The history of sports betting runs from ancient chariot tracks and Chinese horse races through the English bookmakers of the eighteenth century, an American century dominated first by racetracks and then by federal prohibition, and finally to the 2018 Supreme Court ruling that opened the door to a legal market where Americans wagered more than $157 billion in fiscal year 2025.1Tax Foundation. Expanded Legalization of Sports Betting Tax Revenue The through-line across every era is the same tension: the appeal of wagering on competition, and the recurring corruption that follows it.
Ancient Wagering on Competition
Betting on athletic contests shows up in nearly every ancient civilization that recorded its games. Variations of the Mesoamerican ball game Pitz were played as early as 1400 BCE and lasted almost three thousand years.2National Library of Medicine. History of Sports Gambling In China, wagering on horse racing and animal fighting was well established by the Spring and Autumn period (770–476 BCE), and the Records of the Grand Historian preserves a 1,000-tael gold wager between General Tian Ji and the King of Qi on a horse race.3The World of Chinese. Dice, Dominoes, and Deadly Games of Chance
The Ancient Olympic Games date to 776 BCE, and betting was a routine companion to the competition. So was cheating. In 388 BCE, the boxer Eupolus of Thessaly was recorded paying opponents to throw their Olympic matches. Rome built the Circus Maximus around 500 BCE for chariot and horse racing, and wagering on those contests and on gladiatorial fights became widespread enough that Caesar Augustus restricted it to the festival of Saturnalia around 20 BCE. The poet Horace complained in 23 BCE that young Romans had traded riding and hunting for games of chance, and Emperor Commodus turned the imperial palace into a gambling hall in 192 AD.2National Library of Medicine. History of Sports Gambling
English Horse Racing and the First Bookmakers
The modern shape of sports betting emerged in eighteenth-century England. Racing was the country’s national sport for more than 200 years, holding that place until football overtook it after 1918.4Boydell and Brewer. Horse Racing and British Society in the Long Eighteenth Century Early wagers were private matters between acquaintances, written into memorandum books for later settlement. Third parties called “keepers of the match book” served as record-keepers, and in 1729 John Cheny at Newmarket began publishing a formal list of horse-match results.5Britannica. Horse Racing
The 1740 Gaming Act, meant to curb cheating, concentrated the sport among wealthy owners and helped sophisticated betting markets grow. Sweepstake races appeared, and high-stakes ante-post wagering moved into London coffeehouses and clubs like Tattersall’s Turf Tavern. Working-class “blacklegs” entered the market with probability calculations and hedging tactics borrowed from financial trading. A single match at Newmarket in 1799 reportedly drew 300,000 guineas in wagers.6Digitens. Horseracing From this scene the professional bookmaker emerged: an operator who set odds designed to build in a percentage for himself.5Britannica. Horse Racing
The nineteenth century added the pari-mutuel system, in which bettors share a collective pool minus a management cut. In the twentieth century, the totalizator machine mechanized the process, recording bets and updating odds in real time.5Britannica. Horse Racing
Sports Betting Arrives in America
British settlers brought horse racing across the Atlantic. The first American racetrack opened on Long Island, New York, in 1665.7Human Kinetics. A Brief History of Sports Betting Racing was the country’s most significant spectator sport before the Civil War, though it stayed largely an elite pursuit. The economic depression of 1837 hurt Northern racing, and the sport revived after the war under elite jockey clubs. The telegraph and Western Union widened racing’s reach and helped build off-track betting networks.8Taylor & Francis Online. American Thoroughbred Racing
Wagering occurred at the track and through illegal bookmakers, often backed by organized crime. In the early 1900s, evangelical Protestants and social reformers succeeded in shutting nearly all American racetracks. The sport came back in the 1920s once states legalized on-track pari-mutuel betting, which became a reliable source of state revenue.8Taylor & Francis Online. American Thoroughbred Racing
The Point Spread
No single innovation shaped American sports betting more than the point spread. Charles K. McNeil, a University of Chicago history graduate and former bank securities analyst, is widely credited with inventing and popularizing it in the 1940s.9University of Chicago Magazine. Point Man McNeil was such a successful bettor that bookmakers began limiting his wagers, so he opened his own shop. His system replaced traditional odds with a line that handicapped games, predicting the margin between teams and inviting action on both sides at even money.10NBC Chicago. Chicago, Birthplace of the Point Spread
