How To End Illegal Sports Betting In The United States

Sports betting in the United States has undergone a dramatic transformation since the Supreme Court overturned PASPA in May 2018. What was once limited to Nevada is now legal and regulated in more than 38 states, generating over a hundred billion dollars for the annual handle. Yet illegal betting persists with underground bookmakers still thriving and the question of how to fully bring legal sports betting into the legal fold remains unresolved.

Safest Legal Sports Betting Sites

Let The States Decide Whether Or Not To Legalize Sports Betting

No state spent as much time trying to figure out how to end illegal sports betting than New Jersey. The state most recently took two different approaches to get legalized sports betting up and running within its borders. The first attempt was a voter referendum that approved legalized sports gambling by an overwhelming margin. After the court sided with the sports leagues that filed lawsuits against this, New Jersey sports betting took off, repealing their laws that expressly prohibited sports betting. Again, the court ruled that NJ was in violation of PASPA. However, the state took its case all the way to the Supreme Court, citing the Tenth Amendment to the US Constitution, which reads:

“The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people.”

Determining how to end illegal sports betting begins with giving states the power to choose what best fits the interests of their people and their economy. This is currently what is happening, thanks to the overturn of PASPA. However, this is not stopping the federal government from attempting to take back its lost power, as various congresspersons have been filing bill frameworks to give the feds the last say on all individual state sports legislation. This would be a major step backward, but hopefully, enough states take the initiative to legalize their own sports wagering industries that the federal government can be overruled by a majority of representatives on this one.

Protect The Integrity Of The Games

One reason for PASPA was to protect integrity from match fixing and point shaving. College athletes are vulnerable to point shaving but the risks outweigh the benefits. Officials, who aren’t paid as well as the athletes in their given sports, can also cause issues. The NBA’s Tim Donaghy scandal proved this and blown calls in the NFL paint an even more suspicious picture. However, corruption on the officiating side in America’s big five sports (NFL, NCAAF, MLB, NBA, NHL) is very rare. Though there is no way to 100% eliminate corruption in sports. There are more ways to monitor illicit activities in legal sports betting markets. State licensed sportsbooks make it easier to install a warning system for corruption.

Some notable sports betting scandals include:

• Brad Bohannon – Former University of Alabama baseball coach who placed illegal bets through a Cincinnati proxy 
• Iowa + Iowa State – Multiple student athletes caught in the action of betting on player props and other wagers
• Notre Dame Swimming – Team created their own sportsbook and would take bets on certain action
• Felix Zwayer – UEFA appointed Zwayer as a Euro 2024 semi-final referee despite being caught for match fixing
• Shoehi Ohtani’s Interpreter – After investigating Ohtani, it was discovered his interpreter stole millions for sports betting
• David Fletcher – Investigated for placing bets with the same bookie that put Ohtani in the headlines
• Jontay Porter – NBA investigation that later released he was texting during halftime about his ability to play
• Max Alves – Was paid $12,000 to receive a yellow card from a bookie and was suspended
• South African Soccer – Four teams found to be throwing games, including the Mighty Birds who scored 41 own goals in one game.
• Evander Kane – Despite pleas from Kane’s wife, the NHL found no involvement in gambling after an investigation

Transparency In The Sports Betting Industry

With the mix of local sports betting, legal online sportsbooks, and illegal bookmakers, there is a definite lack of transparency in the market. To end illegal sports betting, each state with sports betting will need to be regulated with clearly defined goals and laws. There will need to be mandatory auditing and reports that will pick up any unusual line movements. Each state should have its own licensing requirements and application processes for operators wishing to enter the market. Geolocation and other verification systems should be in place to prevent underage sports gambling and violations of things like the Federal Wire Act. Various consumer protections, such as the separation of operational and player funds, should be in place. Problem gambling is an important issue to address, which is why there are always an abundance of responsible gaming resources and treatment programs available in any regulated sports betting environment. Transparency is key in all aspects of sports betting regulations, and this – along with the above considerations – should be all that’s needed to ensure world-class sports wagering in any state that wishes to open up the industry to the public.

The Wire Act Affects How To End Illegal Sports Betting In The United States

The Wire Act remains a point of legal tension in the online betting space. The DOJ reversed its 2011 interpretation in 2019, arguing the Act applies to all online gambling, not just sports betting. But, courts again pushed back on that reading. As of 2026, the Wire Act’s scope remains unsettled in key jurisdictions, affecting how interstate online wagering and offshore books are treated under federal law

Ending Illegal Sports Betting FAQs

Does The U.S. Government Have The Power To Stop Online Offshore Sportsbooks?

The short answer is no. The US federal government can not stop the operations of sportsbooks that are located overseas, even if those sites accept American bettors. Currently, most federal laws that are against offshore sports betting seem to be around the area of making and receiving payments. The UIGEA makes it illegal for US financial institutions to knowingly accept payments from sportsbooks deemed illegal and that has simply limited the number of withdrawal options for US bettors to choose from. However, safe offshore sportsbooks have been able to mitigate this law.

Will An Increase In Legal Sports Betting Threaten The Integrity Of Games?

This is a common misconception that many people have over the legalization of sports betting. The fact is that the ability for match-fixing and corruption was already there long before any regulation, licensing, or legalization has occurred. The perfect example of that is the Tim Donaghy – an NBA referee that pleaded guilty to betting on games he officiated. If anything, being able to see the industry as a whole opens more light into how money is moving.

Can States Ever Enact Laws To Permanently Ban All Sports Betting?

It is very improbable that this would ever happen. When the PASPA was abolished, there was no longer a federal ban on sports betting, which gave states the option to regulate sports betting if they should approve it. There is really no reason for a state to make it impossible for future legislators to make laws that would regulate sports betting. States like Hawaii, and Utah who have no legal gambling including lotteries, casinos, horse betting, charitable gaming or even bingo in their state, would still not create a law that would outright block any future legislation from happening.

How is legalization affecting the illegal sports betting market?

The American Gaming Association has historically estimated the US illegal sports betting market at $150 billion or more annually. With legal markets now operating in most states, a meaningful share of that handle has shifted to regulated books.

Can States With Legal Sports Betting Markets Still Use Legal Offshore Sportsbooks?

Yes, offshore sportsbooks are legal no matter what the status of sports betting is in the state where a sports bettor resides. Gamblers can legally be members of both state-sanctioned sports betting platforms as well as offshore internet sportsbooks simultaneously. There are no repercussions for engaging in both types of outlets for gambling on sporting events.