The United States has a long and complicated history with online betting, but the legal picture is slowly coming into focus with the end of the federal sports betting prohibition and numerous states opting to legalize various forms of online gaming.
Multiple states now have legal online sports betting, racing betting, fantasy sports, casino games and poker. Discussions at the state level are beginning to trend more toward how online betting should be legalized and away from if it should be legalized.
The state-by-state approach does lead to some confusion regarding what’s legal and where, but we’ll clear that all up shortly. To begin, let’s start with a look at the major US betting sites that are legal across most of the country:
Best US Betting Sites
US Online Sports Betting Sites
Until recently, online sports betting was prohibited in the United States at the national level. The Professional and Amateur Sports Protection Act of 1992 (PASPA) outlawed sports betting across the entire country minus an exception for Nevada and for a few specific forms of sports games offered by several state lotteries at the time PASPA was enacted.
Under PASPA, Nevada had a monopoly over single game sports betting in the United States. Other states did not have the option to legalize sports betting even if they wanted to during the PASPA days.
Nevada’s monopoly came to an end in May of 2018 when the Supreme Court of the United States ruled PASPA unconstitutional. This development gave states such as New Jersey, Pennsylvania, West Virginia and others the authority to legalize in-person and online sports betting.
The first US online sportsbooks have since gone live and are fully legal under both state and federal law.
States That Have Legalized Online Sports Betting
The following US states have legalized mobile sports betting apps and online sportsbooks.
- New Jersey
- New Hampshire
- Rhode Island
- Washington DC
- West Virginia
States That Have Legalized In-Person Sports Betting
The following US states have legalized retail sportsbooks:
- Montana (self-serve kiosks)
- New Hampshire
- New Jersey
- New Mexico
- New York
- North Carolina
- Rhode Island
- Washington DC
- West Virginia
Online Horse Racing Betting
Online horse racing betting has long enjoyed a privileged legal status in the United States with exemptions from the Wire Act, PASPA, and the UIGEA. Even during the darkest days of the sports betting prohibition, online horse racing betting carried on in the open at legal, licensed betting sites.
The first horse racing sites appeared in the USA during the mid-2000s and remain active to this day. Sites such as BetAmerica and TwinSpires have been active for years as trusted places for people to bet on horse and greyhound races online.
US gaming laws require all racing betting sites to have permission from the various racetracks on which they accept wagers, so everything is above board. Even better – all wagers placed online are pooled with wagers taken in-person at the track. This means you are paid at the same odds as everyone else, even if you place your wagers from hundreds of miles away.
The one thing that causes some confusion is which sites are legal in which states. Each state has its own racing betting laws – some states allow some online racebooks but not others. Some states prohibit online racing betting altogether.
For the most part, the United States is pro-racing. Most people reading this may bet on horses online at the major betting sites. If you try to sign up at a licensed betting site and are rejected, it is most likely due to living in a state where that site lacks a license.
States with Legal Online Racing Betting
- Green = online racing betting is legal
- Red = online racing betting is not legal
Online Poker in the USA
Online poker has had its ups and downs in the United States. At one point in the early 2000s, it seemed like poker was taking over the world with TV shows on ESPN, poker sites boasting tens of thousands of active players and major tournaments handing out million-dollar prizes online.
The passage of the Unlawful Internet Enforcement Act of 2006 (UIGEA) brought that all to a grinding halt as it pushed most of the major operators out of the United States. A few stalwart poker sites remained open to US players, but legal concerns and difficulty in processing payments led to a major contraction in the US market.
Now, online poker may be in the midst of a comeback with several states choosing to legalize and regulate online poker. Three states now have poker sites that are legal, licensed and safe:
- New Jersey
Players who experienced online poker during the golden years should tamper their expectations, however. With just four states now offering online poker, there are way fewer players online today. US poker sites have a bright future, but there is still plenty of room for improvement on the legislative side of things.
In the meantime, players in the aforementioned states may log on to play cash games and tournaments just like you would find in the real world. Texas Holdem and Omaha tend to dominate, but other games such as 7 Card Stud can also be found online (although without much action currently).
