Betting on Fantasy Sports: Is it Legal in the USA?

Since the United States Supreme Court delivered a landmark decision to strike down the federal ban on sports gambling that prohibited betting on sports in most states. Since that ruling, which left the legality of sports gambling up to state-level government, several states swiftly moved to legalize sports betting.

Contrary to what some believe, betting real money online on fantasy sports IS legal in most of the USA. Betting real money on the outcome of a game (on sportsbook sites like BetOnline, Bovada, for example), however, has a more cloudy legal standing.

The thing that distinguishes the two is the Unlawful Internet Gaming Enforcement Act (UIGEA) of 2006. The UIGEA (which doesn’t actually outlaw gambling, but rather prohibits companies like non-USA-based online sportsbooks from accepting payments from customers for the purposes of betting), makes an exception for fantasy sports or other games in which the customer’s understanding of stats, data, or other information has a large influence on the outcome of the event.

If you have to read that paragraph again, we don’t blame you: The fact is, the law believes there is a fundamental difference between the level of skill required to be successful betting online at a sportsbook and that which is required to win in online fantasy sports contests.  Many people (likely a majority of them, in fact) would disagree and say that winning at both online betting at a sportsbook like BetOnline or Bovada AND in online fantasy contests like those at DraftKings or FanDuel require a significant amount of skill, and that neither should be considered strictly “gambling”.

This argument was tested in Humphrey vs. Viacom, Inc, a 2007 New Jersey District Court case, in which the court decided fantasy sports contests are games of skill and therefore exempt from anti-gambling laws.

Betting real money on fantasy sports contests is now available in every US state except Washington, Idaho, Montana, Nevada, Arizona, Iowa, Louisiana, and Alabama.

Here is the current status of sports betting state by state:

 

State

Legal Sports Betting?

Legal Online Sports Betting?

planned legislative activity?