More States Are Allowing Online Sports Betting

What is sports betting?

Sports betting, commonly known as Sportsbook or Sport Booking is the act of placing monetary bets on the outcome of a sporting event. Historically, these bets were recorded or booked with payouts doled out based on the results. Since 1992, Congress’s PASPA prohibited such betting both online and in person, with a few notable exceptions (Namely Nevada and a handful of other States).  Even in-person betting on sports have not been allowed in most states until recently.

How has online sports betting changed the process?

Traditionally, placing bets, or Sports Booking, legally could only be done in person by visiting a Sports Booking Operator. Acting as digital clearinghouses, Sports Booking Apps process payment, register betting decisions, provide real-time stats, and update the operator and players instantly. 

What made sports betting acceptable?

The ban on sports betting ended when the Supreme Court ruled against PASPA’s constitutionality in 2019 and struck the law down. Since then, many states have been feverishly working to enact regulations to control this new industry.

Each state’s stance on regulating online sports betting and the potential impact of such regulations on operators and players within those jurisdictions are described below.

Why is the US States interested in Online Sports Betting?

The simple answer is that legalized wagering generates additional income for the state from tax revenues. Since the federal ban was struck down in 2019, more states are looking at the potential tax dollars for increasing state revenues to fund their State Budgets.

How did the repeal of PASPA change the industry?

• Sports Leagues – Since the repeal, the 4 Major Professional US Sports Leagues (NBA, NFL, MLB and NHL) have forged partnerships with Sports Betting Operating organizations in one way or another.
• Pro and College Sports Teams – Official sports booking channels, allowing fans to wager on their favorite teams, have been created by many sports teams directly.
• Coronavirus Impact – Since the start of the COVID-19 Pandemic, visitors weren’t filling brick-and-mortar Casinos.  Consumer behavior and tourism was down so states like Nevada that relied on tourism revenue had to look at new ways to bring income back to the state.  Leveraging their digital gaming reach has become key to filling the income gap.
• Consumer Behavior – Ease of use of mobile devices, faster and virtually constant connectivity to the internet has spurred the proliferation of engaging gaming apps, including from many major sports brands, have put users at ease about wagering online.

Who are the Industry Players meeting the growing demand for Online Sports Betting?

A plethora of new companies have entered the market to meet the demand from gamers eager to wager online.

The top sports betting Apps today:

• Fanduel – Fanduel, a long-time provider of their daily fantasy sports app, now offers Fantasy, Sportsbooks, Online Casino, and Horse Racing 
• Draftkings–  Launched in 2018, Draftkings became  New Jersey’s 1st authorized mobile betting operator
• Foxbet – Foxbet provides a year-round wagering platform for players to bet on NFL, NHL, MLB, NBA as well as College Basketball and College Football
• BetMGM – MGM, the Casino Operating Franchise, created this app to connect players to MGM’s sports betting and online casino games
• Pointsbet – Established in 2019, this new entrant has been connecting players to sports betting operators online
• BetRivers – Operated by the brick-and-mortar Casino Rush Street, it is also known as Rivers Sportsbook
• Sportshandle – Founded in 2017, is a subsidiary of USBets
• William Hill – William Hill PLC, a licensed provider of betting offices in Great Britain and Northern Ireland since 1934, now also offers an Online Sports Betting app that complements their retail casino operations in Nevada, New Jersey and other US States
• Station Casinos – Station Casinos, a retail casino operating in Nevada, now offers an online sports betting app

Top online sports betting Platforms:

By providing the core technologies to casinos and gaming brands, these companies help the online sport betting industry thrive:

• GAN – A software-as-a-services provider, GAN connects players and operators by providing a  platform for their operator customers to build out their online gaming experiences for Sportsbook play, Simulated Gaming, and iCasino 
• IGT – Headquarters in London and with major offices in Rhode Island and Nevada, IGT provides operators with slot machines and gaming software
• Scientific Games International – Headquartered in Las Vegas, and with Lottery Headquarters in Alpharetta, GA, IGN provides physical hardware (i.e., Mechanical Slot Machines) or software that supports gaming operators in delivering the gaming service.

