Don’t break the law. If you read anything in this article that you’re construing as an encouragement to break local, state, federal, or international civil or criminal statues, you’ve misinterpreted it.
©Rob Wilson/Shutterstock.comFederal laws
The good news for casual bettors is that state and federal laws have a host of anti-gambling statues, but they’re aimed at people and entities booking bets rather than those placing bets. If history is any guide, the chances of you, as a bettor, getting into legal hot water for placing a bet is virtually zero.The federal government has effectively restricted sports betting through a series of statutes with a variety of purposes and side effects:
- The Organized Crime Control Act of 1955 was based on fears of mafia-led bookmaking businesses. The Ike-era law said any entity that took in $2,000 in gambling revenue or more and involved five or more people was illegal. You’d be hard pressed to find a bookmaker that can survive on four clients or less.
- Bobby Kennedy’s war on organized crime put more restrictions on sports betting with The Wire Act of 1961, a broadly worded law whose aim was to starve the Sicilian beast from its sports and horse-racing revenue, which were heavily reliant on (federally regulated) interstate and international telecommunications lines. Contrary to popular belief, the original intent wasn’t to make it illegal for the average Joe Kennedy to place a sports bet. In fact, its purpose was to give state and local authorities an easy excuse for them to pursue and disrupt betting outfits. Because making the act of placing a bet would run up against free speech issues, The Wire Act and other Kennedy-era laws criminalized activities that were related to running a bookmaking business, not on placing bets. (It’s as if Congress wanted to make fishing illegal by outlawing standing next to water for more than a few minutes at a time.)
- The coup de grace for sports gambling was The Bradley Act, also known as The Professional and Amateur Sports Protection Act (PASPA) of 1992, which was passed in the wake of some unseemly sports scandals that saw college athletes shaving points and altering outcomes of games for a few six packs of beer. The PASPA explicitly prohibited any form of sports gambling operation, but in particular set out to take on states who wanted to turn sports betting into a source of tax revenue via lottery-like contests and sweepstakes. (If you’re wondering, Nevada got an exemption. Their legislators ensured the casinos could continue to book bets to their shareholders’ delight.)
- If you remember the online poker craze of the early 21st century, you might remember how it died at the hands of The 2006 Unlawful Internet Gambling Enforcement Act, or Anti-gaming zealots in Congress stealthily attached a clumsily worded rider to an unrelated anti-terrorism bill that passed virtually unnoticed by most legislators. This law made it illegal for U.S. banks to transact with known offshore casinos and bookmakers. Millions of Americans had been quietly enjoying a peaceful activity in the privacy of their own homes, so the federal government did what came naturally: It passed a law that made it much harder to do. As was the case with earlier laws, the 2002 law did not make it illegal to play poker or place a wager online; it just made it much more difficult. Suddenly you couldn’t simply put a deposit in your PartyPoker account with your Discover card. This restriction was enforced in a blanket way, affecting the various offshore bookmakers that had popped up in the early days of the internet. Many offshore casinos stopped doing business with American citizens as a preventative measure, and the poker boom was over.
While federal laws have made running a sports betting business illegal and impossible in every state except Nevada, none of the above laws made it, or make it, a federal crime for an individual American citizen to place a wager on the outcome of a sporting event.
The Supreme Court to the rescue
In May of 2018, the Supreme Court of the United States voted 6 to 3 to overturn the PASPA. (Offer a quiet word of thanks in honor of your favorite Supreme Court Justice who voted in favor of this decision every time you place a bet.)The effect of the decision was to let states decide for themselves whether, and in what form, to allow sports betting. And dozens of states have jumped at the chance. In anticipation of this outcome, there were over 40 bills making their way through various state legislatures as of the day the ruling came down from the high court!
