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Online Sports Betting Is Complicated, But Legitimate

Updated May 7th, 2020
Published June 22, 2018

Finding a clear answer on the legal status of sports betting can be tough. Particularly in the United States, regulations have shifted substantially over the past decade, and new legislation at the state level continues to change local rules on a nearly constant basis.

The good news is that sports betting is in the midst of a rapid and massive increase in legal options.

Ultimately, answering the all-important question of “is sports betting legal? ” depends on where you live.

This guide will tell you what to look for. At the end of the day, using a licensed, properly-regulated sportsbook like those suggested on this site is a good way to ensure you’re within the bounds of the law. These operators only accept customers who can bet with them legally.

For a detailed history of how we got to the  surrounding sports betting, read our three-part series, encompassing the Origins of Sports Betting, the Vegas Era, and the Online Era.

To be clear, we are not legal professionals. An attorney in your country or state of residence is always the best authority when it comes any specific questions about sports betting regulations in your region. That said, we are confident in the information contained within this guide and sure that every sportsbook featured on this site presents a legal option for bettors in those countries and states where they operate.

What Laws Should Sports Bettors Know About?

There are several relevant federal laws regarding the operation of online sports betting sites targeting American users. It’s important to note that these regulations relate primarily to the operation of sports betting businesses and related financial transactions.

There is no federal law that prevents individuals from betting on sports, and licensing operators and regulating the industry is handled at the state level.

The Unlawful Internet Gambling Enforcement Act (2006)

Currently, there is no federal law against bettors online, as is often incorrectly reported by those who cite the Unlawful Internet Gambling Enforcement Act of 2006.

The law doesn’t say anything about betting online on sports, but merely stipulates that it is illegal for banks to transfer money gained from illegal betting. The express purpose of the law was to target those who own and operate online sportsbook on US soil, not the bettors who partake in online betting.

The critical legal distinction to draw here is that the UIGEA didn’t move to criminalize the act of betting itself. It moved to criminalize sending money to a sportsbook within US borders. Ergo, as long as you could find a legal loophole to get your money to a sportsbook, you were free and clear.

As proof of this fact, The UIGEA explicitly states that it has no authority to determine whether online betting is legal or not.

To decode that complicated legal jargon, we’ll rely on the words of US lawyer Nelson Rose: “There is no federal law against being merely a player…you have a better chance of winning the World Poker Tour than of being arrested.”

We’ll take those odds any day!

Note that operators who are licensed by state regulators to legally operate in the United States are not subject to UIGEA. As such, financial institutions are free to do business with these entities. 

Murphy vs. NCAA Opens the Door to State-Regulated Betting

The legal landscape surrounding sports betting in the United States changed drastically in May, 2018, when the Supreme Court concluded the Murphy vs. NCAA case by overturning the Professional and Amateur Sports Protection Act, commonly known as PASPA.

This decision immediately lifted the federal ban on sports wagering, and gave rise to an era in which every state is free to regulate sports betting as they see fit. The practical result is that the federal government is no longer widely involved in regulating sports betting.

As a bettor in the US, this means state laws will now determine the legality of sports betting where you live.

Do I Have to Worry About State Laws About Sports Betting?

You should be mindful of the relevant state laws pertaining to sports betting in the state you live in.  While an ever-increasing number of states are passing legislation to allow both in-person and online sports betting, there are no nationwide licenses available for sportsbook operators who serve American customers.

Keep an eye on our sports betting legal tracker to stay up-to-date with the laws in your state and those nearby.  It’s always best to wager with operators who have the blessing of local authorities, even if you’re unlikely to face consequences for wagering with a site that lacks the proper licenses.

Fully-regulated online sportsbooks offer easier banking transactions and a higher level of security. In states that allow online betting, sportsbooks should confirm your location whenever you bet. If a sportsbook is using geo-comply technology, there’s a good chance it is a safe and legal option.

Has Your Credit Card Company Restricted a Transaction?

There have been numerous recorded incidents of credit card companies placing restrictions on deposits and/or transactions to sportsbooks. This is not unusual in any sense, and can be fixed with a quick call to your credit card provider.

The only reason these transactions are often scrutinized by credit card companies is because they involve a company that isn’t readily recognized. Many sportsbooks often fall into this category, and your credit card company is forced to investigate further. This is to ensure that they’re compliant with both KYC (Know Your Customer) and AML (Anti Money Laundering) regulations.

This doesn’t mean that you’re restricted from making deposits to sportsbooks, or that this process is illegal. A private credit card company blocking a transaction to a source they’re not familiar with (or mildly suspicious of) is not tantamount to breaking the law.

Many credit card companies tend to err on the side of caution, as a failure to comply with KYC and AML laws can quickly land them in legal hot water. While it may be annoying to have to deal with credit card companies and their seemingly endless lists of rules and regulations, these inconvenient parts of the process are ingrained.

Bet With Confidence!

Ever had any questions about the legal nuances of sports betting? Not to worry! We’ve created a comprehensive guide where we cover everything from how to pay your taxes on your sports betting winnings to the different licensing regions that sportsbooks house their operations in.

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