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According to many gambling insiders legalised land and online sports betting will be a reality across the United States sooner rather than later. As proof of this, some recent ‘mega deals’ may bode well for the future of online sports betting in the US.
Kambi Group and Penn National Gaming Sign Sports Betting Deal
Kambi, a Malta-based provider of premium sports betting and technology services, signed an exclusive deal with Penn National Gaming, a leader in the American gaming and racing industries which operates 42 facilities in 19 jurisdictions.
This is a mega deal, make no mistake. This would not happen if regulation was going country wide.
As part of the gambling mega deal i.e. the exclusive multi-state sportsbook agreement, Penn National will access Kambi’s flexible and empowering technology, allowing it to develop a ‘proprietary front-end and differentiated sports betting experience.’
This is a multi-channel deal that has the potential to make the leap from land-based sports betting to online sportsbooks. It came about as a direct result of the end of the federal sports betting ban (more on that below).
But to understand why the most successful online gambling firms i.e. the big boys are making big moves, it’s important to understand a little about the current state of sports betting (land-based and online) in the USA.
The End of a Federal Sports Betting Ban
In May 2018 the United States Supreme Court (in Murphy vs. National Collegiate Athletic Association) struck down the long-standing federal ban on sports betting, opening the way for a new era in American sports betting for operators and bettors alike.
With the federal ban lifted, individual US states are finally free to decide at their own discretion whether to legalise and regulate sports betting within their borders.
As a result 10 states have to-date legalised and regulated land-based sports betting industries. They are Arkansas, Delaware, Mississippi, Nevada, New Jersey, New York, Pennsylvania, Rhode Island and West Virginia. (In New Mexico some tribes offer sports betting under an existing Class III gaming compact).
It should be noted that only citizens of these states are allowed to place bets at the respective sportsbooks sanctioned and /or licenced within their state, since placing bets on sports in other states other than their own is still largely prohibited. Similarly, betting in these states from outside the state / country isn’t allowed.
These 8 US States are Poised to Legalise Sports Betting this Year
Over and above these states, 8 others are poised to legalise and regulate sports betting in 2019. They are Illinois, Indiana, Iowa, Montana, New Hampshire, North Carolina, Oregon and Tennessee. (Maine is expected to legalise sports betting in 2020).
But what about online sports betting? Surely if land-based sportsbooks can be licensed and regulated, online or virtual sportsbooks shouldn’t be far behind. Unfortunately online sportsbooks – like online gambling in general – are a contentious issue in the US.
While legalised land-based sports betting seems to be gaining a foothold in a growing number of states, online sportsbooks are still ‘out in the cold,’ at least ones that are legalised and regulated in the USA. But that’s where the Kambi Penn deal comes in.
Online Betting in the United States
Although there are no US federal laws that prohibit betting on sports, there are laws in place that make owning, operating or hosting an online sportsbook in the USA a crime.
That said the US Department of Justice (DOJ) doesn’t consider offshore owned betting sites to be any more legal or acceptable just because they fall outside of American borders, laws and jurisdictions, but they are accessible to US players.
Many offshore online betting sites are licensed and regulated in jurisdictions such as Antigua and Barbuda, Kahnawake (Canada) and Costa Rica where the United States has no authority and where internet-based sports betting is 100% legal.
The good news is Americans who choose to bet at offshore sites can do so relatively easily. That is provided they can fund their betting accounts with payment methods other than US-issued credit cards or bank account transfers since these have a high likelihood of being flagged by the respective banks and/or financial institutions.
Safer and largely undetectable banking options include cash-based methods such as Western Union and MoneyGram. Electronic wallets (e-wallets) like Neteller, Skrill and ecoPayz are also a good choice for American online betting fans.
UIGEA Clamped Down on Online Gambling Payments
This ban on online gambling-related payments is a direct result of the Unlawful Internet Gaming Enforcement Act (UIGEA) which was passed by Congress and then signed into law towards the end of 2006 by then President George W. Bush.
Sneaked in with the SAFE Port Act of 2006, UIGEA wasn’t designed to deter US citizens from gambling online, but American banks and financial institutions from processing gambling-related payments, and even possibly freezing and/or closing their accounts.
In essence UIGEA “prohibits gambling businesses from knowingly accepting payments in connection with the participation of another person in a bet or wager that involves the use of the Internet and that is unlawful under any federal or state law.”
All US-friendly Online Sportsbooks are Hosted Offshore
Luckily there are plenty of tried, trusted and reputable sports betting sites that are owned, operated and hosted offshore that accept Americans bettors, most of them licensed and regulated in recognised offshore online gambling jurisdictions.
The only downside of these sites from a US perspective is that American players have little recourse in cases where disputes or disagreements arise.
These sites welcome US players and shower them with generous welcome and reload bonuses, and promotions.
What the Kambi / Penn deal or alliance signal is that together they now own and control a large number of land-based sportsbooks and a cutting edge online betting platform. This means they could change the face of the land and online betting landscape in the United States in the foreseeable future.