Was my sports bet legal?

could get revenues of anywhere from $3 to $15 billion if it legalized Internet gambling.. The legality of his wagers has not officially been questioned and most chatter has instead focused on the ethics of his gambling and on whether he violated any rules of the various sports governing bodies. The reason? His editor was organizing his own pool.

What about online betting? Thanks to the 2006 Unlawful Internet Gambling Enforcement Act (UIGEA), the online operator of a betting site is committing a crime by accepting money from U.S. (In other words, the person running a pool typically does not take a cut.)

The answer, it turns out, is far from simple. The making of bets, he says, is legal (or at least isnt prosecuted) in most states, including California and New York. In 2010, notably, New Jersey became the first state to legalize some forms of online gambling (Washington, on the other hand, recently made it a felony to bet on the Internet).

But with a few exceptions, anti-gambling laws have traditionally been state issues, not a matter of major concern to federal lawmakers.

More on sports betting:

But a worthwhile question Fortune readers may have, especially as March Madness season fast approaches, is what a typical personone that doesnt have a hand in the businessis permitted to do in terms of sports betting.

Where is bookmaking legal? Each of the following states allows for some sort of bet-taking, though what is permissible is highly specific, so this doesnt mean you can legally begin a new career as a bookie: Alaska; Delaware; Mississippi; Montana; Nevada; New Mexico; North Dakota; Oregon; Washington; and Wyoming. There is no federal law that makes it a crime to make a bet, says Professor I. Federal laws have generally switched from prohibition to grudging permission, he says.

According to Chuck Humphrey, a Colorado attorney specializing in gambling law, the basic gist of the law boils down to a distinction few people know or make: the laws are different for the person making the bet, or the bettor, and the person taking the bet, i.e. residents to fund their accounts. the bookmaker or, in more informal situations, the person running a pool. In addition, Connecticut, Florida, Nevada, Puerto Rico and Rhode Island all allow the taking of bets on jai alai, a popular sport for gamblers. Especially considering that, as one source shared with us, there are basketball tournament betting pools going on even at some District Attorneys offices. The facts have by now been well documented: last fall, prompted by a lawsuit, Forstmannwho heads IMG, one of the biggest talent agencies in the worldacknowledged he had placed bets on NCAA college basketball, pro football, and tennis matches involving IMG clients (though Forstmann appears to have stopped betting on college sports before entering that business). Of course, in Vegas casinos, all betting is legal.

About half of the 50 states do have ancient laws on the books that criminalize the making of bets. And of course theyre de rigueur around newsrooms too: one source told Fortune that a newspaper reporter once interviewed him for a story about the illegality of sports pools, only to have the story killed at the eleventh hour. In terms of social betting like a low-stakes poker gameRose says authorities look the other way. (So far, it appears he did not.)

Thats the case with federal law, too. Massachusetts Congressman Barney Frank (D) has been the leading proponent of the charge, and in 2007, U.S. The reason: laws about gaming, or legalized betting (as opposed to gambling which is usually unlawful) are murky, vary state to state, and are hotly debated.

Above board betting

Those running the pools, however, are technically breaking the law. A small number of states do have laws enabling the taking of bets, or bookmaking. The taking of a bet, however, is illegal in almost all states.

From March Madness to online poker whats legal and whats not in the complex (and lucrative) world of sports betting.

The takeaway, then, is that for most readers, your occasional bets at the racetrack, keno games in bars, and participation in March Madness pools wont be bringing the feds to your door anytime soon.

This month, Fortune delves into the story behind Ted Forstmanns controversial sports betting history in the story Ted Forstmanns bad bet. But it likely wont set off alarms with law enforcement. As for those using the sites, Humphrey says, enforcement actions against individuals are just about non-existent. States are divided on this, he points out, which makes establishing an overall, unified set of laws complicated.

Some politicians are starting to lobby for looser laws, pointing to the potential economic help that regulated gambling could bring. Humphrey says that March Madness pools are usually not prosecuted because they typically do not involve anyone making money other than the bettors. Representative Jim McDermott (D), Washington, cited an estimate that the U.S. Most of them make room to permit calcuttas, or betting auctions most often used with March Madness pools. However, the government only gets involved if its serioussay, in the case of a large-scale betting ring, or organized crime. Nelson Rose, gaming law expert and author of an internationally syndicated column called Gambling and the Law. Even if its with an illegal bookie, the bettor is not violating a law.

Unsurprisingly, Anthony Cabot, a well-known international gaming attorney based in Las Vegas, says the issue of sports gambling continues to confuse almost all non-experts. The common mistake is to assume the laws are the same for both parties, Humphrey says

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