Following the Supreme Court’s decision to overturn the Professional and Amateur Sports Protection Act in 2018, legal sports betting in America has been expanding. Thirty-eight states and Washington, D.C. have legalized the industry and 33 of those have legalized online sports betting in addition to retail settings. But as Americans move their betting to a safe and legal market and states rake millions in tax revenues, some policymakers are itching to slam the brakes with heavy-handed federal regulations. That’s a terrible bet.
Contrary to claims, legalized sports betting isn’t causing a gambling apocalypse. It's not destroying household finances or turning every Super Bowl party into a gateway to ruin. In fact, recent analysis from the American Consumer Institute, using data from the Bureau of Economic Analysis, shows that gambling expenditures actually grew slower in states that legalized both retail and online betting than in those that didn’t. Legal sports betting hasn’t triggered a national gambling frenzy—it’s just shifted activity from shady corners to legal and regulated platforms.
The idea that people suddenly become reckless gamblers the moment you slap a legal stamp on a sportsbook isn’t just wrong—it’s a statistical fumble. Most of the research pushing the financial-doom narrative relies on correlation, not causation and ignores that households betting online on average invested more money in savings than those who didn’t. Hardly the image of reckless behavior.
Even the numbers focused solely on problem gambling don’t support alarmism. The National Council on Problem Gambling estimates that only 1 percent of adults suffer from a severe gambling disorder. That’s a serious issue for those impacted, but it’s also not an epidemic. Legal betting offers services to those who suffer from problem gambling by providing access to self-exclusion and other tools for problem gamblers—none of which you get with your sketchy neighborhood bookie or offshore website.
Some members of Congress now want to introduce federal controls that would overturn the legal sports betting systems that states have created. The proposed bill would force every state to get federal approval for its sports betting system, cap how much people can deposit, slap time-of-day curfews on advertising, and empower the CDC monitoring gambling. Because clearly, more red tape and fewer choices will attract bettors from illegal, but open, betting markets. Instead, these efforts would prop up the, already large, illegal gambling industry.
Despite legalization in most states, illegal online sports betting in America is still worth billions. In 2024, two-thirds of Super Bowl bets were placed illegally because in many places, the legal market is either nonexistent or so over-regulated that bettors would rather take their chances with illegal bookies. High taxes, deposit limits, and “affordability checks” (read: financial strip searches) just add barriers that push consumers back into the arms of the underground market.
Here’s a better play: let states do what they’ve already proven they can do—build smart, balanced frameworks that foster innovation, competition, and consumer protection. Instead of stifling the industry with federal micromanagement, we should double down on what’s working.
We already know ways to bring bettors into a more protected market. First, encourage competition. States that allow multiple operators incentivize them to provide better odds, more features bettors want, and stronger tools to promote responsible gaming. Just like in sports, in sports betting competition raises the level of play.
Second, invest in the future. Earmark a chunk of the tax revenue generated for problem gambling treatment and gambling education to encourage anyone who does have a gambling problem to seek help. Many who need help don’t get it—not because it’s unavailable, but because they don’t know where to turn or feel ashamed to do so.
The sports betting game is already well underway. Trying to call a timeout with federal overreach or puritanical panic won’t stop bettors from playing. States are already showing they can promote personal freedom and score economic gains, while helping the vulnerable.
Federal regulations on sports betting are a losing bet for the American people who deserve both the freedom to gamble if they choose and a safe and protected space to do it.
