US Sports Betting Laws

Federal Laws About Sports Betting

There are three sports (technically, there are two such laws now, as one has been overturned by the US Supreme Court) betting laws that bettors in the U.S. should at least be aware of when they are thinking about making a wager on sports. This will ensure that they steer clear of trouble. And this wouldn't necessarily mean trouble for the bettor from a legal standpoint; this is to ensure that when you do decide to place a legal wager, you are doing so in a legitimate way.

The Professional and Amateur Sports Protection Act of 1992 (PASPA), the Unlawful Internet Gambling Enforcement Act of 2006 (UIGEA), and the Federal Wire Act of 1961 are the three federal laws that sports bettors everywhere across the country should at the very least be aware of before deciding if betting on sports is right for you.

The Professional and Amateur Sports Protection Act of 1992

PASPA is a law that placed restrictions on where land-based sports betting was allowable and where it was not, which essentially limited the spread of legal sports betting to four states: Nevada, Delaware, Montana and Oregon. PASPA severely limited land-based sports betting opportunities at licensed sportsbook to just a handful of states, of which even those sportsbooks do not have full access for sports betting. Only Nevada is the state with unrestricted sports betting as of this writing.

However, PASPA was overturned by the US Supreme Court on May 14, 2018, on the grounds that the law violated certain tenants of the 10th Amendment to the US Constitution relating the rights of individual states to decide for themselves what forms of gambling to allow inside their own jurisdictions. This monumental 6-3 majority decision essentially gave any state in the nation the go-ahead to pass whatever laws legalizing and regulating sports betting that they see fit. Time will tell how many states will adopt a new stance on sports betting and get in on the tens of millions of dollars in potential tax revenues available through a legalized sports wagering industry, but for now it seems nearly two dozen states are poised to do so.

More: Learn More About Law

The Unlawful Internet Gambling Enforcement Act of 2006

The UIGEA covers gambling on the Internet, of which sports betting is a huge part of that subsection of the broader gambling industry worldwide. The UIGEA, however, is more concerned with the operating procedures used by sports betting sites serving the U.S. and domestic financial processing services, and therefore does not cover bettors as a result. As you will find out on other pages throughout our site, that is a key fact and opens the door for legal sports betting online at offshore sites accepting American players.

The key takeaway from the UIGEA is that it primarily affects the ability of sportsbook sites to accept certain credit cards to be used for making deposits or collecting payouts. This used to be more of a problem a few years back, but the leading sports betting site operators have now started to implement their own in-house processing services in order to get around the prohibitions put in place by the UIGEA. At any rate, no individual bettor can be or has been prosecuted under the UIGEA, since it only describes the punishment for offending financial services providers and sportsbook operators based in the US.

More: Learn More About Law

The Wire Act of 1961

The Wire Act is along the same general premise as the UIGEA, because it too singles out sports betting businesses and the way that business is conducted within that realm. It strips away the option to financially process and payout bets through wire communication, which is obviously a problem for sports betting businesses. Additionally, the Wire Act makes it illegal for betting information or wagers themselves to be transmitted across state lines via any means of wired communications networks, and this was later expanded from telephones and telegraph wires to gambling done over the internet as well.

However, it should be pointed out that, while the Wire Act is still in effect today and in fact forms the foundation of all federal anti-sports gambling legislation out there, it makes no provision to punish individual bettors. The Wire Act is aimed squarely at curtailing illegal domestic sports betting operations whether commercial or of the criminal sort, as sports gambling rackets became a major source of income for organized crime in the 1960s through the present day.

More: Learn More About Law