Why are Gaming Operators adopting Online Sports Booking?

Reaching players at scale with instant, secure, and verified payments and gaming orders is the biggest advantage of Operators who leverage Online Sports Booking.  Key advantages include:

• Scale – Online Sports Betting operates at scale and can reach countless users instantly, removing the need for high minimums.
• Innovation – The mobile and online delivery of gaming apps offers brands and operators the ability to introduce new games and features that keep users engaged and draws in new users more quickly and economically than doing so in physical venues.
• Verification – Checking for available funds and verifying identity before betting takes place, are key to qualifying a player.   Location verification has also become a crucial and frequently mandated element of this digital sportsbook “handshake”. Together these measures protect both players and operators from fraud and abuse.

Is online sports betting legal?

Since the federal ban was struck down in 2019, States have been deciding whether to permit Online Sports Betting in their state. Prior to PASPA, Sports betting was unregulated.

Why does the treatment of sports betting vary from state to state?

Regional differences such as culture, values, economics, and population demographics are the major factors that set the states apart. As a result, each state leverages its authority over its new gaming industries in line with those factors leading to varying regulations from state to state.

Where is online sports betting permitted?

There are various degrees of “legality” when it comes to gambling. Not all states treat gambling (and by virtue online sports betting) the same way.

We summarize the States that allow Online Sports betting below.

As of 2022, the following states allow full online sports betting:

Arizona

Arizona approved online sports betting in September of 2021.  A number of sports betting applications are now live and offering bonuses to welcome new players and entice returning ones to continue playing.

Arkansas

One of the latest states to approve online gaming, Arkansas is now home to a handful of sportsbooks.  Since the launch of the first application in April of 2022, more operators have announced their plans to join.  

Colorado

Since May 1, 2020, Colorado offers online wagering from licensed casinos with a growing number of different platforms to play on, including some from local casino retailers.

Connecticut

Legal online sports betting and casino games went live on October 19, 2021. In the state of Connecticut wagering is legal both via mobile apps and in-person at physical sportsbooks now. 

Illinois

In 2019 Illinois opened the doors to both Online and In Person sports booking at the same time. A number of operators providing a diverse set of offerings showed up in 2020 to answer the demand.

Indiana  

Since 2019, Indiana permits Mobile sports betting within  state boundaries since 2019 with special exceptions for Esports and High School Sports..

Iowa

Iowa Racing and Gaming Commission regulates Online and Mobile legal sports betting. Since 2019 Online operators pay a licensing charge and taxes to be allowed to provide the wagering services.

Kansas

Sports betting was signed into law on May 12, 2022.  A number of operators are already live and taking bets.

Louisiana

January 28, 2022, is the official commencement date of mobile sports betting in the Pelican State.  All forms of sport wagering are allowed.

Michigan

Since January 2021 Michigan allows sport booking within state lines and at their retail casinos. 3 casinos started operating sport betting in March 2020, right before the Coronavirus Pandemic. In January 2021 the program expanded to include Online Sports betting as well.

Mississippi

In Mississippi, wagers are required to be placed while inside a casino gaming property.  Mississippi has dipped its toes in sports booking however the state still hasn’t fully embraced mobile wagering.

Montana

The state is opting for on-premise booking as opposed to full online wagering.  Laws passed in June 2019 have made booking legal and is supervised by the state’s lottery. Wagering however will need to take place at kiosks and in licensed areas only.

Nevada

The state that is synonymous with Wagering & Casinos allows in-person and mobile sports booking. However, a player will need to register in person, first. There are plenty of online sportsbooks services to play within state lines.

