The History of Sports Betting in America

The History of Sports Betting in America

Betting on sports has been an activity that fans have done as long as human competition has been alive. You can’t stop people who love a sport from placing some kind of wager on the outcome. This can take place as a friendly wager, all the way to a serious form of income. Part of the experience of enjoying the competition that organized sports bring is in trying to predict the outcome of an event. Making your best bet and actually winning is a thrill that millions of people enjoy when it comes to sports betting. When friends get together who enjoy a sporting event, it’s natural to pit these predictions against each other.

The problem is that sports betting is much more than a friendly game of wagers. In fact, in 2021 the sports betting market in the United States alone was estimated to have a value of over four billion dollars. When this volume of money begins to be associated with any kind of market, the government is going to take notice. This is why it’s not uncommon for people to not know if sports betting is legal or not. 

While there are never going to be sanctions against wagers between friends, when the scope of sports betting starts to bridge into more professional level wagers, state governments start to get concerned. For most of the history of sports betting in the United States, the definition of whether it was legal or illegal was undefined and gray at best. Historically organized crime like the ‘mob’ has always had a very real presence in this industry. Because of the lack of definition, this created a lot of gray space for an underground economy to grow. 

The PASPA Act of 1992

One of the biggest moments in the history of sports betting in the United States was the PASPA act of 1992. PASPA, standing for, the Professional and Amateur Sports Protection Act, made it clear that sports betting was illegal in all but a handful of states. This federal act made it illegal for any person or organization to conduct sports betting throughout the entire country, with exception of a few states, Nevada being the largest. This federal-level ban did a lot to discourage sports betting around the country, however like most prohibitions on the federal level, it only encouraged the act to go ‘underground’. 

The Push Back From New Jersey 

In an attempt to stop sports betting by making it illegal, this act actually just pushed the industry of sports betting further from government control as it continued to grow. This act stayed in effect and largely unchallenged until 2011 when the governor of New Jersey, Chris Christie attempted to overrule it and legalize sports betting in the state of New Jersey. 

This of course did not go over well. The major sports organizations of the United States actually sued the state of New Jersey over this 2011 decision stating that it violated the national prohibition. The major sports organizations like the NFL, MBA, and others won their lawsuit against New Jersey’s movement to legalize sports betting in 2011 and sports betting remained illegal in New Jersey. 

This remained the case until 2014 when the governor, Chris Christie, yet again challenged the PASPA legislation of 1992 with another bill. This one moved to legalize sports betting in the state of New Jersey at specific locations only. This was viewed as a loophole, that allowed sports betting at locations, and didn’t challenge the PASPA legislation. 

This bill also challenged the federal government, by stating that if the bill couldn’t stand, the government was violating the state’s right to govern itself. Yet again, the major sports groups of the United States sued the state of New Jersey, but this time it went all the way to the supreme court.

The End of PASP 

In 2018, this case reached the federal supreme court that not only ruled in favor of New Jersey but actually struck down PASPA as unconstitutional. This happened for a lot of reasons, one of them being the softened attitude that the country was taking toward gambling in general. Over the last two decades, state governments that were legalizing forms of gambling were realizing how much revenue they could make off it. 

In the world of sports betting, when it was illegal, the money that people spent went to offshore accounts, and money actively was leaving the United States. With the removal of PASPA, the industry of sports betting is able to actually stay in the United States and benefit the states that legalize it. 


Thanks to the lifting of the federal ban, most states in the country have introduced or passed legislation that has legalized sports betting. This allows for the United States sports betting industry to actually benefit the United States and makes this pass time something legal that people can openly be involved in.