The spread became the industry standard for football and basketball and, in one historian’s phrase, allowed “the mass marketing of bets.” McNeil reported winning in 25 of 27 college football seasons, averaging $320,000 per year as of 1957, and Sports Illustrated later called him “the wizard who gave the world the point spread.”9University of Chicago Magazine. Point Man The innovation also produced a new kind of corruption: because a bet on the spread can be won or lost without affecting who takes the game, players can be paid to shave points rather than throw contests. The tactic drove the infamous college basketball scandals of the early 1950s. McNeil himself eventually closed his operation after the mob tried to force a partnership.10NBC Chicago. Chicago, Birthplace of the Point Spread
The Black Sox and a Century of League Fear
The most consequential American betting scandal happened in 1919, when eight Chicago White Sox players conspired with gamblers to throw the World Series to the Cincinnati Reds. The players — Chick Gandil, Eddie Cicotte, Shoeless Joe Jackson, Lefty Williams, Buck Weaver, Swede Risberg, Happy Felsch, and Fred McMullin — allegedly agreed to underperform for $100,000, said to be backed by underworld financier Arnold Rothstein.11U.S. Census Bureau. The 1919 Black Sox Scandal
Owner Charles Comiskey kept the affair quiet and re-signed most of the players for 1920. A grand jury looking at other baseball gambling turned its attention to the 1919 Series in September 1920, and on October 29, 1920, the eight were indicted for conspiracy.12SABR. The Black Sox Scandal A jury acquitted all eight defendants on August 2, 1921.11U.S. Census Bureau. The 1919 Black Sox Scandal
The verdict did not save the players. Kenesaw Mountain Landis, the first Commissioner of Baseball, permanently banned all eight, ruling that throwing games and even knowing about teammates doing so were “crimes against baseball.”13National Baseball Hall of Fame. American League Collection Reinstatement requests have been consistently denied. In 2015, Commissioner Rob Manfred said “it is not possible now… to be certain enough of the truth to overrule Commissioner Landis’ determinations.”11U.S. Census Bureau. The 1919 Black Sox Scandal The lasting effect was institutional: professional leagues built a deep fear of gambling that would shape their opposition to legalization for the next century.
Nevada’s Monopoly and the Federal Bans
While most states tightened restrictions in the early twentieth century, Nevada moved the other way, building a formal regulatory regime through its Tax Commission by 1949. The Kefauver Committee hearings of 1950–1951 exposed mob ties in Nevada casinos, including a “granddaddy clause” that let operators with criminal backgrounds keep licenses if they had been in business before 1949. The committee could not persuade Congress to shut Nevada down, but the pressure it created closed loopholes elsewhere, giving Nevada what one historian called “a cocoon of monopoly for the Nevada casino industry to grow unchallenged for the next 25 years.”14The Mob Museum. The Kefauver Hearing in Las Vegas
Congress reinforced the monopoly with a series of federal laws. The Federal Wire Act of 1961 prohibited the use of wire communications to transmit bets or information assisting bets on sporting events, targeting anyone “engaged in the business of betting or wagering,” with fines and up to two years in prison for violations.15Cornell Law Institute. 18 U.S. Code § 1084
The Professional and Amateur Sports Protection Act (PASPA) of 1992 went much further. Signed on October 28, 1992, and effective January 1, 1993, PASPA made it unlawful for any governmental entity to “sponsor, operate, advertise, promote, license, or authorize” wagering schemes based on amateur or professional athletic competitions.16GovInfo. Public Law 102-559 The law exempted Nevada’s licensed sports pools and pre-existing sports lotteries in Oregon, Delaware, and Montana.17GovTrack. Professional and Amateur Sports Protection Act New Jersey was given a one-year window to legalize and did not use it.
The Unlawful Internet Gambling Enforcement Act (UIGEA) of 2006 attacked the money side. It prohibited gambling businesses from knowingly accepting payments connected to unlawful online bets and required the Treasury Department and the Federal Reserve to develop rules that pushed card networks, ACH systems, and wire transfers to identify and block those transactions.18Federal Trade Commission. Unlawful Internet Gambling Enforcement Act UIGEA did not outlaw online gambling itself, but it choked off the financial rails and limited what online sportsbooks could do inside the United States.
