Why Online Betting Was Made Illegal in the United States

In the United States, a great many people love to bet on sports events; for some, it’s even part of their hobby. For hundreds of years, betting on horses was legal and highly regulated, but over the past few years, online betting has become incredibly popular. In fact, in many states, it is now possible to bet online from your mobile device, and numerous online sportsbooks now exist, making it easy for recreational and professional bettors to place bets on the go.

Given the United States’ love for sports and betting, it’s not entirely unexpected that lawmakers in the country would try to protect the public’s interests. As it turns out, there are actually a handful of reasons why online betting in the United States was made illegal.

Highly Manipulative Activities

Some people believe that sports betting should be regulated and monitored because it is often used for manipulation and fixing of sporting events. According to these folks, gamblers will go to great lengths to influence the odds of a game in their favor; they will tamper with the outcome of a game, or ‘shape’ the game in some way. While it is true that some sportsbooks do take advantage of people’s gambling tendencies, it is also true that not all sportsbooks are created equal, and it’s quite easy for anyone to avoid getting duped.


Another argument against online betting is that it’s considered to be ‘racketeering’ under US law. Just like organized crime, online betting was made illegal because it is believed to be a source of income for some gangs. It is also claimed that these groups sometimes use shady tactics such as ‘pay-to-play’ schemes to get people to engage in illegal betting activities. While there is some truth to these claims, it’s important to keep in mind that it is also possible for someone to engage in illegal betting activities and not be a member of a gang.

Prohibited Marketing

It is against the law for bookmakers or gambling establishments to advertise in any way in the United States. This means that you cannot put a banner ad on your site, because ads are considered to be an endorsement, and therefore illegal. In a similar fashion, sponsorships and other similar arrangements are often considered to be ‘payments’ for the appearance of a celebrity or a famous athlete, which are also illegal. For that reason, the United States Soccer Federation and the National Football League have both cracked down on the practice of players being sponsored by sportsbooks, because the associations don’t want their stars to be associated with illegal activities.

Unfair Advantage

Those in support of legal gambling in the United States believe that placing bets is perfectly acceptable, as long as the house takes care of the spread; that is, the point spread. What this means in practice is that the bettor earns an advantage based on the betting line, rather than having to rely on the integrity of the game itself. For example, if the betting line for an NFL game is +3 points, that means the bettor would have to wager $100 to win $100. But if the game is actually 31-29, the bettor wins $200 because they got the points right, rather than having to rely on the outcome of the game itself.

Illegal Gambling

The fact that online betting is illegal in the United States doesn’t mean that it isn’t accepted there. In fact, some individuals and organizations actively promote and facilitate illegal wagering through websites, social media accounts, and other digital platforms. The reason for this is that they make a lot of money from online betting, and they don’t want to lose their legal customers.

Unclear Regulations

Speaking of losing legal customers, the fact that online betting is illegal in the United States doesn’t mean that it’s unregulated. On the contrary, while it is indeed legal for US citizens to bet online, the practice is heavily regulated. This is because the Interactive Gambling Act of 2001 mandates that states implement strict regulations on any entity that offers online wagering. The law also requires states to license and regulate online sportsbooks, making sure that they are abiding by the rules and that gamblers are protected from being scammed. Furthermore, the Federal Trade Commission enforces the IGA, so any infractions against it are subject to investigation and punishment. These regulatory agencies definitely take their jobs very seriously, and it’s not easy for a small business owner to get breaking news alerts from them.

Violates Personal Freedom

Another argument against online betting is that it violates personal freedom. After all, if you decide to go against the grain and place a bet on a sporting event that you think will be well-covered by the bookies, there’s no changing your mind once the bet is placed. In other words, you’re risking money you don’t have just to prove a point, and that’s something that people find morally offensive.

Tax Revenue

Finally, it is often argued that legal betting in the United States would be a source of revenue for the federal government, which would then in turn have to raise taxes. This is because in theory, every time someone places a wager, the government takes a small slice out of their wallet, as payment for the privilege of gambling. While it’s true that legal sports betting would likely bring in a great deal of revenue, the burden wouldn’t just be felt by gamblers, but by all Americans, because the government would have to find a way to pay for all the things it needs, including the security forces that watch over the operation of the gambling industry.

As you might imagine, there are strong opinions on both sides of the debate about whether or not to legalize sports betting in the United States. The truth is that while some people might disapprove of online betting, it is still completely legal and there are many benefits to it.