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Sports Betting in the US: An Overview of the Legal Aspects

Alexandre Grela

Introduction

So far, gambling is rather limited in the US – except for Nevada (in cities such as Las Vegas and Reno). The Supreme Court in the US, however, has decided to lift this ban in 2018. The states can now choose freely whether they want to legalize sports betting. For the states, and especially all for the bookmakers, this results in new and massive sources of revenue.

Big market for Sports Betting in the USA

The USA has more than 325 million inhabitants, and sport is inextricably linked to American culture. It runs through all sports as well. According to a study by the American Gaming Association, the volume of unregulated sports betting in the US is estimated at 150 billion US dollars. It is hardly surprising considering the great social importance of sport. The most popular games in the USA are the “Big Four”:

  • Football (NFL)
  • Basketball (NBA)
  • Baseball (MLB)
  • Ice Hockey (NHL)

Following the ruling of the Supreme Court in 2018, sports betting in the US was allowed. The judgment was preceded by a lawsuit by the state of New Jersey. There, they wanted to make the sports betting in the second gambling stronghold of the USA, Atlantic City, accessible and thus socially acceptable for quite some time already. The ruling will allow states to decide on commercial access to sports betting autonomously. So far, it is permitted in Nevada, Oregon, Delaware and Montana with others to follow in the near future. Experts anticipate at least 32 states that will legalize sports betting by the year 2025.

Rosy prospects for Bookmakers and the Economy

In Germany, the legalization of sports betting boosted the economy. Especially in football broadcasts are commercials and impressions of many bookmakers as Tipico, who is even official partner of the Bundesliga, to see. As well, many clubs are sponsored by betting operators. The lucrative sponsorship contracts flush a considerable amount of money into the coffers of the clubs.

In the US, the significant bookmakers and Daily Fantasy Sports providers such as Fan Duel or Draft Kings will benefit from the new circumstances. They can now legally combine their offer with sports betting over the internet. Since they already have several million customers, this will likely generate companies billions in extra revenue. But of course, the clubs can also benefit from the extra money.

In all significant European football championships, the bookmakers are partners and sponsors of the clubs. In the US, this could also be established after the legal requirements have been created. It is not yet clear which European betting operators will benefit from this change in the US sports betting market. For many European bookmakers, however, a prepared plan for the jump across the pond is already in the starting blocks. The sports betting market is too big and lucrative for many suppliers and companies not to want to participate in it. For example, the well-known online casino William Hill has already settled in New Jersey and set up a sports betting centre.

Many more online bookmakers like Unibet, which also offer sports betting, will undoubtedly expand their infrastructure in the US due to the favourable market situation. Yet getting the best deal will probably lead the bettor to take a peak into the Unibet Review or the William Hill and the US-based bookmakers.

No Uniform Solution

However, the ruling of the Supreme Court does not provide a unified solution for the entire United States of America. The law leaves state sovereignty to US states. It will especially affect professional teams, who play games beyond state borders, but for whom the regulation in sponsoring is not clear. It also penalizes those users who live in countries where sports betting are not yet commercially operated. These users will look for alternatives – and states, in turn, will lose massive tax revenues. The developments in the US sports betting market will remain exciting soon. Distribution battles over the betting rights as well as the determination of regulations and tax rates will accompany the legalization of sports betting in the USA.