New Hampshire

Sports betting has been legal in New Hampshire since 2019.  Online sports betting is legal however, the only option is DraftKings. Bets can also be placed through licensed online sportsbooks from anywhere in New Hampshire.

New Jersey

Fanduel was the 1st online sportsbook in New Jersey that lead the charge to repeal PASPA. This early adopter state permits In-person and Online sportsbook gaming by players. 

New York

As of January 2022, sports betting is allowed online from anywhere in the state. Nine sportsbook apps are already up and running in the state. 

Oregon

Players, age verified to be 21, are allowed to place bets on sports games, however, wagering on college games is only allowed by working with licensed Native American Casinos. Generally, this frontier state has a largely permissive attitude towards legal sports betting.

Pennsylvania

As one of the first states to allow online sports betting, Pennsylvania offers mobile sports booking within state lines to its large population of diehard fans who follow the Big Sports Teams.

Rhode Island

Rhode Island dabbled in In-Person Sports Betting in 2018, before ultimately changing its stance to allow online sports booking in 2019.

Tennessee

Deviation from the rest of the states, Tennessee is the first Mobile Only Sports booking state. Since Nov 2020, 4 companies have been operating with more operators waiting to get the chance to participate.

Virginia

Virginia’s first Sports Booking platforms launched in Jan 2021. Draftkings, RiversBet, MGM, and a few of the above-mentioned apps have entered the market since. College and High School / Youth games cannot be wagered on.

Washington DC ‍

Although the District of Columbia is not a state, it bears mentioning that Online Sports Booking began in June 2020. With no state regulatory structure to lean on, The Federal Office of Lottery and Gaming stepped in to oversee the district’s new gaming industry.

West Virginia

West Virginia permits Sports betting by State-Licensed Casinos and their digital platforms allowing In-person and Online booking within the state.

Wyoming

Wyoming sports betting launched in 2021 with DraftKings and BetMGM becoming the first online sportsbooks.  Today there are four sportsbook apps available in the state. 

Similarities in States’ Online Sports Booking Laws

There are a few commonalities among the states that have legalized Online Sports Booking:

• Lottery and Gaming Commissions – Some states have empowered their existing lottery and gaming commissions to develop regulations and oversee the rules and operators.
• Online vs. In-Person Treatment – Many of the states mentioned above legalized In-Person sports booking as a result of the PAPSA repeal in 2019 and then subsequently moved to allow online sport booking platforms.
• Coronavirus Pandemic – In 2019, society still hadn’t seen the effect of the Coronavirus Lockdowns but as a result of reduced casino attendance, retail casino and online casino operators mobilized to meet demand.
• College and High School Sports – Many of the listed states specifically prohibited wagering on College and Youth sports to protect those athletic programs. Additionally, states that allow wagering on college games, often have additional restrictions for them (e.g., specific venue, physical location, limits online).

Looking at the Legislation Breakdown above, it’s clear that there are common patterns, yet no two states handle Sports Booking exactly the same. 

So how are Geolocation Services a factor?

Location verification for geographic compliance is a critical factor for Gaming Operators. State laws are very clear and inflexible when it comes to online sports booking. As a result of this burgeoning industry, operators and their platform providers use the power of cloud-based platforms to validate identity, confirm adequate wager call funds, and verify user location through web services APIs – creating seamless gaming experiences.

Locance offers a comprehensive, real-time cloud-based multi-source geolocation service to enable geolocation validation for Mobile Gaming Operators. Our secure, enterprise-grade API platform is used by operators as part of their regulatory compliance strategy.

About Locance

Locance is the leader in geolocation compliance for gaming and lottery. We have helped global operators in the US, Canada and Europe to verify the location of user transactions and get the “green light” to place wagers and enjoy their mobile gaming experience.

Learn how Locance helps with Internet Gaming Compliance and grab our Mobile Gaming Product Brief.

Find out how our customers get compliant with geolocation regulations. Read our Mobile Gaming White Paper.