What is sports betting?
Sports betting (also known as SportBooking or SportsBook) is the act of wagering on the outcome of a sporting event.
Historically, these bets would be recorded or booked and payouts would be doled out based on the results.
Since 1992, Congress’s PASPA has prevented such booking both online and in person, with a few notable exceptions (Namely Nevada and a few other States).
What is online sports betting?
As mentioned above, the traditional Sports Booking process was going to a Sports Booking Operator and place your bets. Even though the technology has changed: Sports booking Apps process payment, registers betting decisions & updates the operator instantly. Sports Betting Apps act as digital clearinghouses for bet calls & payouts.
Why is sport betting becoming more accepted?
The Supreme Court Struck down PASPA in 2019, essentially ending the ban on sports betting. As a result, many states are scrambling to figure out how they will regulate this new industry.
We break down each state's stance on regulating online sports betting and what that would mean for operators and players within though jurisdictions.
Why are States in the US looking to permit Online Sports Betting?
Since the 2019 federal ban was struck down, states get to choose. More states are looking at state revenue increases as a way to secure some additional tax dollars added to the State Budget.
As a result of the repeal of PASPA, what other industry changes are occurring?
The repeal of PASPA has created a surge of business and legislative momentum.
- Major Sports Leagues - The 4 Major American Sports (NFL, NBA, MLB & NHL) Leagues have created a partnership with Sports Betting Operating organizations in one way or another since the repeal.
- Major Sports Teams - Some major sports teams are making moves to create official sports booking channels that allow fans to wager on their favorite team.
- Coronavirus Tourism - The Pandemic has altered consumer behavior and tourism has been down. States like Nevada that relied on tourism participation are looking at new ways to leverage their gaming reach. Simply put, Casino visitors aren’t filling their venues just yet and Online sports betting is growing.
- Mobile Consumer Behavior - In 2021, users are super comfortable with mobile devices, and gaming technology is developed enough to provide engaging gaming experiences.
What Companies have been created to meet this new demand for Online Sports Betting?
There has been a flood of new companies that help gamers play online.
Who are the top sports betting apps:
- Fanduel - Fanduel has been a fantasy sport wagering app since 2009. Fanduel has expanded to include Fantasy, Online Casino, Hores Racing and Sportsbooks
- Draftkings- Draftkinds launched in 2018, making it the 1st legal mobile betting operator in New Jersey
- Sportshandle - Founded in 2017, and is a subsidiary of USBets
- Foxbet - Foxbet allows for year-round wagers on NFL, NHL, NBMA, MLB as well as College Basketball and College Football
- BetMGM - The Casino Operating Franchise, MGM has created this app that connects the player to their sports betting and online casino games
- Pointsbet - A newer entry, PointsBet has been connecting players to sports betting operators online since January 2019
- BetRivers - is also known ad Rivers Sportsbook and is operated by the brick and mortar Casino Rush Street
- William Hill - William Hill PLC started operating in licensed betting offices in Great Britain and Northern Ireland as early as 1934. They offer an Online Sports Betting app that is an extension of their retails casino operations in Nevada, Nw Jersey and other US States
- Station Casinos - Station Casinos are a retail casino operating in Nevada and now offer online sports betting app
Top online sports betting platforms
While not strictly sports betting apps, these companies help the online sport betting industry thrive:
- GAN - GAN is a software-as-a-services provider that connects players and operators. Their platform helps their operator customers build out their online gaming experiences for Simulated Gaming, iCasino, and Sportsbook play
- IGT - IGT has headquarters in London and major offices in Rhode Island and Nevada. IGT provides operators with slot machines and gaming software
- Scientific Games International - Headquartered in Las Vegas, but with Lottery Headquarters in Alpharetta, GA, IGN helps operators by providing either the physical hardware (IE Mechanical Slot Machines) or software that supports gaming operators
What are the advantages for Gaming Operators who use Online Sports Booking vs Traditional Sports Booking?
Operators who leverage Online Sports Booking reach players at scale with instant, secure, and verified payments & gaming orders.
Scale - One advantage of Online Sports Betting is that it operates at scale and can reach countless users instantly, removing the need for high minimums.
- Verification - Often Gaming Operators will ask users for funds and identification validation prior to any betting taking place and as you can read below, Location has become a crucial layer of this digital sportsbook “handshake”.
Is online sports betting illegal?
The 2019 federal ban was struck down. Since then, States have chosen individually whether Online Sports Betting is permitted in their state. Prior to PASPA, Sports betting was unregulated.
