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Can I Legally Bet on Esports?

By Sam Welch in Sports
| September 29, 2017 12:00 am PDT
esports-betting

Esports betting is a complicated legal matter. Because of strict wording in betting laws and the recency of esports, it can be difficult to determine whether or not you can legally bet on esports. Put simply, it is illegal to bet on esports in the United States, and legal in spots elsewhere.

However, this doesn’t quite cover all the ins and outs of esports betting law. While doing so would require a degree and likely tens of pages, we can easily discuss some of the corner cases.

Is Esports Betting Legal?

To put it bluntly, esports betting is no less legal than any other form of betting. You can bet on esports the same way you can bet on traditional sports like football, basketball, and baseball.

Where the issue comes in is online betting. eSports has yet to find a home in many offline areas, so those people who want to bet on esports must turn to websites. These websites are often legal but jump through some hoops to get there. We will discuss this more in the following section on esports betting in the United States.

What this does mean is that esports betting that happens offline is subject to state laws above federal law. In states like New York and California, this makes for rough terrain for esports betters. These states have a very strict policy on betting and don’t seem open to allowing esports. However, other states are much more lax about esports betting.

Nevada is currently the biggest exception. Home to Las Vegas, betting is one of the state’s biggest money makers. In May of this year, the Nevada governor ratified a law coming through the state senate that allowed for many new kinds of bets. While it wasn’t exactly the focus of the law, the Nevada eSports Alliance worked diligently in partnership with the Nevada Gaming Commission to include esports betting in the bill. This makes esports betting in Las Vegas perfectly legal, which is sure to be a game changer.

Esports Betting in the United States

As online betting came to popularity, the United States government worked hard to close up some holes in the wording of their betting laws. Where online betting had before sat in a legal gray area, it is now banned on a federal level in the United States.

Fortunately for esports betters, there are a few loopholes left open.

While not entirely legal, these loopholes do leave room for betters and bookies alike to say, “Well, you didn’t say I couldn’t.”

The most notable of these is the ability to bet digital items. eSports betting has a tradition of skirting around actual currency. One of the most popular ways to get around betting laws is to bet using in-game items. Sometimes these items have no value at all outside of the game, and other times the value of these items is only decided by an unregulated secondary market. These items hold no monetary value in the eyes of the government (yet), thus making them legal to bet.

US betters can also place bets online on websites based outside of the US. This is the murkiest of the loopholes we can exploit, but it is the backbone of online betting in the United States. As we’ll discuss in the next section, online betting is legal in many countries. You don’t need a citizenship to bet, and if a website is based in a legal country than it is legal for you to vote there.

Finally, physical betting happens most often in two places. The first, as many people know, is Indian reservations. Because US law applies only loosely here, gambling is perfectly legal on a reservation. There are also many “casino cruises” in the United States. These cruises are made to look and act as a casino. However, no bets are placed until they are in international waters, where US federal law does not apply.

Esports Betting Outside of the US

Like the United States, many countries have vague or intolerant gambling laws that leave esports betting and online betting in ambiguity. However, residents of the following countries may legally bet on esports:

  • The United Kingdom
  • New Zealand (at overseas websites)
  • Australia
  • Spain
  • Taiwan
  • Macau
  • Korea
  • Japan

While it is legal or tolerated in other countries, murky international law makes these countries the most important, along with a few unnamed in South America. If online betting is not legal in your state, province or country, it is likely legal if you are betting at a website that is operated from one of these countries.

This has turned these countries into a safe haven for online betting, and certainly lead to a windfall for many international entrepreneurs. However, we must be careful still when betting in an intolerant country on a website from one of these countries. While this is technically legal, there are still regulations that need to be put in place in these countries.

If you don’t see proof of regulation, then betting is likely illegal here.

If that type of thing doesn’t bother you much, you must also know that no regulation means no regulation. The law will not protect you, and many esports betting sites with a history of shady practices were run unregulated.

Legal Issues To Be Aware Of

Because of the ambiguity of esports betting law, there are a few things that esports bettors (and online bettors of all sorts) need to stay aware of. As touched on above, the biggest of these is a lack of regulation from any major source.  While rules and regulations are in place for traditional sports and traditional sports betting, the same isn’t true for esports and online betting. This means that there is no legal support in the case of cheating, bet manipulation, or failures to pay out.

With the influx of capital into the esports world, I’m sure that this is a topic we will revisit. Whether the changes will be positive or negative I can’t say, but they are certainly coming. Be sure to check back for more news on esports betting legality as it comes.

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