Sports Gambling Legislation By State
When discussing legal online sports betting, the majority of America's government has a very regressive, prohibition-style attitude towards it, buying into a negative perspective concerning the morality of gambling entertainment. This is what has led to a variety of state gambling laws in the past.
There are no US federal laws that make it a crime for Americans to place bets at offshore sportsbooks that are operating legally within the industry. There are two states that legally prohibit all online gambling, domestic or offshore, leaving residents in Connecticut and Washington without legally sanctioned online betting options, though they have yet to start enforcing those restrictions.
Overseen by state senators and assembly members, the hearing will include commentary from sports betting industry experts on factors that should be considered in sports betting legislation. — Kentucky appeared to be a top candidate to legalize sports betting in 2020. Now, it could be 2022 before the state legislature gives it another chance. Adam Koenig will.
For the most part, state lawmakers are becoming more progressive concerning betting entertainment and recognize the value that this type of revenue stream can bring to a state. Individual states are actively analyzing what the legalization of domestic sports gambling can provide them with in terms of opportunities, tourism, and tax revenue, and many have already taken action one way or the other through new legislation.
Iowa, Nevada, New Jersey, Oregon, Pennsylvania, Rhode Island, and West Virginia currently permit state-regulated online sports gambling, with nearly two dozen additional states having launched land-based sportsbooks. Individual territories began embracing sports betting the moment that PASPA was ruled unconstitutional by the Supreme Court in the infamous NJ case, with multiple states having had their legislation ready and waiting should the ruling go in the Garden State's favor.
Below we'll take a look at the relevant US federal gambling laws, and explain how state gambling laws intersect with federal laws to impact online and brick and mortar sportsbook gambling, as well as what these laws have to say about the legal status of offshore sports betting entertainment.
The Federal Laws on the Books
The sections below will detail and explain how each major federal law affects domestic gambling opportunities in the US.
The Federal Wire Act
Passed back in 1961, the Federal Wire Act was made law in an effort to curtail the illegal gambling activities taking place over the phone by organized crime syndicates. It prohibited the transmission of wagers or betting information from being carried across state lines via telegraph or telephone. The Federal Wire Act targeted these illegal bookie operations as a means to curb the mafia from manipulating games and making a profit through these tactics.
This law was strictly focused on interstate gambling, and only targeted those accepting bets and not the individuals placing the bets. The goal was to crack down on illegal gambling services, not prosecute bettors. Between the DOJ Legal Opinion of 2011 and the repeal of PASPA, today's application of the Wire Act prohibits any gambling business from accepting bets across state lines or from foreign sources.
With the changes still being implemented, we are not sure yet how this will affect those states that had entered into interstate gambling pacts with one another, sharing player pools for their online gambling initiatives. Once that aspect of the legal situation becomes more clear we will update that information here.
The Professional and Amateur Sports Protection Act
Also known as the Bradley Act, or just PASPA, the Professional and Amateur Sports Protection Act was a sweeping federal regulation that passed in 1992, with the supposed intent of protecting the integrity of sports by making sports betting illegal.
At the time the bill was passed, there were sports lotteries in Delaware, Montana, and Oregon, as well as licensed and regulated sports betting in Nevada, so those four states were exempt.
The law effectively prevented the expansion of the sports betting market throughout the United States in what many categorized as a discriminatory law that favored a few states while restricting others.
New Jersey took on the mission of challenging the law and after several years of court battles, was given a favorable outcome by the highest court in the land as SCOTUS ruled PASPA as unconstitutional, nullifying the law.
As of May 14, 2018, each individual state now has the authority to dictate sports betting laws within their borders. They can now choose to authorize or prohibit sports betting at their pleasure. Following PASPA's repeal, we have seen multiple states move forward with legislation that legalizes sports gambling at the state level.
The Unlawful Internet Gambling Enforcement Act
This is the big one that shook the gambling industry to its core. Online gambling really started to explode during the early 2000's, especially in the realm of online poker. In 2006, then-President Bush signed into law the Unlawful Internet Gambling Enforcement Act, known all over as the UIGEA. In a nutshell, the UIGEA placed very stringent regulatory restrictions concerning how gambling-related transactions could be processed.
The most reputable sites started a countdown and allowed Americans to withdraw and closeout their accounts. Many trusted gambling sites left the US market at this time. After the dust settled, and the financial and gambling industries learned how to comply with the regulatory oversight provided by the UIGEA, many of these reputable gambling sites have returned to provide services to US sports bettors.
The UIGEA did end up making the online gambling market safer for both the bettors and the operators by imposing a more reliable and stricter regulatory structure for how gambling-related transactions are processed. Gambling sites invested in top tier payment processors while all parties implemented higher-level security protocols to ensure the validity and safety of those transactions that are processed.
While US online gambling funding options are still somewhat limited in some regards, things have stabilized. The emergence of cryptocurrencies have filled the void left by the elimination of US-friendly e-wallets and failed credit card transactions. The UIGEA does not make it illegal for Americans to gamble online. The law simply regulates how online gambling transactions are processed.
