncertainty surrounding the state of Delaware’s online gambling laws was made public in a 2006 US Department of Justice (DOJ) report that listed the state as one of the “top ten online gambling havens” in the country. The report also cited the state’s complicated web of legislation and regulations as the primary reason for its inclusion on the list, explaining that it was “difficult to ascertain exactly what laws and regulations apply to online gambling in Delaware.”

The lack of uniformity among the states that have legalized online gambling has created a bit of a quandary for sports betting fans, leaving them in a legal no-man’s land when it comes to placing wagers on sporting events that take place outside their home state. Even in those states where online gambling is legal, like Nevada, there are restrictions on where and how gamblers can place wagers, creating an inconvenience for sports fans who live in other states or countries. While the situation is improving, with the passage of the Unlawful Activities Prevention Act in 2015, making it a federal offense to knowingly promote sports gambling, it remains that many legal sportsbooks will not accept out-of-state betting for events that take place outside of their home base. For example, a New York resident cannot legally place a wager on the outcome of a Los Angeles Lakers basketball game.

When Will Online Sports Betting Be Fully Legitimate?

The complete legitimacy of online sports betting has not been achieved just yet. While the landscape has changed significantly since the early days of online betting, when it comes to actually being able to place wagers on sporting events that are governed by a body other than the NCAA or the NFL, there is still a way to go.

The introduction of sophisticated betting technology, like the fantasy sports betting platform Draftkings, has made it possible for people to have access to accurate information about their favorite sports teams without leaving the house, providing a level of legitimacy that was previously impossible to attain.

Fully legitimizing online sports betting will likely take a little bit of time, as there is still a significant portion of the population that is unaware of and/or resistant to the idea of placing wagers on sporting events. At the same time, the growing popularity of fantasy sports, which allow users to play as though they were a professional athlete, has helped to create a new generation of fans who are more comfortable engaging in wagering on sporting events.

Overall, the future looks very positive for online sports betting in the United States. The trend of states legalizing online gambling is unlikely to reverse, as support for internet gambling is at an all-time high, with 75% of adults reporting to the American Institute of Stress that they regularly engage in online gambling. Additionally, 70% of US adults report to the American Institute of Stress that they are regularly frustrated by the complexity of the laws and regulations surrounding digital gaming.

The future of online sports betting in the United States looks very promising, as the ability to access trusted information and receive fast and accurate results has made fantasy sports and other types of online betting a viable alternative for fans who want to place a wager on a sporting event.