USA Supreme Court Decision Paves Way for Legal Esports Betting

The Supreme Court in the United States made a significant ruling today that will allow for legal sports betting in the US. We discuss what this means for fans of esports betting and Rivalry.

TL;DR:

There’s a lot of legal stuff involved in this decision:

• There was a Federal law in place called the Professional Amateur Sports Protection Act (PASPA) of 1992, this law made it illegal for an individual state to legalize sports betting (except for Nevada). The Supreme Court overturned this law on May 14th, creating the opportunity for legal sports betting to exist in the US.
• This DOES NOT mean that sports betting is now legal across the US. It means individual states have the ability to legalize it, if they choose to do so.
• There are a few states that have already passed new laws and have the legal framework in place to offer betting within the next 2-3 months. Several other states have bills that were waiting on this decision that will now be passed. There will likely be legal sports betting in at least 10-15 states within the next year.

What About Online Betting?

This leads to the next big question, “Does this mean it’s legal to gamble online now?” The short answer is no. This remains a grey area that hasn’t been addressed yet. Until we hear from the lawmakers (the New Jersey Department of Gambling Enforcement will be the first to make a decision on this) nobody knows for sure. We’re hopeful and will be staying tuned in the coming weeks to find out more.

Regardless of whether it’s legal or not, there are other laws that make it very difficult for bookmakers to offer online betting. The Wire Act and the Unlawful Internet Gambling Enforcement Act (UIGEA) have been two major roadblocks to online gambling in the US for the past several years. Both of these laws involve restricting the movement of money and make it difficult (or impossible / illegal) for betting sites to accept deposits from US based players. The UIGEA is not relevant to legal betting, but The Wire Act is still a major issue that will need to be addressed before there can be widespread, legalized online betting in the United States.

If you’re interested in reading more on the ruling, this ESPN article answers many questions, and this New York Post article talks about what’s likely to happen next. Both are written by well respected legal experts.

What This Means For Esports

There are still a few hurdles to go before people in the US can legally bet on esports. It’s unlikely that traditional sports bookmakers will have esports matches available in their sportsbooks when they launch, and as discussed above, it’s still unclear what the online betting landscape is going to look like.

The first step in the process for legalized betting is having land-based casinos (outside of Nevada) offer sports betting in their sportsbooks. Yes, people walk into the casino, go to the cashier to place a bet, get their ticket, and head back to the cashier to get their winnings after the match is over. That’s a whole lot of effort just to place a bet on a match. Esports fans don’t even leave their house to get food anymore, there's no chance they’re driving down to the casino to place a bet! We think clicking a few buttons online (or in a mobile app) is much easier.

Traditional sportsbooks and casinos likely face increased risk and uncertainty offering esports, mostly because of how new these leagues are. The bookmakers are experts at offering odds on football, baseball, basketball and other sports that have been around for 80+ years. Esports are still extremely young. It will take some time for them to figure things out and feel comfortable having competitive video games as a part of their offering.

Betting and Integrity

This ruling will have a large impact on the game publishers such as Riot Games, Valve, Blizzard, and beyond. The potential for leagues, regulators and bookmakers to create valuable relationships that will help create and maintain the highest level of integrity in matches is a huge opportunity.

Matches will have the most integrity when the regulators, sportsbooks and leagues are all working together. Sharing data and information amongst each other will be the best preventative measure to stop bad actors and find the best ways to identify both players and bettors who are bad actors. It’s something that is in all of their best interest, yet in esports the leagues are currently unwilling to participate, due to their anti-gambling positions.

Professional sports leagues in the US (MLB, NBA, NHL, NFL, etc) are hoping to be paid a percentage from the sportsbooks that are offering betting on their leagues as an ‘integrity fee’. This fee would help offset the costs the leagues are facing in order to maintain the integrity of their matches, such as actively monitoring data and designing / implementing specific integrity programs for their respective sport.

The esports publishers / leagues would be interested in collecting similar integrity fees to help maintain match integrity, however in order to do so they would have to back off their current stance of being 100% anti-gambling, and work alongside the bookmakers and regulators. Having very global audiences and facing such different views and laws towards gambling makes it challenging for them to participate in these types of partnerships.

What This Means For Rivalry

We are eager to offer our trusted betting services to esports fans in the US. There’s clearly a big demand for this. We’ll be keeping a close eye on things as each state finds its footing in the sports betting / esports betting world.

We think the news today will finally allow US regulators to bring back legal online betting to legitimate operators licensed in the US. This is music to our ears, one of the core pillars of our company’s philosophy is offering an online gambling service with integrity and transparency.

More About Rivalry and Esports Betting

Interested in learning more about Rivalry’s approach to betting on esports? Alex “Machine” Richardson hopped on video and grilled 4 of the guys from the Rivalry staff. Check that out below: