Disclaimer: I am not a lawyer nor am I offering legal advice about online sports betting. The below article is based off my personal research and interpretation of available information. Dilly Dilly.

As the Supreme Court ponders the legality of sports betting in the United States, I figured this article needed an update and some added information. In case you haven’t been following the Supreme Court case, let’s quickly review what is happening in the U.S. court system before diving into online sports betting.

Back in 1992, Congress passed the Professional and Amateur Sports Protection Act (often referred to as PASPA) to effectively outlaw sports betting nationwide, excluding a few states (Nevada, Oregon, Delaware, and Montana). New Jersey in particular has been fighting this law since 2011, when state voters approved a referendum to allow sports betting to take place at New Jersey race tracks and Atlantic City casinos. Despite federal law preventions, the state legislature of New Jersey and Governor Chris Christie signed the bill into law in 2012, daring anyone to “try to stop (them).”

So far, that's exactly what the NCAA, professional sports leagues and the federal government have done as a legal sports bet has yet to be taken in New Jersey. The state and Governor Christie have lost their case in each court appearance but have appealed every time, and they now have their chance with the United States Supreme Court. The highest court in the land listened to oral argument on December 4, 2017, and according to many law experts, the questions asked by the judges provided optimism for New Jersey and a possible repeal of PAPSA; and thus the potential for legalized sports betting.

An actual decision is not expected until late spring, so we will have to wait and see. I will write more about the case and the possible outcomes in the future, but those main details are all we need to know for now. For more in-depth coverage of the case, check out David Purdum’s article on ESPN Chalk.

As of January 2018, sports betting in the United States is still illegal. But what about online? Well, that’s an entirely different question. To better explain, I’ll breakdown the various regulations that patch together the United States’ laws on sports betting.

Professional and Amateur Sports Protection Act (PAPSA)

According to PAPSA, “it shall be unlawful for a governmental entity or person to sponsor, operate, advertise, promote, license, or authorize by law or compact a lottery, sweepstakes, or other betting, gambling, or wagering scheme based, directly or indirectly (through the use of geographical references or otherwise), on one or more competitive games in which amateur or professional athletes participate, or are intended to participate, or on one or more performances of such athletes in such games.”

Basically, operating a sportsbook and/or accepting bets in the United States, in-person and on-line, is a crime. Nevada is of course an exception, and Oregon, Delaware and Montana also have their own variations of limited legal sports betting.

However, there are no prohibitions on the actual act of sports betting within PAPSA. At the federal level, no crime is committed if you log on to an online sportsbook (whether it is based in the U.S. or overseas) and place a sports bet. The U.S. Department of Justice does consider online sportsbooks illegal gambling operations and therefore treat them as criminal, but not their users.

Federal Wire Act

Before PAPSA was passed, the Federal Wire Act of 1961 was the predominant law prohibiting certain betting activities. According to the legislation, “Whoever being engaged in the business of betting or wagering knowingly uses a wire communication facility for the transmission in interstate or foreign commerce of bets or wagers or information assisting in the placing of bets or wagers on any sporting event or contest, or for the transmission of a wire communication which entitles the recipient to receive money or credit as a result of bets or wagers, or for information assisting in the placing of bets or wagers, shall be fined under this title or imprisoned not more than two years, or both.”

When attempting to understand that legal jargon, it appears this law applies to both bookmakers and bettors. However, legislative history of the Wire Act (hearings, legal opinions, etc.) seem to support that casual bettors would fall outside the judicial reach of the law.

During the House of Representatives debate on the bill, Congressman Emanuel Celler, Chairman of the House Judiciary Committee stated "this bill only gets after the bookmaker, the gambler who makes it his business to take bets or to lay off bets. It does not go after the causal gambler who bets $2 on a race. That type of transaction is not within the purview of the statute."

Furthermore, in the United States v. Baborian (1981), a federal district court concluded that Congress did not intend to include social bettors within the umbrella of the statute, even those bettors that bet large sums of money and show a certain degree of sophistication.

More recently, the U.S. Fifth Circuit Court of Appeals ruled in 2002 that the Wire Act prohibits electronic transmission of information for sports betting across telecommunications lines, but affirmed a lower court ruling that the Wire Act "in plain language does not prohibit Internet sports betting or gambling on a game of chance."

To sum this up, again there is no federal law against betting sports online as a player. The Wire Act was initially passed to make interstate gambling illegal as well as help the U.S. Justice Department stop organized crime trafficking. Because of this, it does not extend to recreational bettors or online gambling, and as far as I can find, no U.S. citizen has ever faced federal charges for gambling online.

Unlawful Internet Gambling Enforcement Act

But wait, there’s more! Another piece of legislation attempting to regulate online gambling was passed in 2006 called the Unlawful Internet Gambling Enforcement Act (UIGEA). This was one of the most controversial gambling bills in history, not because of its contents, but because of how Congress passed the law. With underwhelming support, top lawmakers realized the only way UIGEA could pass Congress is if it became a rider to must-pass legislation.

Enter the SAFE Port Act, which otherwise regulated port activity and funded counter terrorism. The bill passed right before Congress adjourned in 2006, with many members never seeing the final draft of the bill. The Economist even wrote that these provisions were "hastily tacked onto the end of unrelated legislation.”

Regardless, UIGEA passed and the law “prohibits gambling businesses from knowingly accepting payments in connection with the participation of another person in a bet or wager that involves the use of the Internet and that is unlawful under any federal or state law." Once again, being a player and placing bets is not defined as illegal in this bill, and overall it did not make anything new illegal.

Basically, it added a layer of enforcement against individuals and companies processing payments for illegal internet gambling, which was not defined by previous laws. This made financial transactions between U.S. banks and gambling site operators illegal. This is why you cannot simply deposit money from your checking account to an online sportsbook.

However, many online sportsbooks have been able to work around this restriction by using offshore payment processors, which is why you can make deposits to your sportsbook account with a credit or debit card. As long as it’s not obvious you’re sending money to an online gambling site (which sportsbooks know not to do), it will likely process. And as described above, the law is enforced against businesses, banks and payment processors – not the bettor. If you use a credit/debit card, it’s on your bank for approving the transaction.

NOTE: Using a crypto-currency obviously eliminates all of these issues, which is why sportsbooks are accepting and promoting this form of deposit more and more.

Wrapping It All Together

To bring this all home, there are four main takeaways to consider in respect to the United States’ taped-together sports betting laws:

• It is illegal to operate a sportsbook and accept bets
• It is illegal to send bets and gambling information between states via telephone networks (NOT the internet)
• It is illegal to accept and process payments for gambling purposes
• It is NOT illegal to place a bet and use online sportsbooks

Based on my research, it appears online betting at the consumer level is NOT a crime. The betting sites themselves are mostly located in Costa Rica, Antigua, and Panama, which are all locations outside U.S. jurisdiction and are also locations where sport betting is fully legal.

On the federal level, online gambling can be considered legal because of the lack of a law against it. It's possible to get in trouble with state law, especially in very conservative states, but even then, prosecution is extremely rare. Due to the variable laws with each state though, this article focused on federal law. Please check your state's laws to determine the legality of these activities where you live.

So, is sports betting online legal in the United States? The short answer is that it is NOT against the law (as far as I can find). However, it is not explicitly legal, either. The long answer is a very complicated timeline of hearings, legislation, and court cases that were briefly mentioned above.

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