US Online Casinos
Online gambling has followed a similar path to online poker in the United States so far – both experienced a period of almost no regulation and both were hit hard by the UIGEA in 2006. And then, both received a break in 2011 when the Department of Justice issued an opinion stating that the Federal Wire Act only applies to online sports betting.
That decision paved the way for states to regulate and license online casinos. Since then, three states have passed laws to regulate casino sites:
- New Jersey
- West Virginia
There were high hopes that online gambling would spread faster than it has since the DOJ ruling in 2011, but things have moved a bit slower than expected. Delaware and New Jersey legalized online casinos in 2013 and then there was a good five-year stretch before Pennsylvania joined the fray. However, Pennsylvania’s relatively recent entrance into regulated online gaming has revived hopes that not all interest is lost.
One of the nice things about online casinos aside from their convenience is the fact that they tend to have considerably higher payout rates than their land-based counterparts. In addition to that, the casino sites that have launched so far in the United States have taken to offering welcome bonuses to new customers – something you rarely see in the real world.
Gambling sites are better equipped to offer higher payout games and welcome bonuses due to significantly lower overhead costs. A brick-and-mortar casino must pay for the building, upkeep, staff, dealers and so on. An online casino can host an infinite number of players at very little cost and save a lot of money in doing so.
Other than that, the casino games you find on the internet operate in the same basic manner as those found at any Vegas establishment. All the same rules, payouts and bets are in play just like you’d find at your favorite local casino.
History of Online Betting in the United States
Online sports betting and gambling have been available to US citizens since the early 90s and the industry as a whole has undergone four distinct phases between then and now.
The Early Years
During those early days back in the 90s, online gambling was completely unregulated. The Federal Wire Act made it illegal for operators to take sports wagers online, but law enforcement back then had other priorities. Online gaming sites simply headquartered their operations offshore and conducted business relatively unmolested.
The first online betting sites actually hit the market in the mid-90s. Sites such as Intertops (1996) and Planet Poker (1998) were some of the first market movers. They hosted the first real money games over the internet and saw some limited success.
Online casinos, sportsbooks and casinos flourished during those early years. The Wire Act remained an ongoing concern, and the occasional online bookie was arrested if he made the mistake of visiting the US, but business was good for the most part.
Throughout all this time, customers of gambling sites were never targeted for enforcement. Whenever the feds did take action, it was always against those who ran offshore gambling sites or those who processed payments on their behalf. The primary concern for individual players was always finding a place to play online that would actually pay winners.
In the early 2000s, Pacific Poker, Party Poker, PokerStars and Bookmaker and several other big names joined the gold rush. Ultimate Bet joined the market in 2003, followed by Full Tilt Poker in 2004. These sites all grew to become household names in the US and around the world.
From about 2002-2006, these sites enjoyed the “golden age” of online gambling around the world. It was during this time that the famous “Poker Boom” occurred after Chris Moneymaker won the 2003 World Series of Poker in Las Vegas after winning his seat through an online satellite tournament hosted by PokerStars.
Things took a dramatic turn when the Unlawful Internet Gambling Enforcement Act (UIGEA) was passed in 2006. The UIGEA still did not target individual players, but it had an immense effect on the industry by prohibiting banking institutions from processing financial transactions on behalf of offshore betting sites, poker sites and casinos.
Many of the biggest names that served the US market at the time opted to leave the US after they saw the government was serious about enforcing the UIGEA. PokerStars and Party Poker, two of the biggest poker sites at the time, both left the US market much to the chagrin of their loyal fan base here.
Some betting sites accepted the legal risk and stayed open to US customers. Sites such as Bovada, BetOnline and 5Dimes continued operations despite knowingly breaking US law. Some of those sites are open to this day but operate completely outside the bounds of US law and regulation.
Legalization of US Online Gambling
The next major development occurred in 2009 when state officials from New York and Illinois wrote a letter to the US Department of Justice asking for clarification on whether or not the Wire Act would prohibit their plans to authorize their state lotteries to sell tickets online.
The Department of Justice responded with an opinion in 2011 stating that it interprets the Wire Act as applying only to online betting. This opinion was a big deal because it didn’t just authorize online lotteries; it also gave states the go-ahead to legalize online casino games and poker.
