The future of online gambling in the USA

Online gambling is popular worldwide, and the industry has been growing over the years, as increases in technology have enabled developers to create more sophisticated offerings improving the player experience, and the advent of the smart phone, increased connectivity and affordability of technology have made gambling on the go more and more accessible to individuals. It is expected that by 2023, the global market for online gambling will be worth over US$90 billion.

Gambling in the USA

The USA, however, has always had a complicated relationship with online gambling. As a federation of states, federal and state law have at times been at odds with each other, and through the last couple of centuries laws have come and gone allowing different types of gambling, and that have more recently targeted online gambling and sports betting.

  • The Federal Wire Act 1961 prohibits gambling that crosses state lines, so gambling in your own state is fine, but placing a bet with a bookie in a neighbouring state is not.

  • The Unlawful Internet Gambling Enforcement Act 2006 makes it illegal to operate an online gambling site anywhere in the USA (this does not include daily fantasy sports platforms).

  • The Professional and Amateur Sports Protection Act (PASPA) 1992, didn’t make sports betting illegal, but prevented states where it was not already in place from starting up.

  • PASPA was overturned by a Supreme Court ruling in 2018, allowing states to make their own decisions on sports betting (citing state laws and freedoms).

  • Sportsbooks are legal, depending on state legislature.

Online Casinos

Federal Legislation does not outright ban online gambling, but the restrictions from different acts makes it difficult for states to have their own online casinos. There are several sites based outside of the US that cater the American customers. Additionally, individual gamblers are unlikely to be prosecuted if they fall foul of the laws so many Americans gamble with confidence, although this is an untapped market.

As recently as August 2020, there have been developments which have relaxed legislation, and now states can decide if they want to legalise online gambling. The issue of crossing state lines still applies, but this is a step in the right direction for online casinos. Currently, New Jersey, Pennsylvania, West Virginia, and Delaware have legalised online casinos. One long established casino operator is 888 Casino, which offers traditional casinos games in the form of live casino, as well as the brand operating within the sports betting market

Sports Gambling

Prior to PASPA, there was a perception that sports betting was creating corruption and ruining sports. There were notable scandals that called into question the integrity of sports when betting was allowed, such as the Black Sox Scandal, the 1951 College point-shaving scandal and the 1985 cash and cocaine college balls. PASPA banned sports betting in all states except Nevada, and grandfathered in legislation already present in Delaware, Montana, and Oregon. Although there were many issues with PASPA, not least pushing gamblers into the arms of unscrupulous black-market bookies, the Supreme Court overturned PASPA because it was a violation of the 10th Amendment of the US Constitution, giving each state sovereign rights over what they could and couldn’t do.

As of 2018 after PASPA was overturned, many states took the steps required to draft legislation to bring in legal sports betting. So far, 20 states have passed bills legalising sports betting, including Delaware, way back in June 2018 just after PASPA was repealed, all the way to Tennessee, which passed legislation in November 2020. All but three other states, Utah, Idaho, and Wisconsin, have some sort of legislation in the pipeline. Utah’s constitution explicitly prohibits all betting.

Benefits of Legal Betting

  • Increased Revenue for the government. In Canada, where betting is legal, it is estimated that betting contributes many billions to the economy though taxes.

  • Over 45 thousand jobs are created by the industry in Canada.

  • In the UK, gamblers have a wide variety of sites to chose from, and do not end up using unlicenced and unregulated sites

  • Where betting is legal, people do not need to resort to using shady bookies to place bets

The future of gambling in the US is heading in the right direction to take full advantage of the market potential and bring legislation in line with that of most other countries. As US states work to decide the future of the gambling in their states, religious, cultural, and political pressures will influence developments. But with many states looking to take advantage of the benefits of licenced gambling, and steps taken over recent years and months to increase engagement in state sponsored gambling, only time will tell how long it will be until antiquated acts are challenged.