By David Manjorin
Brief History of Sports Betting in the United States
The legal landscape for gambling on sports in the United States has enjoyed a history full of ebbs and flows. Between a lack of regulation[1], to widespread prohibition throughout most states in the Twentieth Century[2], to the proliferation of casinos following the enactment of the Indian Gaming Regulatory Act in 1988[3], and finally to the growth of internet gambling in the Twenty-First Century.[4]
Sports betting grew as part of a jurisdiction-by-jurisdiction legal regime[5] until 1989. It was then that Major League Baseball Commissioner A. Bartlett Giamatti released a report that legendary player, Pete Rose, gambled on baseball games as a player and later as manager of the Cincinnati Reds.[6] For his transgressions, Major League Baseball banned Pete Rose for life, preventing the league’s all-time hits leader from joining MLB Hall of Fame.[7]
Following the Pete Rose scandal, National Football League and National Basketball Association Commissioners Paul Tagliabue and David Stern both came out in favor of sports betting prohibitions, stating that the practice threatened the integrity of professional sports.[8] In response, Congress passed the Professional and Amateur Sports Protection Act of 1992 (PASPA), making it unlawful for states to operate sports betting schemes.[9] The law did, however, exempt Oregon, Delaware, and Montana in addition to certain sport pools in Nevada, which had sports betting operations in place prior to passage.[10] Additionally, states with at least ten years of licensed casino gaming could pass laws to permit sports betting, if done within a year of the law’s passage.[11] New Jersey famously failed to take advantage of this provision, lost its chance to operate legal sports betting pools under the statute, which led to the state’s eventual challenge of the law.[12]
After unsuccessfully petitioning the Supreme Court to hear a constitutional challenge of PASPA in 2012, New Jersey successfully brought a case to the Court in 2014 (Murphy v. NCAA).[13] New Jersey’s argument was that PASPA was unconstitutional “because it regulates a state’s exercise of its lawmaking power by prohibiting it from modifying or repealing its laws prohibiting sports gambling.”[14] The Court agreed, noting that “PASPA’s provision prohibiting state authorization of sports gambling schemes violates the anticommandeering rule,” because it “unequivocally dictates what a state legislature may and may not do.”[15] PASPA, according to the Court, violated the Tenth Amendment, which states that “all legislative power not conferred on Congress by the Constitution is reserved for the States,” and no power enumerated in the Constitution gives Congress the right to issue direct orders to state governments.[16]
With the Murphy decision, the power to legalize or criminalize sports betting returned to the states. And since that decision, many states have decided to permit sports betting, creating a multibillion dollar industry in a few short years.[17]
While betting on esports is a relatively new phenomenon, it is projected to rack up $2.5 billion in worldwide revenue in 2024.[18] Gambling companies continue to examine how to maximize esports betting’s potential[19], and the legal landscape continues to develop, often less clearly than for traditional sports betting.
Legal Landscape of Esports Betting Today
Throughout the United States, there are essentially three legal statuses for esports betting: 1) the state has a sports betting statute legalizing sports betting and it includes esports explicitly in its definition of a legal sports bet; 2) the state has a sports betting statute, but it does not include nor exclude esports betting as a permissible sports bet; or 3) the state explicitly disallows sports betting and/or esports betting or has not authorized it. While the first and third statuses are clear, the second status makes it unclear whether esports betting is permitted in those states. The following chart details each state’s status:
| State | Legal | Illegal | Unclear |
| Alabama | X | ||
| Alaska | X | ||
| Arizona[20] | X | ||
| Arkansas[21] | X | ||
| California | X | ||
| Colorado[22] | X | ||
| Connecticut[23] | X | ||
| Delaware | X | ||
| District of Columbia[24] | X | ||
| Florida[25] | X | ||
| Georgia | X | ||
| Hawaii | X | ||
| Idaho | X | ||
| Illinois[26] | X | ||
| Indiana | X | ||
| Iowa[27] | X | ||
| Kansas[28] | X | ||
| Kentucky[29] | X | ||
| Louisiana[30] | X | ||
| Maine[31] | X | ||
| Maryland[32] | X | ||
| Massachusetts[33] | X | ||
| Michigan[34] | X | ||
| Minnesota | X | ||
| Mississippi | X | ||
| Missouri | X | ||
| Montana[35] | X | ||
| Nebraska[36] | X | ||
| Nevada[37] | X | ||
| New Hampshire[38] | X | ||
| New Jersey[39] | X | ||
| New Mexico | X | ||
| New York[40] | X | ||
| North Carolina[41] | X | ||
| North Dakota | X | ||
| Ohio[42] | X | ||
| Oklahoma | X | ||
| Oregon | X | ||
| Pennsylvania[43] | X | ||
| Rhode Island[44] | X | ||
| South Carolina | X | ||
| South Dakota | X | ||
| Tennessee[45] | X | ||
| Texas | X | ||
| Utah | X | ||
| Vermont[46] | X | ||
| Virginia[47] | X | ||
| Washington | X | ||
| West Virginia[48] | X | ||
| Wisconsin | X | ||
| Wyoming[49] | X |
How Esports Betting Works
Esports betting shares many similarities with traditional sports betting, but given the format of the competition and the different types of games available, there are bets unique to video games. The most popular games for esports betting include Counter-Strike 2, DOTA 2, League of Legends, Call of Duty, Rocket League, Rainbow Six Siege, Overwatch 2, and Valorant, among several others.