State laws regarding sports betting
That brings us to 2020.The state you’re in (as in “Iowa” or “New Jersey,” not as in “shock” or “nonplussed”) defines the availability of sports bets to its residents and guests. We’d need a lot more pages to describe the ins and outs of every state’s attitude toward gambling. Some don’t bother with any laws at all. Others, like Washington (the state, not the district) actually has a law that forbids people from placing bets online.
The laws are manifold and variegated, but they can be summed up in the following table.
| STATE | STATUS | ONLINE BETTING ALLOWED? | NOTES |
| Alabama | No significant legislative action in progress | ||
| Arizona | DFS = Illegal | ||
| Arkansas | Operational | Unclear | |
| Colorado | Awaiting governor action | ||
| Connecticut | Almost there! | ||
| Delaware | Operational | Approved | |
| District of Columbia | Lottery parlays only | Not approved | |
| Florida | No significant action | ||
| Georgia | No significant action | ||
| Hawaii | DFS = Illegal | ||
| Idaho | DFS = Illegal | ||
| Illinois | Approved | Approved | Trial period only; no betting on Illinois collegiate teams |
| Indiana | Approved | Approved | |
| Iowa | Approved | Approved | |
| Louisiana | No significant action | ||
| Maine | Governor’s veto was recently overridden; sports betting is on the way! | ||
| Mississippi | Operational | Not approved | |
| Montana | Approved | Approved | Run by state lottery; DFS = Illegal |
| Nevada | Operational | Operational | |
| New Hampshire | Approved | Approved | |
| New Jersey | Operational | Operational | |
| New Mexico | Tribal casinos | Not approved | |
| New York | Operational | Under consideration | |
| North Carolina | Tribal casinos | Not Approved | |
| Oregon | Operational | Available via state-lottery-sponsored app | No betting on college sports |
| Pennsylvania | Operational | Operational | |
| Rhode Island | Operational | Approved | |
| Tennessee | Not approved | Approved | No college prop bets |
| Vermont | Legislative commission created | ||
| Washington | DFS = Illegal | ||
| West Virginia | Operational | Approved | |
| Wyoming | No significant action | Charitable pari-mutuel wagering allowed |
Sports betting and organized crime
Most people remember the basic contours of the Black Sox scandal, and a few know the names Art Schlichter or Tim Donaghy, both of whom used their position in their sport (Schlichter as an NFL quarterback; Donaghy as an NBA referee) to change the outcome of games on behalf of gamblers. You might also remember the Tulane point-shaving scandal from the late 20th century.There is a natural fear that sports betting invites the nefarious influence of organized crime into the pristine territory of professional and amateur sports. After all, people like to gamble, and it is inarguable that organized crime finds its way into society where human wants and needs fall on the wrong the law and/or what society deems acceptable.
But if the Prohibition era offers any lessons, it’s that passing laws against things that people want doesn’t make people want that thing any less. Americans’ demand for alcohol did not change by passage of the Volstead Act. Nor did Americans’ taste for gambling disappear with various state and federal statutes.
The reality is that illegal bookmakers, whether small and independent or large and connected with friends of Tony Soprano, operate to make money. And while a quick buck can be made by influencing the outcome of games, in the long run, bookmakers prefer the consistent, reliable income provided by the vig.
I already mentioned the 4 to 5-percent commission charged by the bookmakers. It has a cooler name than "commission": It’s called the vig, or vigorish. Sometimes it’s known as juice, and it’s effectively a service charge collected by bookmakers.
When gray-market betting standards began to stabilize between the World Wars, bookmakers quickly came to understand that game-fixing and scandal would keep bettors at home. It’s that simple: If betting customers suspect that games are fixed, they won’t bet.In this way, perhaps counterintuitively, sports betting, even if associated with criminal organizations, drives demand for games that are at least perceived to be fair by the betting public. There are other factors at work as well:
- Athletes are paid well and are thus harder to influence.
- Athletes and games are under greater scrutiny for odd behavior and outcomes.
- Technology makes it easier to spot iffy betting patterns.
- Betting houses limit wagering amounts on sports at risk for corruption.