Nevada, Delaware and New Jersey all quickly jumped on the opportunity and legalized online casino games, online poker or both in the wake of the decision. Pennsylvania has also joined the party with its own law to permit multiple forms of online gaming. Additional states are also considering similar laws of their own.
The biggest hurdle faced by states that legalize online gaming is liquidity. As the law stands now, states may only offer games to people within state borders. This is especially troublesome for poker sites which need a large player base in order to keep the games running and the rake flowing in.
The good news is states are allowed to set up compact agreements which allow them to share player pools if both states have legalized online gambling. For example, Nevada, Delaware and New Jersey have all formed agreements allowing any operator active in all three states to share tables across state lines. As additional states legalize online poker and form similar agreements, online poker will make a comeback in the USA.
Legalization of Sports Betting in the USA
Sports betting got its own break in 2018 when the Supreme Court issued a ruling that declared PASPA unconstitutional. That ruling came about after a long-running court case which pitted the NCAA and major pro sports leagues against New Jersey in the Garden State’s effort to legalize sports betting.
New Jersey kicked off the debate back in 2011 when voters approved a referendum to allow the state to legalize sports betting at authorized casinos, racetracks and betting sites. The NJ legislature then drafted and approved of a sports betting bill, which Governor Christie signed in 2012.
This prompted the NCAA and major professional sports leagues to sue New Jersey to stop the legislation from taking effect. The crux of the leagues’ argument was the New Jersey’s law was in violation of PASPA. New Jersey tried several approaches to authorize sports betting, but ultimately landed on arguing that PASPA itself was an unconstitutional law that trampled on states’ rights.
To make a long story short, the case eventually went all the way to the Supreme Court of the United States and New Jersey was handed a victory when PASPA was ruled unconstitutional.
New Jersey’s victory paved the way for states to legalize and regulate sports betting as they see fit. Numerous states have since taken the opportunity to legalize sports betting in the real world, online or both.
Online Gambling Laws in the United States
Online gambling has had a tumultuous history in the United States with players, operators and lawmakers all pushing and pulling the industry in a hundred different directions. Some government types seek outright prohibition while others seek absolute legalization.
To further confuse things, gaming laws vary from state to state. Federal gaming laws apply across the country (with exceptions of course) while state laws regulate gaming within each state. It all makes for a big, confusing mess. It’s not all bad, though. Today I’m going to break it down and explain our country’s gaming laws in a way that makes sense for everyday readers.
Unlawful Internet Gambling Enforcement Act (UIGEA)
A number of laws regulate gaming on the federal level, but the most significant of these is the Unlawful Internet Gambling Enforcement Act of 2006 (UIGEA). Certain members of Congress saw the size of the industry, noted the billions of dollars flowing overseas and decided to attempt a prohibition of online poker, sports betting and casino games.
Anti-gambling lawmakers knew they had no chance in passing any sort of legislation that would actually criminalize the act of playing online. So, they came up with the UIGEA to target the financial services industry and cut off the money supply to offshore gaming sites.
The UIGEA was immensely unpopular from its inception, but clever legal maneuvering allowed supporters to attach the UIGEA to a piece of unrelated “must pass” legislation called the SAFE Port Act dealing with port security. The UIGEA was added to the SAFE Port Act as a rider at 9:29 PM the day before Congress adjourned for the 2006 elections. Even worse, to vote against the UIGEA would have required a vote against safeguarding our nation’s ports.
The UIGEA was passed into law the following day and finally went into effect on January 19th, 2009. Even before the law took effect, it had an immediate impact on the industry in the United States. A number of big-name online betting sites immediately left the US market, stopped accepting players from the US and focused their efforts elsewhere.
Other operators decided that the risk was worth it and continued to operate in the US despite the increased legal risk. Those that stayed knew they played a dangerous game. They also faced increased difficulty in processing deposits and issuing payouts. Depositing became more complicated and average payout speeds slowed.
The UIGEA put a dent on illegal online gambling, but the practice continues to this day and remains a major industry. The failure of the UIGEA to stop illegal gambling has been used (successfully in some states) to justify legalizing, regulating and taxing online gambling and sports betting in the USA.