Traditional sports betting includes betting methods such as straight betting, parlays, futures, and proposition bets. In a straight bet, the bettor wagers on the outcome of a game or event such as picking a certain team to win a game.[50] Parlays are single bets that combine the outcomes of multiple selections, for example, a single bet that both the Giants and Eagles will win their respective games.[51] Futures take a step back and allow bettors to wager on whether a specific team or person will win an event in the future, for example, a preseason bet that the Giants will win the Superbowl (wishful thinking on my part).[52] And proposition bets, or prop bets, are bets that are not necessarily contingent on the outcome of the game or event, but can be a more narrow selection, for example, betting on how many yards passing Daniel Jones will have in a game for the Giants.[53]
Esports betting ties to these general sports betting concepts but adds twists unique to video games. Esports include straight bets where you can wager on the outcome of a match or event.[54] There are also futures such as betting on which gamer (or game team) will win a specific match.[55] There are prop bets where you can bet on which gamer will have the first kill in a game like DOTA 2,[56] or over/under bets where you can try to predict whether the total points scored will be above or below a set amount.[57]
To understand how a payout would work in a sports or esports bet, the following is an example bet, using betting odds provided by Thunderpick, an internationally-based esports betting site. There is an upcoming DOTA 2 match in the DreamLeague between AVULUS (+650) and PariVision (-122). The minus sign represents that the PariVision are favorites to win while the plus sign indicates that the AVULUS are the underdogs. Positive odds indicate a bettor’s potential profit on a $100 bet, while negative odds represent the bet necessary to win $100.[58] In this case, if you bet $100 on the AVULUS and they win, the payout will be $750 (the betting stake of $100 plus a $650 profit). The same $100 bet on the PariVision, assuming they won instead, would yield a payout of $181.97 (the betting stake of $100 plus an $81.97 profit). Knowing how the odds work is important in determining the likelihood of success of your bet and how much you are willing to wager.
Where and How Does One Wager
While esports betting is legal in many states, the most popular legal sportsbooks in the United States have not yet added many options for esports bets. For example, DraftKings offers only daily fantasy sports (“DFS”) options when it comes to esports, and DFS is not considered to be gambling in most states.[59] Instead, most esports betting is done via internationally-based betting sites.
Examples of popular esports betting websites include Thunderpick, BetOnline, BetUS, Bovada, Pinnacle, and Betway. Generally, these websites allow you to deposit funds via a credit/debit card, wire transfer, and increasingly through cryptocurrency. Some websites, like Thunderpick, deal exclusively in cryptocurrency.
Future Outlook
Like sports betting, esports betting continues to see market growth with the United States projected to hit north of $700 million in revenue in 2024.[60] The worldwide market volume is expected to reach $3.5 billion by 2029.[61] This growth is fueled by online tournaments, events, mobile gaming, and accessibility to sports betting.[62] Additionally, consumers are increasingly using cryptocurrency to make these esports wagers, primarily on international websites, due to both the convenience digital currency offers and the anonymity it provides.[63]
The legal landscape continues to develop in the United States. While many states have legalized esports betting, others are still trying to get legislation passed or clear up their sports betting laws to explicitly include esports. For example, Pennsylvania lawmakers continue to propose specifically legalizing esports betting, while New Jersey and Nevada are working towards solutions to make betting on esports more accessible.[64] The continued growth and success of esports betting is contingent on sustained legalization efforts in states that have not yet legalized esports betting, improvements in access to wagering on more familiar sports betting sites like FanDuel, Caesar’s, and DraftKings, and increased betting options in brick and mortar casinos.
[1] See Thomas Barker and Marjie T. Britz, Jokers Wild: Legalized Gambling in the Twenty-First Century 19–26 (2000).
[2] Id. at 31–35, 45–48.
[3] Murphy v. NCAA, 584 U.S. 453, 459 (2018).
[4] Barker and Britz, supra note 1, at 52, 57, 59, 100.
[5] See James C.W. Goodall, Bringing Down the House: An Examination of the Law and Policy Underpinning the Professional and Amateur Sports Protection Act of 1992, 67 Rutgers U.L. Rev. 1097, 1104 (2015).
[6] See David Purdum, Sports Betting Legalization: How We Got Here, ESPN (May 22, 2018), https://www.espn.com/chalk/story/_/id/23561576/chalk-line-how-got-legalized-sports-betting.
