U.S. Supreme Court Clears the Way for Legal Sports Betting
Although U.S. bettors have wagered on sporting events since the advent of organized games, until 2018, bettors could only place legal sports bets in one state: Nevada, which legalized sports betting in 1949.
The Professional and Amateur Sports Protection Act (PASPA) of 1992 banned sports betting from all other U.S. states due to the conception that wagering on sports challenged the integrity of events.
New Jersey brought lawsuit after lawsuit against PASPA for eight years, until its argument finally reached the Supreme Court of the United States.
SCOTUS ruled in the Garden State’s favor in May 2018, based on its decision that limiting sports betting to one state was illegal. That paved the way for each state to pass its own laws on sports wagering.
The high court’s decision swayed public opinion so much, current polls show that as much as 80 percent of all U.S. citizens now support legal sports betting.
With the repeal of PASPA and turn-around in public support, U.S. states began developing regulated sports betting markets.
What States Offer Regulated Sports Betting?
As of November 1, 2019, 13 states offer legal sports betting in some form.
Despite New Jersey’s legislation in advance of PASPA repeal, Delaware was the first state to offer sports betting outside of Nevada. Garden State sportsbooks began opening shortly afterwards.
Indiana is the latest state to launch regulated sports wagering and opened retail sportsbooks in September 2019. Other states where bettors can place a legal wager on sports include Mississippi, West Virginia, New Mexico, Pennsylvania, Rhode Island, Arkansas, New York, Iowa and Oregon.
Current states getting ready to begin sportsbook operation include Illinois, Maine, Montana, New Hampshire, North Carolina, Michigan and Tennessee.
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The Benefit of Regulated Sports Wagering in the U.S.
The biggest advantage for states with legal sports betting operations is extra revenue from taxes and licensing fees.
States tax sports gambling revenue at different rates, all the way from 6.75 percent in Nevada to 51 percent in Rhode Island.
One thing is for sure – the total handle wagered on sporting events in just 13 states through October 2019 was nearly $12.4 billion. The revenue on that kind of action is significant.
According to the American Gaming Association, assuming that the 40 states offering casino gaming in 2016 move to legalize sports wagering, the sports betting market could contribute $22.4 billion to the U.S. gross domestic product.
The same study projects the total economic output, representing sales of businesses in the U.S., to be $41.2 billion.
Legal sports betting operations, including wages, salaries, benefits, and tips, are expected to support $11 billion of total labor income with the number of total jobs supported, either direct or indirect, is expected to be more than 200,000.
While not all establishments will operate sportsbooks, they can host game parties, creating excitement for fans with “skin in the game.”
Why Not Use an Offshore Sportsbook?
An estimated $150 billion is wagered annually in the U.S. with offshore sportsbooks, according to the American Gaming Association.
Since PASPA pushed U.S. bettors outside of Nevada into making wagers with online offshore books, an estimated handle of $150 billion and the resulting operator profit represents lost revenue for U.S. states.
Offshore books do not use FDIC-insured banks. The offshore market is unregulated in the U.S., and is subject to the laws of other countries.
Some offshore sportsbooks are reputable, but many are not, leaving many U.S. bettors with no legal recourse when things go wrong.