Sportsbook: What It Is, History, and Legality

What Is a Sportsbook?

A sportsbook is a company or entity that accepts bets. It can be legal or illegal. DraftKings is a licensed sportsbook, while Bovada is an offshore sportsbook that's been operating without a license in the U.S. for years. Players who live in Delaware, Maryland, New Jersey, New York, and Nevada will not be able to register and play on the site. Typically, sportsbooks accept wagers on most major sporting events, especially college and professional events. Some online bookmakers expand the kinds of bets they offer to other, non-sporting events, like the results of political elections or the Oscars.

In common usage, a sportsbook typically refers to a company that takes sports bets. A sportsbook is functionally the same thing as a bookmaker or bookie, but these terms usually apply to individuals or small groups of people who take bets. People will sometimes also refer to the place where bets are made as a sportsbook, which can be a building or even a website.

For many years, the only fully legal sportsbooks in the United States were in Nevada, although they also operated in limited form in Delaware, Montana, and Oregon. A 2018 Supreme Court decision changed that. Now, 30 states have legalized sportsbooks, and some allow these to be accessed online.

How a Sportsbook Works

A sportsbook is a place—either a website or a building—that accepts bets on sports. The most popular sports bets that bookmakers handle include:

• Baseball
• Basketball
• Boxing
• Football
• Golf
• Mixed martial arts
• Racing (both cars and horses)
• Tennis
• Soccer

Sportsbooks generally accept bets on either side of a sporting event. They can do this because of the difference between what you wager and what you win. Most bets at most sportsbooks require you to wager $110 to win $100, although some require $120 to win $100, and some discount sportsbooks only require you to bet $105 to win $100. This ratio applies to bets of every size: You could bet $55 or $11, and you’d then see winnings of $50 or $10 for those bets.

Sportsbooks are bookmakers, and they make money in the same way. For each bet, they will set a handicap which almost guarantees them a return in the long term.

The History of Sportsbooks

Many states have only recently made sportsbooks legal. Some states still require gamblers to place bets in person, but in others, you can now access sportsbooks online.

This was a fairly recent development. In the United States, the Professional and Amateur Sports Protection Act of 1992 designated only Nevada, Oregon, Montana, and Delaware as states that could allow legal wagers on sports other than horse and greyhound racing or jai alai.

As a result, a black market developed for the rest of the country whereby illegal operations of bookies provided opportunities for betting. Some bookies were involved in organized crime, while others operated independently, simply taking bets for a few friends, family members, or colleagues.

The Supreme Court ruled the 1992 act unconstitutional on May 14, 2018, which allowed legal sports betting at states' discretion. The ruling created opportunities for sports betting in any states that legislate in favor of legalization.

Since that ruling, many states have moved to legalize sports betting.

Are Sportsbooks Legal?

The 2018 Supreme Court decision permitted states to make sportsbooks legal, but states vary widely in their attitude toward sports gambling. As of January 2024:

• 38 states and Washington, D.C., have legalized sports betting through retail or online sportsbooks
• Four states have bills to legalize single-game sports betting or a voter referendum is scheduled 
• Seven states have no legislation; one state has dead legislation
  

In some states such as Utah, where sports betting is illegal, it’s unlikely that sportsbooks will be legalized in any form. However, Utah residents are able to use Bovada.

It’s important to note that just because a sportsbook is online doesn’t mean anyone can use it. The Wire Act of 1961 outlawed interstate gambling, and so states that launch (or plan to launch) online sportsbooks are careful to check that bettors are within state lines. Generally, this means that they structure online sportsbooks as a fenced-in market with geolocation services.

This means that even though BetMGM is now active in New Jersey and New York, it must operate slightly differently in each state in order to comply with state law and verify the location of all of its customers. “The verification is all done through a location service called GeoComply, which uses your phone or computer location to make sure you're within state lines," explains Steven Petrella, deputy editor for the Action Network. "However, if you're an Ohio resident [where sports betting is illegal] and travel to Michigan [where it is legal], you can bet legally.”

Because of the Wire Act, it’s likely that most states will eventually legalize sportsbooks, but there will almost probably never be a national sportsbook that is accessible from everywhere.

Choosing a Sportsbook

If you are looking for a sportsbook, you should consider many factors. The most important among them, according to David Forman, senior director of research at the American Gaming Association, “is whether it is legal and regulated in your jurisdiction.” Legal sportsbooks, he points out, offer consumer protections and a commitment to responsible gaming that doesn’t exist in the predatory, illegal sports betting market. This means “bettors are safest when wagering with a legal, regulated sportsbook.”

You should also choose a sportsbook that gives you good odds, of course. But as Petrella says, “Most sportsbooks are actually pretty similar in terms of the odds they offer.” If you're new to betting, he explains, you should care about three things:

• Are the book's odds in line with everyone else's? Make sure you're getting -110 on NFL point spreads, for example.
• Does the book offer the things on which you want to bet? If you're a big golf fan and bettor, do they offer plenty of golf markets?
• Is the book easy to navigate? Many sportsbooks are built on legacy technology, and it can be difficult to find anything.

Your options will vary by state, of course, and new concepts in sports betting are opening up all the time.

The Bottom Line

A sportsbook is a company or individual who accepts bets from individual sports bettors. Most of these bets are on whether a team or individual is going to win a specific sporting event. Sportsbooks were limited to just a few states in 2018, but since then have been legalized in 38 states across the country.