Murphy v. NCAA and the End of PASPA
The federal ban collapsed in New Jersey. In 2011, New Jersey voters approved a constitutional amendment permitting sports gambling by a 64% margin.19Cornell Law Institute. Murphy v. NCAA Certiorari The legislature passed a Sports Wagering Act in 2012 under Governor Chris Christie. The NCAA, NFL, NBA, MLB, and NHL sued, and the Third Circuit found the law violated PASPA.20SCOTUSblog. Argument Analysis – Justices Seem to Side with State on Sports Betting New Jersey tried again in 2014 with a law that simply repealed the state’s own prohibitions rather than expressly authorizing betting. The leagues sued again, and both a Third Circuit panel and the full court en banc held the repeal still counted as an authorization forbidden by PASPA.
On May 14, 2018, in Murphy v. National Collegiate Athletic Association, the Supreme Court struck down PASPA in a 6–3 decision written by Justice Samuel Alito.21SCOTUSblog. Murphy v. NCAA The Court held that PASPA violated the Tenth Amendment’s anticommandeering principle by effectively ordering state legislatures to keep their gambling prohibitions in place. Because repealing a state ban would “authorize” sports betting under the statute, PASPA left states no room to set their own policy. The Court found no provision severable, and the entire law fell.22Supreme Court of the United States. Murphy v. NCAA Opinion
State-by-State Legalization Since 2018
Legalization moved faster than most observers expected. Delaware took bets at three casinos on June 5, 2018, less than a month after the ruling. New Jersey followed on June 14, when Monmouth Park and the Borgata opened sportsbooks. Mississippi and West Virginia went live that summer, and Pennsylvania by mid-November 2018.23ESPN. Sports Betting in the United States
The pace kept climbing. Michigan and Virginia launched in January 2021, New York’s mobile market opened in January 2022, and Ohio and Massachusetts arrived in early 2023. Vermont went live in January 2024 and North Carolina in March 2024. Missouri launched in December 2025, and Wisconsin signed a sports betting law in April 2026 with a launch pending.24Fox Sports. Where Is Sports Betting Legal
As of mid-2026, sports betting is legal in 39 states and Washington, D.C., with 30 of those jurisdictions offering licensed online wagering. Holdouts include Alabama, Alaska, California, Georgia, Hawaii, Idaho, Minnesota, Oklahoma, South Carolina, Texas, and Utah.24Fox Sports. Where Is Sports Betting Legal
Mobile Betting and the DFS Bridge
The legal ground for online wagering was tested first through daily fantasy sports. DraftKings and FanDuel dominated DFS, controlling more than 96% of the market among the top twenty competitors by 2015.25Cardozo Arts & Entertainment Law Journal. FanDuel and DraftKings – How We Got Here In October 2015, accusations that employees were using non-public data to win on rival sites triggered FBI and state attorney general investigations.26The New York Times. Daily Fantasy Sports New York Attorney General Eric Schneiderman issued cease-and-desist orders in November 2015, calling DFS illegal gambling under state law.27ABC News. Daily Fantasy Sports Sites Ordered to Stop Nevada regulators reached the same conclusion. By late 2015, the two companies’ combined monthly ad spending fell from roughly $100 million to about $1 million, ESPN ended its exclusive advertising deal with DraftKings, and DraftKings’ valuation dropped about 60%.
Governor Andrew Cuomo signed legislation in August 2016 classifying DFS as a game of skill, and other states followed.26The New York Times. Daily Fantasy Sports When Murphy came down, DraftKings and FanDuel pivoted straight into sportsbook operations and became the dominant platforms. In 2025, FanDuel led the U.S. market and DraftKings held a 32% share. DraftKings generated $6 billion in revenue that year and recorded its first annualized net income.28Business of Apps. DraftKings Statistics
Mobile now dominates the legal market. In 2023, 94% of total U.S. sports wagers were placed online.29UC San Diego Today. Study Reveals Surge in Gambling Addiction Following Legalization Total U.S. sports betting revenue hit a record $16.96 billion in 2025.30ESPN. Sports Betting Hits Record Revenue Football drives the largest share of handle, with the NFL and college football together accounting for 34% of the total in 2024, followed by basketball at 28% and baseball at 15%. Parlays alone made up 22% of handle and carried an average hold rate above 15%, making them exceptionally profitable for operators.31Doc’s Sports Service. Sports Betting Statistics A newer category of prediction markets, including Kalshi and Polymarket, has begun to blur the line between sports wagering and financial trading.32Legal Sports Report. Sports Betting Apps
Integrity Cases in the Legal Era
The pattern that ran through Eupolus, Rothstein, and the point-shaving era has continued into the regulated market. Licensed sportsbooks are required to share betting data with regulators, leagues, and independent integrity monitors, and they use algorithms to flag suspicious patterns.33American Gaming Association. Integrity Factsheet
