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Why is Fantasy Sports betting legal and online poker not legal in many States

Author: americangambler | Last Updated: April 19, 2019

Gambling as a whole is undergoing major changes in America, following the Supreme Court’s 2018 decision to overturn the 1992 Professional and Amateur Sports Protection Act that banned sports betting.

Fantasy Sports remained legal due to a provision in the federal Unlawful Internet Gambling Enforcement Act of 2006 that classified fantasy sports as games of skill – which were legal – and not as games of chance – which were illegal and into which real-life sports betting and online poker was lumped.

Today, more than 59 million Americans are betting some USD 7.22 billion every year in fantasy sports events based on the results of real-life games.

As of 2019, online poker was legal and regulated in Nevada, New Jersey, and Delaware – with
Pennsylvania expected to become the fourth state in the early part of 2019. West Virginia is also close to making online poker legal sometime in 2019, according to reports.

More sports betting states, such as Kentucky, are now considering including online poker games in State-level bills on gambling. According to the news agency AP, a proposal under consideration in Kentucky in early 2019 would require bookmakers to pay a 9.75 percent tax on its revenue, which does not include money paid to people who win. The tax rate would be 14.25 percent for wagers made online.

But a Department of Justice opinion in January 2019 has caused consternation in States that do allow online gaming such as poker. It interprets the federal Wire Act, which prohibits interstate wagering, to apply to any form of gambling that crosses state lines.

The opinion reversed an earlier opinion during the Obama administration in 2011 that had said online gambling within states that does not involve sporting events would not violate the federal law.

The implications on the industry remain unclear pending a set of enforcement guidelines from the Office of Legal Counsel.