In the United States, gambling is regulated by the federal and individual state governments. Although state laws regarding gambling vary from state to state, federal laws prohibit certain forms of gambling in every state.
When the Federal government prohibits certain forms of gambling, the states must abide by the federal laws, as the federal government’s regulations are superior and trump state laws. However, as of today, many states have some forms of legal gambling.
Although the exact legal definition for gambling differs by state, typically, a person engages in the act of gambling if they risk something of value upon the outcome of a game of chance or an understanding that they will receive something of value in the event a specified outcome occurs.
It is important to note that gambling excludes business transactions based on the law of contracts, such as the purchase of stocks, securities, life insurance, or the purchase of health or accident insurance. Such contracts are not considered to be gambling.
Legal gambling is defined by a state’s statutes (i.e., written laws), and what is considered legal gambling will be specifically referenced in those statutes. For example, in Nevada, many forms of gambling are considered legal through specific mention of the act in the state’s statutes. However, other states may consider the same form of gambling legal in Nevada to be illegal in their state. The state lottery system is one of the most common forms of legal gambling in the United States.
Outside of specifically referencing what activity is considered legal gambling, states also typically put an age restriction on persons allowed to participate in the act of gambling. In most states, it is illegal for minors to gamble or play games of chance, including betting on sports, participating in card games, or utilizing gambling machines.
Most states require that an individual be at least over the age of majority to participate in the act of gambling. In some states, the gambling age is 21 or over, while other states only require that an individual is over 18 to participate in gambling.
What Is Illegal Gambling?
As mentioned above, there are both Federal and state laws that govern what is considered legal gambling. Included within those laws and regulations are references to forms of gambling that are considered to be illegal. Federal law defines illegal gambling as any gambling that:
- Is conducted in violation of the law of a State;
- Involves five or more persons who conduct, finance, manage, supervise, direct, or own all or part of such business; and
- Has been in continuous operation for more than thirty days or has a gross revenue of $2,000 or more in any one day.
As mentioned above, federal law reaches into nearly every form of gambling and influences nearly every aspect of gambling laws. Additionally, Federal laws have been designed to cover forms of gambling laws that states cannot fully regulate. Examples of areas of gambling that are regulated by Federal law include:
- The transportation and possession of gambling devices or gambling paraphernalia across state lines;
- Gambling that involves betting on sports in states other than the state in which the sport is actually occurring;
- How and where certain bets may be made; and/or
- Internet gambling, such as online casinos or fantasy sports.
Once again, states are permitted to create their own regulations and prohibitions on which forms of gambling are considered legal in their state. However, the state laws must abide by Federal regulations. This means that, as long as the state laws do not conflict with Federal gambling laws, they can create their own laws governing gambling within their state.
What Was the Professional and Amateur Sports Protection Act of 1992?
The Professional and Amateur Sports Protection Act of 1992 was a federal statute. It prohibited any state or person acting according to the law of a state government agency from sponsoring, operating, promoting, or authorizing any gambling scheme based on games played by amateur or professional athletes in the state.
What Kinds of Sports Did the Professional and Amateur Sports Protection Act Relate to?
The Professional and Amateur Sports Protection Act prohibited gambling on any professional and amateur sports, including:
- Amateur sports;
- Professional sports, such as the NFL, NBA, or NHL;
- College sports, such as the NCAA; and
- The Olympics.
Certain sports were carved out from the Act that the Act did not prohibit, including:
- Pari-mutuel betting, including horse and dog races; and
- Jai-Alai, a popular sport in Latin American countries.
Were All Forms of Sports Betting Illegal?
For the most part, yes. When the Professional and Amateur Sports Protection Act was in effect, it applied to every state in the country. This means that even states that previously held legal lotteries based on professional and amateur sports were prohibited by the Act from holding further gambling on the outcomes of sports games.
Nevada was the only place where someone could legally place bets and gamble on professional and amateur sports.
Why Was the Professional and Amateur Sports Protection Act of 1992 Overturned?
As mentioned above, PAPSA was created with the intent to regulate sports betting nationwide by outlawing sports betting in all but a few states. When the Act was first passed, the Act provided a one-year window of opportunity for states which operated licensed casino gaming for the previous ten-year period to pass laws permitting sports wagering. However, New Jersey failed to take advantage of the one-year window to pass laws permitting sports wagering resulting in sports betting being essentially outlawed in the state.
Because New Jersey failed to pass laws permitting sports wagering within the allotted period, they became a leader in challenging the legality of the Act. Specifically, New Jersey asserted that the law as written was inherently unconstitutional, as the Tenth Amendment of the United States Constitution reserves to the states all rights not explicitly granted to the federal government. One of the rights not explicitly granted to the federal government is gambling regulation.
After many challenges to PAPSA, New Jersey appealed a case to the United States Supreme Court, requesting the examination of PASPA under the Tenth Amendment. In 2018 the Supreme Court of the United States agreed with New Jersey’s argument. It ruled that PASPA conflicts with the Tenth Amendment in the Supreme Court Case Murphy v. National Collegiate Athletic Association.
After the Supreme Court struck down the PAPSA as a whole as being unconstitutional in May of 2018, ruling that parts of PASPA were unconstitutional as the parts commandeered power from the states, many states began legalizing sports betting. Now, legalized sports betting is regulated by the states. However, it is important to note that the Supreme Court decision only impacted intrastate sports gambling schemes, as interstate sports gambling remains illegal under the Federal Wire Act.
Do I Need a Lawyer for Help With the Professional and Amateur Sports Protection Act?
If you have questions about the Professional and Amateur Sports Protection Act, you may wish to consult with an experienced entertainment lawyer knowledgeable in gaming law. An experienced entertainment lawyer will be able to explain the overturned Act and how it impacted your state’s current laws.
Further, as mentioned above, gambling laws vary drastically by state. As such, if you have been charged with a crime related to the act of gambling, it is in your best interest to immediately consult with an experienced criminal defense attorney.
An experienced criminal defense attorney will be aware of both the Federal and state laws regarding gambling. Finally, an attorney will be able to determine whether or not any legal defense is available to you and be able to represent you in court as necessary.