Why do different jurisdictions treat sports betting differently?
Each state leverages its authority over its new gaming industries and we see stark differences based on their region, culture, values, and population demographics.
In what states is online sports betting legal?
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 are breaking down only the States that allow Online Sports betting.
The states in 2021 that allow full online sports betting:
Since May 1, 2020, Colorado offers online wagering from licensed casinos. The state offers many different platforms to play on, including some from local casino retailers and the number keeps growing.
Illinois opened the doors to both Online and In Person sports booking at the same time in 2019. Providers showed up less than a year later in 2020 to answer the demand.
Indiana permits Mobile sports betting within state grounds since 2019. Special exceptions include High School Sports & Esports.
Iowa has offered Online and Mobile legal sports bets since 2019. Online operators pay a licensing charge and taxes while being supervised by Iowa Racing and Gaming Commission.
Online sports betting began in January 2021. Michigan allows sport booking within state lines or at their retail casinos. This program launched with 3 casinos operating sport betting in March 2020, right before the Coronavirus Pandemic. Since Jan 2021, the state offers to Online Sports betting as well.
Mississippi dipped its toes in sports booking in 2018. However, the state hasn't fully embraced mobile wagering since wagers are required to be listed while inside a casino gaming property.
Laws passed in June 2019 have made booking legal and is supervised by the state's lottery. The state is opting for on-premise booking as opposed to full online wagering. Wagering will need to take place at kiosks and in licensed areas only.
As one might expect, the state that is synonymous with Wagering & Casinos allows in-person and mobile sports booking. A player will need to register in person, first. There are plenty of online sportsbooks services to play within state lines,
New Hampshire legalized online sportsbooks in Dec 30, 2019. The historic first wager was placed on the New England Patriots. Betting on College Games is prohibited.
In-person and Online sportsbook gaming is available for players in this early adopter State. Fanduel was the 1st online sportsbook in the state that lead the charge to repeal PASPA.
This frontier state has a largely permissive attitude towards legal sports betting. Players will be age verified (age 21 or older). but cannot wager on college games unless working with licensed Native American Casinos.
Pennsylvania has a large population, Big Sports Teams and Diehard fans. As one of the first states to allow online sports betting, Pennsylvania offers mobile sports booking within state lines.
Rhode Island dabbled in In-Person Sports Betting in 2018, before ultimately changing its stance to allow online sports booking in 2019.
In a twist on the formula, Tennessee is the 1st Mobile Only Sports booking state. Since Nov 2020, 4 companies are operating and more operators are waiting to get their chance.
Virginia’s first Sports Booking platforms launched Jan 2021. Draftkings, RiversBet, MGM, and a few of the above-mentioned apps have entered the market already. College and High School / Youth games cannot be wagered on.
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.
In-person and Online booking is available in West Virginia. West Virginia permits Sports betting by State-Licensed Casinos and their digital platforms.
Common Patterns are seen in State’s Online Sports Booking Laws
There are a few commonalities between the states that the states who have legalized Online Sports Booking have:
- Lottery and Gaming Commissions - To meet the regulatory demand, some states have pushed to have their existing lotto and gaming commissions step in to oversee the rules and operators.
- Online and In-Person are treated differently - Many states above legalized In-Person sports booking and then later moved to allow online sport booking platforms, especially in light of the Coronavirus Pandemic.
- Coronavirus has prompted In-Person Casinos and States to React and Reach Players - When many states opened the door to In-Person sports booking in the wake of the repeal of PASAP (2019), society still hadn’t seen the effect of the Coronavirus Lockdowns. As a result of reduced casino attendance, retail casino and online casino operators mobilized to meet demand.
- College and High School Sports deserve special protection - Many of the states above have demonstrated that College and Youth athletics need to stay out of sports booking wagering. Additionally, if a state offers the chance to wager on College games, it often comes with restrictions (specific venue, physical location online etc etc)
Looking at the Legislation Breakdown above, it’s clear that No State necessarily handles Sports Booking the same. But how does location come into this?
Location Verification is crucial for Gaming Operators
State laws are inflexible when it comes to online sports booking. As a result of this burgeoning industry, software creators have built APIs to validate identity, adequate wager call funds, and geolocation - creating seamless gaming experiences.
LocationSmart offers a comprehensive,secure real-time API to enable geolocation validation for Mobile Gaming Operators. We help operators with location-based validation tools to ensure gaming compliance.