If it’s going to happen anyways, the argument goes, we might as well tax it and enact safeguards protecting consumers, problem gamblers and the integrity of sports.
What the UIGEA Did
There are many misconceptions about what the UIGEA actually says. Shoddy news reporting led many to believe online gambling was criminalized with the passage of the UIGEA. This is untrue.
What the UIGEA actually did was prohibit banks and other financial institutions from doing business with illegal, foreign gaming sites. Credit card processors were instructed to decline transactions to known gaming sites, banks were prohibited from processing bank transfers to gambling sites and e-wallets such as Neteller were told to comply or face the risk of prosecution.
Companies such as Neteller and Skrill were forced to leave the US market as they were considered “third party payment processors.” This severely limited the options regular people had for funding their gambling accounts.
However, the operators that chose to remain open to US customers found ways around the restrictions. They were able to process some deposits via credit cards, debit cards and direct bank transfers.
In the end, the only real effect the UIGEA had was to scare some companies out of the US market and make it slightly more difficult for players to make deposits. Online gambling remains a multibillion-dollar business in the United States to this day. Where there is a demand, people will always find a way to get their fix.
One unintended side effect of the UIGEA that has materialized more recently is increased difficulty for players to deposit at legal betting sites licensed right here in the United States. After New Jersey passed its online gaming laws, many customers reported declined credit card deposits.
Some progress has been made on that front, but even today some banks continue to block deposits to legal betting sites out of an abundance of caution. If you do have problems depositing at a licensed gaming site, customer support can usually help you find an alternative deposit method.
What the UIGEA Didn’t Do
The UIGEA did not criminalize the act of placing bets online. Even after the passage of the UIGEA, people continued to gamble online by the millions from within the United States. Not a single person ever faced federal prosecution for placing bets online.
Several noteworthy exemptions were included in the text of the UIGEA. Specifically, online horse racing betting, fantasy sports and games of skill were exempted from the provisions of the UIGEA. This is why horse racing sites such as BetAmerica and fantasy sports sites such as DraftKings may operate and advertise in the open today.
Federal Wire Act
The Federal Wire Act of 1961 was responsible for the lack of sports betting in the United States outside of Nevada for decades. In short, the Wire Act criminalized the transmission of or assistance in sports wagering by any form of “wire communication.”
The Federal Wire Act was for years interpreted to apply to all forms of online betting, which resulted in a federal policy that no form of online gambling or poker may ever be legalized.
This changed in 2011 when the US Department of Justice issued an opinion that the Federal Wire Act only applies to sports betting and not to other forms of wagering. This relaxed the grip of the feds and gave individual states the right to legalize online casino games and poker if they so choose.
Professional and Amateur Sports Protection Act
The Professional and Amateur Sports Protection Act (PASPA) became law in 1992 and effectively banned sports betting in every state except Nevada. Additionally, parlay-style sports betting games offered by the Delaware, Montana and Oregon lotteries were exempted from the law. However, as far as true, single-game sports wagering was concerned, Nevada had an absolute monopoly in the US.
New Jersey mounted a legal challenge to PASPA beginning in 2011 when voters there approved a law to legalize sports betting. This started a multi-year legal battle that eventually resulted in the Supreme Court striking down PASPA.
Now, individual states have the authority to legalize and regulate sports betting as they see fit.
State Gaming Laws
Every state in the US also has its own take on gambling. Some states completely outlaw all forms of gambling while others allow everything from online sports betting to online lotteries. The trend in recent years has been for individual states to expand what is legal online. Numerous states now have online betting, casino games, poker, lotteries and horse racing betting.
Nevada, New Jersey and Delaware were the first three states to pursue legalization after the afore-mentioned 2011 DOJ ruling. Nevada eventually legalized online poker while New Jersey and Delaware legalized online poker and casinos. In all three states, the state government is responsible for overseeing the industry and issuing licenses to operators. Pennsylvania, West Virginia and more states have likewise followed suit.
Legal US Betting Site Reviews
We actively rate and review all licensed and regulated betting sites that accept US customers. See our current list below, we are working to expand the list as more operators enter the space.
US Betting FAQ
Here’s a quick list of common questions and answers to all. If you’re new to online betting in the USA, this is a great place to get yourself up to date on the current situation.
