Sports Betting Legality Across the U.S.

8 min read
Aug 30, 2024, 9:27 AM

Sports Betting Legality in the US

The US sports betting landscape has changed a lot in recent years. This guide will give you a look at the current state of sports betting legality across the country as we cover the laws, regulations, and trends.

Sports betting is the act of wagering on the outcome of sporting events. It’s been around in the US for a long time, but its legality has been complicated and continues to evolve. 

In 2018, a Supreme Court ruling allowed individual states to legalize sports betting. This overturned the federal ban on sports betting and let states make their own laws.

Since then, 39 states and Washington D.C. have legalized and regulated sports betting:

Sports Betting Legalization Map

In some of the others, there are ongoing legislative battles or dead legislation, while a couple of states have shown no interest in legalization.

Check out this guide on the RG Game Changers Podcast

States with Legalized Sports Betting

So far, 39 states and Washington D.C. have legalized sports gambling. New Jersey was one of the first after the Supreme Court decision, and Missouri was the most recent, thanks to a ballot initiative in the 2024 election.

New Jersey was quick to enter the sports betting market, offering both in-person sports betting at casinos and racetracks and online sports betting. Since its launch, the state's legal gambling industry has generated more than $481 million in tax revenue. Pennsylvania followed suit in 2018. 

The Keystone State has seen major growth in its sports betting market, with its total betting handle increasing 415.59% between its first year of online sports betting (2019) and 2023.

Nevada has been the gambling capital of the US for decades. The Silver State has long had legal sports betting, and its established infrastructure and experience regulating gambling have helped it stay strong in the sports betting market even as other states enter the fray.

In January 2022, New York legalized online sports betting and is now one of the biggest markets in the country. In its first year, sports betting generated nearly $700 million in tax revenue, which is an example of the economic impact of legalized sports betting in a large population center.

States Considering Legal Sports Betting

While many states have legalized sports gambling, the practice is still illegal in others. Texas, for example, has made multiple attempts to legalize sports betting, but the legislation has failed in recent years. The state's conservative politics have made it difficult for proponents of legalization.

California is the most populous state in the country and has yet to legalize sports betting. Various proposals have been put forward, including retail and online sports betting, but disagreements among stakeholders have prevented legislation from passing.

Other states considering sports betting legislation include Minnesota, Georgia, and Oklahoma. All 11 states without legal sports betting have their own unique political and economic considerations.

RG's research on the topic provides a detailed explanation of why each of those states has yet to pass legalized sports betting legislation.

Sports Betting Trends and Stats

The sports betting industry has grown exponentially since the 2018 Supreme Court decision. According to the New York Times, the industry's revenues have grown twelvefold between 2018 and 2023.

Sports Betting Revenue

Source: New York Times/American Gaming Association

Online sports betting has become the dominant form of sports wagering where it’s legal. Mobile betting apps offer convenience and a wide range of betting options and attract a broader audience than traditional retail sportsbooks.

Fantasy sports have also contributed to the growth of the sports betting industry. Companies like FanDuel and DraftKings, which started as daily fantasy sports operators, have become large players in the sports betting market.

Sports betting content is also being integrated into mainstream sports media. Major networks now discuss betting odds and trends during game broadcasts. Sports betting is becoming more mainstream.

Sports Betting Regulations and Laws

The regulatory framework for sports betting varies state-by-state.

While the federal government no longer bans sports betting outright, it still has a role in overseeing interstate gambling and enforcing anti-money laundering laws.

At the state level, regulations cover a range of issues, including licensing for operators, types of bets allowed, mobile sports betting, horse racing regulations, and problem gambling measures.

Tax rates on sports betting revenue differ greatly from state to state. For example, Pennsylvania has a 36% tax rate on sports betting revenue, while Nevada has a 6.75%. These tax rates can make a big difference in the profitability of sportsbooks and the overall competitiveness of a state’s betting market.

The five states that tax online sports betting at the highest rate all reside in the Northeast:

StateTax Rate
New York51%
New Hampshire51%
Rhode Island51%
Pennsylvania36%
Vermont31.7%

(TaxFoundation.org)

Many states also require responsible gambling measures as part of their sports betting regulations. These can include self-exclusion programs, betting limits, and required contributions to problem gambling treatment programs.

