American States Free to Legalize and Enforce Sports Betting

17 May 2018

us sports betting

According to a new decision taken by the Supreme Court of the United States, each state will now be allowed to legalize and tax sports betting according to its own regulatory system. Up to now, the Professional and Amateur Sports Protection Act (PASPA) prevented the legalization of sports betting in American states that had not previously allowed such activities.

Each state allowed to pass its own legislation

All states except Nevada were prohibited to enforce any sports betting operations up to this point in time. Now, the Professional and Amateur Sports Protection Act, a 1992 law that banned states other than Nevada from operating a sportsbook, was annulled. Following this decision, nationwide gambling won’t be legalized, but each state will be allowed to pass its own laws regarding sports betting.

Sportsbook operators will soon have the opportunity to work in a legalized market, with adequate protection for consumers, which doesn’t exist today. Even if there’s no official accounting of the size of the sports betting black market in the US, it has been estimated that it reaches up to $150 billion per year. While the figure has no real basis, it does have real impact. Numerous states need more tax revenue. With a new system put in place, the potential revenue from legalized sports betting in the US could reach anywhere between $2 billion and $5.8 billion annually. A cut from this sum will go to the coffers of the states which legalize the sportsbook industry.

Legislation already pending in 12 states

Interesting enough, twelve states are already on hold for introducing legislation after the annulment of PASPA. Many of them are expected to quickly move towards getting a slice of the sports betting industry in the US. The Center for Gaming Research at UNLV has already predicted that American states will legalize sports betting within two to seven years, depending on factors such as attitude towards gambling, pending legislation and budget.

The states which seem most likely to legalize in the shortest amount of time (within two years) are New Jersey, Delaware, Pennsylvania, Colorado, Connecticut, Indiana, Massachusetts, Michigan, Mississippi, Montana, Ohio, Virginia and West Virginia. According to researchers at Eilers & Krejcik Gaming, more than 30 states could start the process of legalizing the industry by the end of this year.

Sports leagues expected to ask for a cut of the money

Sports leagues are expected to ask for a cut of the money, or at least to see extensively increased revenue streams from sponsorships, advertisements and broadcast rights. NBA senior vice president Dan Spillane explained that "it is reasonable for operators to pay each league one percent of the total amount bet on its games". Even so, we could expect sports leagues to negotiate a different, more favorable figure.

US online sports betting - the next step

The annulement of the PASPA come as great news for online sports betting operators based in the US, who are already running operations overseas. There are many controversies about online gaming in the US, with only 4 states allowing operators to run remote casinos at the moment. More than that, only Nevada currently extends their online gaming operations to sports betting.

When it comes to online sports betting, there will most certainly exist differences state by state. Not even the US online casino gaming industry has settled yet, so it’s too soon to say anything about how online sports betting will develop in the near future. It is expected that casinos will strictly limit online bets to players within state borders, using geolocation services that will ban any fraudulent users.

The decision taken by the Supreme Court will certainly revolutionize the betting industry in the US, with a system where consumers will be protected, integrity will be promoted and commercial opportunities will flourish.

17 May 2018

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