Is it legal to bet online in the United States?
This is a tricky question because the answer varies from state to state and sometimes depends on one’s interpretation of the law. In the states that have legalized online gambling and sports betting, it is 100% legal to play as long as you’re of age and are physically located in that state.
Horse racing betting and fantasy sports are perfectly legal in many states as well. The whole situation is confusing, but normal customers have it pretty easy. As long as you don’t plan on opening your own online casino, sportsbook or poker site, you should be A-OK.
In other states without legal gaming sites, the answer varies. Some states do actually have laws that criminalize the act of betting online, but those laws are generally not enforced. Having said that, we strongly urge our readers to stick with licensed gaming sites. There are legal and financial risks associated with illegal online gambling no matter what some other websites may claim.
Are my funds safe when I gamble online?
Usually. If you play only at licensed US betting sites, your money is as safe as it would be anywhere else. The best betting sites have spent years building their reputations and offer fast payouts and fair play as an advantage over the competition. The key is to always stick with sites that are known, respected and experienced.
It is always riskier to do business with foreign companies because they operate from other countries and are difficult if not impossible to prosecute in US courts. Plus, they have no physical presence in the US so you have no choice but to trust that they will do the right thing. Again, our advice is to stick strictly with licensed gaming sites.
How can I tell if a US betting sites are safe?
First of all, you can take our recommendations to heart. We have spent years in the industry and know without a doubt which sites are safe and which are not. Furthermore, you would be surprised what a little old-fashioned Google research will yield when you search for the name of any site you’re considering.
It all comes down to reputation. Online betting sites live and die by their reputations. All you have to do is look at how any particular site has chosen to operate in the past. If you see legions of unhappy customers when you do your research, it should raise a red flag. No business will ever have 100% positive reviews on the internet, but you can tell something is wrong when the overwhelming majority of reviews are negative.
For the most part, state regulations keep gambling operators in check. In most states, licensed betting sites are owned and operated by brick-and-mortar casinos. It would be extremely surprising to see a licensed betting site put its operating license at risk just to steal money from a few customers.
How do I deposit at US gambling sites?
The UIGEA still causes problems for the industry and you may have problems depositing with your credit card even if you only play at legal sites in the US. If your credit or debit deposit is declined for no reason, it probably got caught up in your bank’s UIGEA net.
Even so, the credit card remains the most popular method for depositing in the United States. It’s simple, the process is familiar and deposits are processed instantly.
How do I withdraw?
A number of different methods are available for withdrawals. Legal USA betting sites can transfer funds straight to your bank account, send a check in the mail, credit your PayPal account and more.
As long as you stick with licensed online sportsbooks, you will have no trouble claiming your winnings when it’s time to cash out. Offshore betting sites that still serve the US contrary to federal law do not offer such benefits.
Are online betting winnings taxable in the USA?
Yes, just like they would be at a live casino or poker room. Players should file these wins under gambling winnings, which is all encompassing in IRS terms. This means that poker, casino and sports betting play can all be filed under gambling income with wins and losses offsetting each other.
That being said, you should check in with a tax professional when tax season comes around just to be sure. Tax is a complicated issue all on its own. Add gambling to the mix and it might be wise to talk to a professional.
Are bonuses offered to US based players?
Most US betting sites offer players a deposit bonus on their first deposit after signing up. These may range from small amounts such as $50 or $100 and can be as large as several thousand dollars.
Bonuses almost always have wagering requirements, also called the rollover, that must be met before withdrawing. The rollover is the amount of times you are required to wager your bonus before the money is cleared for withdrawal.
For example, let’s say you deposit $200 to a legal online casino in New Jersey and get a $200 bonus to go with that. The bonus terms might state that you need to “wager the deposit + bonus amount 20 times before initiating a withdrawal.” In that case, you would have to place a total sum of wagers totaling $8,000 ($400 x 20)
Bonus offers and wagering requirements vary wildly from site to site, so make sure to always give the terms and conditions a quick read before depositing. Reload bonuses are promotions similar to deposit bonuses but are available periodically for all players. Just like deposit bonuses, they have a rollover attached.