Responsible Sports Betting

With the rise of sports betting, responsible gambling practices are increasingly important. Bettors are encouraged to see betting as a form of entertainment rather than a profit-making venture.

Setting and sticking to a budget is part of responsible betting. Many experts advise never to bet more than you can afford to lose. Some sportsbooks offer tools to help users set deposit and betting limits.

Knowing the odds and the house edge in sports betting is also important for responsible betting. Many regulators and responsible gambling advocates prioritize educating sports bettors about the reality of wagering, including the fact that they are likely to lose in the long run.

Responsible Gambling Tip
The National Council on Problem Gambling operates a 24/7 helpline (1-800-522-4700) for individuals seeking help with gambling addiction. Many states also have their own resources for problem gamblers.

Being aware of the signs of gambling addiction is critical. Below are some symptoms to look out for in yourself or a loved one:

  • Preoccupation: Thinking about gambling, reliving past gambling, or planning future bets.
  • Chasing: Increasing gambling or bets to try and get back what you lost.
  • Tolerance: Needing to bet more to get the same high.
  • Inability to stop: Repeatedly trying to cut down or quit unsuccessfully.
  • Risky behavior: Gambling despite the risks, e.g., job, relationships, legal status.
  • Lying to cover: Hiding the extent of gambling from family, friends, or therapist.
  • Borrowing or stealing money: Using unethical or illegal methods to fund gambling habits.

FAQ

Federal Law

Is sports betting legal at the federal level?

While the federal ban on sports betting was struck down in 2018, there is no federal law explicitly legalizing sports betting. The legality is determined at the state level.

Online Betting

Can I bet on sports online in any state where it's legal?

Not necessarily. Some states have legalized only in-person sports betting, while others allow both retail and online wagering. 

Additionally, online bets typically must be placed within state borders where it's legal.

Tax Rates

How do tax rates affect sports betting?

Tax rates can impact the competitiveness of a state's sports betting market. Higher tax rates may result in less favorable odds for bettors, as operators need to maintain profitability.

Offshore Sportsbooks

What's the difference between legal and offshore sportsbooks?

Legal sportsbooks are licensed and regulated by state authorities, offering consumer protections and responsible gambling measures. 

Offshore sportsbooks operate outside US jurisdiction and may pose risks to consumers.

Professional Leagues

How does sports betting legalization affect professional leagues?

Legalization has led to partnerships between leagues and betting operators, increased fan engagement, and new revenue streams for leagues through data licensing and sponsorships.

Restrictions

Are there restrictions on what sports I can bet on?

Restrictions vary by state. Some states prohibit betting on in-state college teams or certain types of bets, like prop bets on individual college athletes.

Differentiation From Other Betting

How is sports betting different from other forms of gambling?

Sports betting is seen as a form of gambling that involves an element of skill, as bettors can use knowledge of sports to inform their wagers. However, like all forms of gambling, the house maintains an edge over time.

References

Sources
Nevada Bar Association
The End of PASPA: Murphy v. NCAA
https://nvbar.org/wp-content/uploads/11-The-End-of-PASPA.pdf
Axios
Utah among dwindling group of states that bans sports betting
https://www.axios.com/local/salt-lake-city/2024/11/08/utah-sports-betting-ban-missouri-gambling
Kansas City Star
'Missouri voters narrowly pass Amendment 2, legalizing betting on major sporting events'
https://www.kansascity.com/news/politics-government/article294503359.html#storylink=cpy
Texas Policy Research
The Push for Casino Gambling and Sports Betting in Texas: Key Legislation and Debate
https://www.texaspolicyresearch.com/the-push-for-casino-gambling-and-sports-betting-in-texas-key-legislation-and-debate/
Business of Apps
rts Betting App Revenue and Usage Statistics (2024)
https://www.businessofapps.com/data/sports-betting-app-market/
<p>Nick has been fascinated with sports since he was first taken to a Toronto Maple Leafs game in 1998, and he's been writing about them professionally since 2014.</p><p>Nick has covered baseball and hockey for outlets like The Athletic, Sportsnet, and Yahoo Sports while growing his expertise in sports data analysis and research.&nbsp;</p><p>Between 2022 and 2023, he worked for a betting startup called NorthStar Bets. In 2024, he contributed to Oddspedia before joining the RG team.</p>
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