In 2024, a DraftKings alert on suspicious NBA player-performance wagers led to the investigation of Toronto Raptors player Jontay Porter. DraftKings voided the wager, and the league banned Porter for betting on games and sharing inside information. In 2023, BetMGM flagged a $100,000 wager tied to University of Alabama baseball coach Brad Bohannon, who allegedly shared inside information with a bettor; the alert led to his firing.33American Gaming Association. Integrity Factsheet
Colleges have been especially exposed. In May 2023, Iowa investigators used geofencing software to identify clusters of betting activity coming from athletic facilities at the University of Iowa and Iowa State, triggering a probe that ended in criminal charges or lost NCAA eligibility for at least 35 athletes and staff. Felony charges were later dismissed after courts questioned the warrantless use of the technology, and athletes filed a federal lawsuit alleging Fourth Amendment violations.34ESPN. Inside the Iowa Gambling Investigation In June 2026, the NCAA ruled four former Alabama State men’s basketball players permanently ineligible for conspiring with bettors to throw a game in December 2024. Two of the athletes and two bettors were indicted on federal wire fraud and bribery charges.35NCAA. Sports Betting Integrity Violations at Alabama State
Regulation and the Public Health Cost
The American regulatory picture is a patchwork. Each state sets its own tax rates, licensing rules, advertising limits, and consumer protections. Iowa and Nevada charge 6.75% of gross gaming revenue; New Hampshire, New York, and Rhode Island charge 51%, and New York alone collects over $200 million per quarter under that rate.36U.S. Census Bureau. Sports Betting Tax Revenue All 38 jurisdictions with legal sports betting require self-exclusion programs, and 29 require operators to offer deposit, loss, or time limits. Colorado, Massachusetts, New Jersey, and North Carolina go further, requiring automatic algorithmic triggers that push operators to intervene with potentially problematic gamblers.37American Gaming Association. Responsible Gaming Statutes and Regulations Guide
Federal proposals are in play. The SAFE Bet Act, introduced in March 2025 by Senator Richard Blumenthal, would set minimum national standards for state programs, including a national self-exclusion list, a ban on credit card deposits, restrictions on advertising during live sporting events, and a ban on the use of artificial intelligence to build targeted promotions or microbets.38U.S. Congress. SAFE Bet Act of 2025 The “One Big Beautiful Bill Act,” effective January 1, 2026, changed the federal tax treatment of gambling losses so that bettors may only use 90% of their losses to offset winnings.39Bipartisan Policy Center. Should Congress Increase Taxes on Sports Betting In June 2026, the CFTC proposed rules for prediction markets that would prohibit certain sports-related event contracts, including individual prop bets, wagers on athlete injuries, and wagers on refereeing decisions.40Stateline. Trump Administration Proposes New Rules for Prediction Markets
The speed of the mobile market has raised alarm among public health researchers. A study in JAMA Internal Medicine found that internet searches for gambling addiction help rose 23% nationally after Murphy through June 2024, representing roughly 6.5 to 7.3 million searches. Pennsylvania saw a 61% surge in help-seeking searches after online platforms went live, compared with a 33% increase from retail sportsbooks alone.41UC San Diego Today. Study Reveals Surge in Gambling Addiction Following Legalization As of 2024, the National Council on Problem Gambling estimated that 2.5 million American adults likely suffer from gambling disorder, with another 5 to 8 million showing some problematic behavior. The highest risk factors include participating in multiple gambling activities, betting weekly or more, engaging in sports betting or online gambling, and being male and under 35.42National Council on Problem Gambling. NGAGE 3.0 Survey
Treatment has not kept up. Only 7 to 12% of people with gambling disorder seek help, and the National Institute on Drug Abuse has cited a shortage of dedicated services, inconsistent insurance coverage, and minimal physician training. No medications are FDA-approved for the condition, though opioid antagonists like naltrexone show the strongest evidence for reducing gambling urges.43National Institute on Drug Abuse. Gambling Disorder in the Age of Mobile Sports Betting The industry reports spending nearly $500 million a year on responsible gaming initiatives, and 32 jurisdictions have committed to fund research and treatment through earmarked gaming revenue.37American Gaming Association. Responsible Gaming Statutes and Regulations Guide The industry that began with side bets at Olympic footraces is now a $157 billion legal market inside American phones, and it is still working out how to live with itself.