The 2011 Department of Justice's Interpretation of Federal Laws
With the growth of online commerce, several states became interested in offering lottery game services online. This raised questions concerning the application of the Federal Wire Act, driving the DOJ to issue a clarification of the law's reach.
The Department of Justice ruled, and accurately so, that the federal government had no right to tell states that they could not sanction online gambling and therefore established that each US state has the authority to determine their own fate concerning online gambling with the exception of sports betting.
The repeal of PASPA took care of freeing sports gambling as the last remaining federally prohibited form of state-regulated online gambling. As of now, all 50 states have the legal ability to legalize and offer online gambling such as casinos, poker, bingo, and sports wagering. To date, only a handful of states have taken advantage of legal domestic online gambling. However, many states have pending bills to allow various forms of sports betting.
The 2019 DOJ Interpretation of Federal Gambling Laws
Following the repeal of PASPA in 2018, the reach of the Federal Wire Act has again come into question. In a new interpretation, which many believe was coerced by anti-online gambling activist Sheldon Adelson, the Department of Justice has indicated that the Wire Act prohibits not only interstate wagers but also the sharing of information across state lines.
This determination will certainly harm those states that have entered into interstate gambling compacts to share player pools and resources with other states. The opinion is being formally challenged through a lawsuit headed up by New Hampshire. As the situation unfolds, we will provide updates here.
What You Need to Know Going Forward
All of this legal information is good knowledge to have under your belt, no doubt about it. However, all you really need to know going forward is that there are no federal laws making gambling illegal in the United States either online or offline, and this includes domestic and offshore sports betting. States now determine the legal status of all gambling entertainment within their borders. As a sports betting resource guide, we want to make this point clear.
For those of you interested in betting on sport but who live in a state that has not authorized state-regulated sportsbooks, you'll have to either travel to a state with legalized sports betting or use a legitimate offshore sportsbook such as the ones you find listed on this site. You can check out our list of states that allow sports betting here or follow our list of recommended online sportsbooks.
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- There are two bills in the state legislature that would legalize sports betting in Ohio.
- Senate Bill 111 and House Bill 194 both differ in their overall formats but each would make gambling on sporting events a legal pastime in the Buckeye State.
- OH HB 194 Sponsor Representative Dave Greenspan and OH SB 111 Sponsor Senator John Eklund spoke with LegalSportsBetting about their thoughts on Ohio legalizing sports betting.
COLUMBUS, Ohio – There are still two live bills that would legalize sports betting in Ohio currently being considered by the Ohio Legislature. Senate Bill 111 and House Bill 194 would both allow for the legal gambling on sporting events in the state.
These bills were first introduced in 2019 and remain the two viable options for making sports betting in the Buckeye State a legal activity. The sponsors behind each bill spoke with LegalSportsBetting about the outlook for their pieces of legislation and about the possible future of an Ohio sports gambling market.
Ohio House Bill 194 And Representative Dave Greenspan
OH HB 194 would legalize both retail and mobile sports betting in the state of Ohio. The regulator of the market under this bill would be the Ohio Lottery. They would oversee all of the rules and regulations for the entire sports gambling industry in the state.
There is a 10% tax rate set on all revenue made from the market. Kiosks that would accept sports bets would be allowed at various retail locations under OH HB 194.
This bill has had a number of hearings for amendments in its path toward legalization. Currently, the Coronavirus pandemic has put the state legislature on hold and when the session reconvenes, it is unknown whether or not sports betting will be a pressing issue for discussion.
Per Representative Greenspan, last amendments made on House Bill 194 took place on November 7, 2019 in its 8th hearing. The Finance Committee has not met for the 2020 session and that is where the bill needs to go next. However, Greenspan is confident in the future of sports betting legalization in Ohio.
“I’m confident we’re going to get it done, that to me has never been an issue, obviously the clock is an issue and COVID-19 is an issue right now but there is overwhelming support for the bill it’s just a matter of us having the ability to put it up for a vote and then getting it over to the Senate,” said Greenspan. “Hopefully the discussion there goes over rather quickly. The Senate has a bill as well but the differences between the two bills are not significant, they are significant in theory but not the overall goal for the bills.”
Greenspan believes that OH HB 194 has the best chances of making it to the finish line and becoming a law for the state of Ohio when compared to OH SB 111.
“We’ve had eight hearings and a number of amendments to the bill and the Senate has had two hearings and no amendments made to their bill so I believe our bill is further along in acceptance and its overall support,” said Greenspan.
“The main difference between the two bills is who actually has the authority to regulate and provide the oversight to the activity and I believe that the Lottery Commission is better suited and the Senate’s version of their bill would authorize the Casino Control Commission and that to me will be the largest single hurdle for us to get over but I believe we will because at the end of the day It’s irrelevant to the consumer,” said Greenspan.
