United States Sports Betting Laws

When it comes to placing wagers on the outcomes of sporting events, there are a few applicable United States sports betting laws. There are currently only two federal laws that impact sports betting, one of which is less direct than the other. Previously, there was a third sports betting law but it was eventually declared unconstitutional.

The first is the Wire Act, which was passed in 1961 under US Attorney General Robert F. Kennedy. It wasn’t passed in an effort to stop sports betting, but rather in an attempt to limit the amount of unlawful racketeering that was going on at the time.

The next USA sports betting law is the one that is no longer applicable. The Professional and Amateur Sports Protection Act, shortened to PASPA and occasionally referred to as the Bradley Act, was passed in 1992. Later, we will explain exactly why this federal law does not impact the sports betting industry.

The third and final USA sports betting law is the Unlawful Internet Gambling Enforcement Act, called the UIGEA. It was signed into law in 2006. Despite the intimidating sounding title, this law is more of a banking regulation than anything else. Other than these three United States sports betting laws, there really aren’t any other laws about online sports wagering in the US.

What Is The Wire Act?

So, you’re probably wondering, what is the Wire Act? If it wasn’t passed in order to stop sports betting, why is it included on a page about USA sports betting laws? Well, the Wire Act is a piece of anti-racketeering legislation that states that it is unlawful for anyone to accept a wager on the outcome of a sporting event over a line of communication.

So what the Wire Act does is prevent bets from being accepted over state lines, essentially limiting betting to the states that had legalized it. At the time of the Wire Acts passage, only Nevada had legal sports betting. So the Wire Act pretty much just tries to limit betting to an in-person activity.

As the times changed, the Wire Act has changed with it. It does now include the internet under the definition of a “wire of communication”. That being said, it is important to note that the law specifically states that it does not apply when both states and/or foreign countries have legalized sports betting.

In any case, the Wire Act only applies to U.S. gambling operations. That is why American bettors are still able to use offshore online sportsbooks that are not included in the purview of the federal law. The Wire Act does not have the authority to dictate what people in other countries do. So under this United States sports betting law, using an online sportsbook based overseas is perfectly legal.

Does PASPA Make Sports Betting Illegal?

PASPA does not make sports betting illegal in the United States. In fact, the federal law no longer has any power over the U.S. sports betting industry. On May 14th, 2018, the Supreme Court ruled that the ban on sports betting imposed by the federal law was unconstitutional. This was a result of the 5+ year legal battle between the state of New Jersey and five sports leagues over a sports betting law passed by former Governor Chris Christie.

The NCAA, MLB, NBA, NFL, and NHL were plaintiffs in the case against New Jersey, which was initially called Christie vs NCAA before being changed to Murphy vs NCAA after Christie’s departure. NJ argued that it was within the rights of each state to determine which forms of gambling could be legalized/criminalized. The leagues contended that betting on sports would impact the integrity of their games, and cause harm to the industry.

In the end, the Court found that NJ’s claims that PASPA violated the 10th Amendment were true.

Now, sports wagering is not just limited to the four states exempt from PASPA. Each state can decide which forms of gambling to regulate and legalize within their respective jurisdictions. This includes land-based, online, and mobile sports wagering.

Am I Allowed To Bet On Sports Online Under The UIGEA?

With a USA sports betting law called the Unlawful Internet Gambling Enforcement Act, you might think that betting online is unlawful. But it isn’t. This scary sounding law is actually just a banking regulation. The verbiage used in the UIGEA states that businesses are prohibited from accepting wagers and from processing the transactions associated with those wagers.

The problem with this is that as a USA sports betting law, it only has jurisdiction over US entities. So the entire part about businesses being prohibited from accepting wagers is null and void because it doesn’t have the authority to prevent those businesses from doing anything. The UIGEA was a huge overreach by the federal government and actually landed the United States in some legal troubles.

Now, while the UIGEA cannot prevent businesses from accepting wagers, it can prevent US businesses from processing the transactions associated with those wagers. So basically, it can control banks. This leads to deposits methods that are processed and run through a US bank can be declined at any time. While this doesn’t happen often, it does occasionally happen. To address this, online, offshore sportsbooks have provided multiple deposit alternatives to accommodate their US bettors.

So, to reiterate, the UIGEA sounds like it would make online sports betting unlawful, but it doesn’t. It does make depositing at online sportsbooks a little more difficult. But online sports betting sites have responded by added extra deposit methods for US bettors. This USA sports betting law does not prevent US bettors from betting on sports online.

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