[7] See Goodall, supra note 5, at 1102.
[8] See id. at 1103; Paul David Walley, Officially Gambling: Tim Donaghy and the NBA’s Need for an Absolute Ban on Referee Gambling, 21 Gaming Law Review and Economics 1, 36 (2017).
[9] Professional Sports and Amateur Sports Protection Act (PASPA), 28 U.S.C. §3702 (1992).
[10] See Goodall, supra note 5, at 1108.
[11] Id.
[12] Stephen A. Miller and Leigh Ann Benson, NJ’s Supreme Court Gamble Takes on PASPA, The Legal Intelligencer (Nov. 9, 2017), https://www.law.com/thelegalintelligencer/2017/11/09/njs-supreme-court-gamble-garden-state-takes-on-paspa/?slreturn=20241018170129.
[13] Id.
[14] Murphy, 584 U.S. at 463.
[15] Id. at 455.
[16] Id.
[17] Doug Greenberg, Sports Betting Industry Posts Record $11B in 2023 Revenue, ESPN (Feb. 20, 2024), https://www.espn.com/espn/betting/story/_/id/39563784/sports-betting-industry-posts-record-11b-2023-revenue.
[18] Esports Betting – Worldwide, Statista (2024), https://www.statista.com/outlook/amo/esports/esports-betting/worldwide.
[19] Wayne Perry, Esports Video Games Hold Vast Betting Potential, Experts Say, AP (Oct. 18, 2022), https://apnews.com/article/technology-sports-games-video-esports-6561ed220e00ca3b9a01bae73cc1c0e0.
[20] Ariz. Rev. Stat. § 5-1301 (2024).
[21] 006.06.21 Ark. Code R. § 013 – Casino Gaming Rule 20 (2024).
[22] Colo. Rev. Stat. § 44-30-1501 (2024).
[23] Conn. Gen. Stat. § 12-850-871 (2024).
[24] D.C. Code § 36-621.01-17 (2024).
[25] Florida Gaming Commission.
[27] Iowa Admin. Code r. 491-13.1-13.7 (2024).
[28] Kan. Stat. Ann. § 74-8702 (2024).
[29] Ky. Rev. Stat. § 230.085-230.826 (2024).
[30] La. Stat. Ann. § 27:602 (2024).
[31] Me. Stat. tit. 8, Ch. 35 (2024).
[32] Md. Code Ann. State Gov’t § 9-1E01 (2024).
[33] Mass Ann. Laws ch. 23N § 3 (West 2024).
[34] 2019 Mich. Adv. Legis. Serv. 149.
[35] Mont. Code Ann. § 23-7-103 (2024).
[36] Neb. Rev. Stat. § 9-1103 (2024).
[37] Nev. Rev. Stat. § 463.830 (2024).
[38] N.H. Rev. Stat. Ann. § 287–1:1 (2024).
[39] N.J. Stat. Ann. § 5:12A-10 (2024).
[40] N.Y. Rac. Pari-Mut. Wag. & Breed. Law § 1367 (2024).
[41] N.C. Gen. Stat. § 18C-901 (2024).
[42] Ohio Rev. Code Ann. § 3775.01 (West 2024).
[43] 4 Pa. Stat. and Cons. Ann. § 13C01 (West 2024).
[44] 42 R.I. Gen. Laws § 42-61.2-1 (2024).
[45] Tenn. Code Ann. § 4-49-102 (2024).
[46] Vt. Stat. Ann. 31, § 1340 (2024).
[47] Va. Code Ann. § 58.1-4030 (2024).
[48] W. Va. Code § 29-22D-3 (2024).
[49] Wyo. Stat. Ann. § 9-24-101 (2024).
[50] Hard Rock Bet: Sportsbook Betting Guide, https://www.hardrock.bet/sportsbook/football/.
[51] See id.
[52] See id.
[53] See id.
[54] Staff, The Rise of Esports Betting: How it Differs from Traditional Sports Betting and Ways to Get Started, New Jersey Digest (Apr. 24, 2024), https://thedigestonline.com/news/the-rise-of-esports-betting-how-it-differs-from-traditional-sports-betting-and-ways-to-get-started/.
[55] See id.
[56] THP, How to Bet on Esports, Thunderpick (Oct. 4, 2024), https://thunderpick.io/blog/how-to-bet-on-esports.
[57] Staff, supra note 54.
[58] THP, supra note 56.
[59] https://www.draftkings.com/esports.
[60] Esports Betting – Worldwide, Statista (2024), https://www.statista.com/outlook/amo/esports/esports-betting/worldwide.
[61] Id.
[62] Id.
[63] Id.
[64] George Stockburger, Pennsylvania Lawmaker Proposes Legalizing Esports Betting, ABC (Feb. 2, 2023), https://www.abc27.com/pennsylvania-politics/pennsylvania-lawmaker-proposes-legalizing-esports-betting/.