“The issue is who has the infrastructure and who has the authority in order to support standing up sports gaming and the Lottery Commission already has the Constitutional authority to do it and they have the infrastructure to support the online component of sports gaming. The Casino Control Commission does not currently have the expertise or the staff or the authority to offer or regulate or manage sports gaming but the Lottery Commission already has the infrastructure in place and the authority by the Constitution.”
Making sports betting legal in Ohio is not something that is meant to bring in huge financial profits. It’s something to help bridge the gap but more so to make an activity that’s being done already be one that is regulated.
“This is an activity that we all openly acknowledge is happening illegally and so what we anticipate that by legalizing this, we will be able to absorb a lot of the illegal market over time,” said Greenspan. “The education system is the 98% benefactor of the revenue from the sports betting market with 2% going to sports gaming addiction related services.”
If House Bill 194 does not move forward as expected by the end of the year, it will need to be reintroduced next year for legalization.
Ohio Senate Bill 111 And Senator John Eklund
OH SB 111 would legalize sports betting at casino locations and through mobile platforms. Unlike the House bill, it wouldn’t allow for multiple retail locations for sportsbooks, limiting them to casino type establishments.
Under this bill, the Ohio Casino Control Commission (OCCC) would be the regulator of the sports betting market in the state. The tax rate is set at 6.25% for all revenue made from wagers on sporting events.
Speaking to Senator John Eklund about OH SB 111, there is currently nothing on the calendar for his bill.
“We are still in shutdown mode here in Ohio but there’s hope in the next few weeks we will start crawling out of that mode,” said Eklund. “The House bill takes a different approach than OH SB 111 does and it has been and remains somewhat unclear about the extent to which the House does or does not want to move their bill and if so whether there is going to be some way to reconcile it with the Senate Bill. I am hopeful and I have had conversations with others in the Ohio Senate and all of them feel that just because we’ve had this disruption that there is no reason to turn our backs on pending legislation that we thought was a good idea a month and a half ago because it is probably still a good idea. I am very very hopeful that we will be able to continue to move the sports gaming legislation over the course of the rest of this calendar year.”
When it comes to revenue, the Senate Bill has not discussed where sports betting profits would go. OH HB 194 stipulates where the money would go but the Senate Bill has not said a word and that was done on purpose according to Eklund.
“We can anticipate that Sports gaming in Ohio would generate some level of revenue for the state but I never thought it was going to be a gazillion dollars but at times like this, every little bit helps. The Senate bill is silent on where specifically the money would go and it’s purposefully silent because I wanted the legislative process to basically inform that decision so as we continue to have hearings on the Senate Bill I expect to hear from witnesses who have thoughtful and useful ideas of where that revenue could go,” said Eklund.
Sports Gambling Legislation By State Legislature
“I know I had a conversation with the Lieutenant Governor of Ohio, Jon Husted, some time ago who forwarded the idea that perhaps the pay to play fees at school districts could be covered by the sports gaming revenue stream. That’s one example of the kind of idea generation that the legislative process is creating so there is more to follow on that.”
Senator Eklund believes the biggest hurdle or opposition will come from the two bills and how they differ in the number of sportsbooks that could open. The House bill would allow many locations for sports betting while the Senate Bill would not. This may cause an issue as the bill progresses through the Legislature.
“The biggest hurdle will be, sort of the philosophical divide between expansive locations where this activity can be done with the House Bill whereas the Senate Bill restricts it to relatively few locations where it can be done. I strongly believe that this is not the kind of activity that we want going on in every gas station or convenience store in Ohio,” said Eklund.
Never having been one for mobile gambling platforms, Senator Eklund is now on board with that and legalizing sports betting which is why he created OH SB 111. He wants to make a safe environment for residents of the Buckeye State to wager on sporting events that they are already gambling on.
“If it can be done in a safe and secure way that has a lot of integrity to it, protects the public to the downside of gambling of any kind and can be done securely then I am in favor of it and I see no reason why we cannot meet those criteria, I really don’t. I was at one time opposed, inherently opposed to the idea of having sports gaming available online in Ohio but as I have studied it and heard from witnesses I have become convinced that the technology exists that would allow us to do that in a very very safe and actually maybe a safer and more controlled way than without online gaming and I have now become an advocate for it. I am extremely hopeful that we can get this done in 2020,” said Eklund.
Final Thoughts On Ohio Sports Betting Legalization
Both Representative Greenspan and Senator Eklund have a positive outlook on the legalization of sports betting in Ohio. Each agrees that the COVID-19 pandemic may stall the process as many other topics have to be discussed when the session reconvenes.
However, one thing is certain, legal sports betting is certainly on the lawmakers in the state’s radar and it is something that could very well occur in 2020 in terms of becoming a law.
News tags: 5 House Bill 194 Dave Greenspan John Eklund Jon Husted+96 OH HB 194 OH SB 111 Ohio Ohio Legislature Senate Bill 111
Christina has been writing for as long as she can remember and does dedicated research on the newly regulated sports betting market. She comes from a family of sports lovers that engage in friendly bets from time to time. During the winter months, you can find Christina baking cookies and beating the entire staff at Mario Kart…the N64 version of course.