Online Sports Betting in the US: A general Overview

With the recent explosion of the home computer industry and the subsequent exponential growth of the internet it was inevitable that these two events would give birth to the growth of online sports betting in the United States. Prior to the introduction of betting on sporting events via online, the only state where the activity was legal was Nevada. 

If a patron wanted to bet on the outcome of a sporting event then they were forced to seek an illegal (and often unreliable) avenue and find a ‘bookie’. A bookie is an individual that would ‘make book’, that is take a bet, on a sporting event at various odds. Since making book is considered illegal the bookie is free to set odds and collect payments in any manner that they wish. This led to the criminalization of the profession.

While it is still illegal to place bets on sporting events in 49 states, the advent of internet gambling uses a technical loophole to skirt the law. All such sites are based out of the contiguous United States (and their territories), thus placing them out of the country’s jurisdiction. Online betting has widened the scope both in the type of bettors and the number of events available to bet on.

With online betting a person has a wide variety of events on which to wager. Everything from horseracing to pro and amateur sports betting can be found somewhere on the internet. Every type of bettor is catered to from ‘squares’ to ‘sharps’. A square refers to an amateur or casual bettor. Someone who is simply dabbling in betting and usually has set small limits on their betting. ‘Sharps’ is a term that refers to professional gamblers who will often wager large amounts of money on one or more sporting events (often simultaneously).

There are online betting sites that will cater more towards sharps. These sites offer higher (or sometimes no) betting limits, higher moneylines (odds) and a lower vigorish or simply known as the ‘vig’ (the fee charged by the person taking the bet). These sites make their money on losing bets and sometimes charge fees for withdrawing a bet or making a minimum bet.

Sites that cater to ‘squares’ will generally set lower limits and even offer signup bonuses to their patrons. The also tend to charge a higher ‘vig’ (11-10) and will set lower moneylines.

Squares tend to bet on only the major professional sporting events: football, basketball, hockey and baseball, while sharps will place wagers on more ‘exotic’ events such as college basketball and football.

Sports books in Nevada conducted over 6 billion dollars worth of wagers in 2006. Online bets for the same period were 27 billion, almost 5 times that of traditional wagers. It is estimated that by 2015 the figure will be almost 127 billion online bets placed on various sporting events in the United States.

Even with the recent scandals involving sporting figures and referees (e.g. the latest in professional basketball) there seems to be no damping of the desire of individuals to wager on the outcome of sporting events. The ability to do so online has only increase the opportunity to do so.