The legality of online sports betting exists in a sort of shrouded grey fog of possibly questionable behavior. The feds haven't ransacked it like they did online poker, yet some betting sites have stopped taking US customers. However, there are still plenty of quality offshore operations that are willing to take your bets and pay out your winnings. If you want to know how to bet on sports online—like, say, the NBA playoffs—we'll tell you.
This is not an endorsement of skirting the legal/illegal line of betting online. We're just here to say that for the betting curious, it's possible. If you follow these instructions, you'll limit the risk of getting screwed and increase your risk of getting paid when you win. We're not guaranteeing that you'll win though. That's totally on you, and the sports gods.
Use These Sportsbooks
The most important thing in betting online is to attach yourself to a reliable, reputable online sportsbook. It's not unlike eating at a restaurant; why go somewhere dirty, overpriced, and awful tasting when Le Bernardin is out there? And since sports betting directly involves your cash moneys, it's even more important to stay clear of bad establishments and go with the ones you can trust.
Here are the online books we prefer: Legends and 5Dimes.
There are others, of course, but from talking with people who've won thousands of dollars betting online, Legends and 5Dimes are easily the most popular. The independent enthusiast site Sportsbook Review give both A+ ratings for reasons such as "having the most extensive selections of betting odds & wager types in the industry" (5dimes) and for having "friendly and efficient customer service" (Legends). Excellent customer service, as you'll find out as you sail deeper into the oft choppy waters of online gambling, is crucial. After all, they've got your money.
Both books have been around a long time—Legends started in 1996, 5Dimes in '99—and they're both confident that they'll continue to be in business for a very long time. When I asked them if they were worried about getting slammed by the feds like the poker sites, both sites made clear that they're completely offshore, with Legends based in Panama City, Panama and 5Dimes in San Jose, Costa Rica. Legends and 5Dimes both assured me that they have no reason to draw ire from US officials; they have no banks in the US, no official ties to the US and even use .eu URLS. If you're looking for even more reassurance, 5Dimes told me nearly that 90% of its business is from the US. Legends said that most of its customers are Americans, as well.
So yes, if you want to bet online, use Legends or 5Dimes. They're as safe as you'll find.
Fund Your Account
There are two options here, both of which might leave you feeling a little icky. But both get the job done! The best way to get money in your account, according to the Legends representative I spoke to, was to use Western Union or Moneygram. And as much as your internet instincts tell you that Western Union equates scam, this is not one. The process is simple; on each sportsbook's deposit page, select either money transfer service and Legends and 5Dimes will tell you who and where to send the money to. Set up a Western Union account online, send your money, note the control number and plug it back on the sportsbook's website to confirm the transaction. Your money will be loaded to your account in an hour. If you deposit more than $250, Legends and 5Dimes will waive the Western Union/Moneygram fee. Which is nice!
The second recommended method of deposit is to use a VISA credit card. I know that sounds scary but trust me here, these sites are professional. It's like shopping online! You do that all the time, right? And in some situations, using a credit card is preferable to Western Union and Moneygram because the minimum deposit is much lower and the sites don't charge fees. Both sites require a copy of your credit card (for authorization purposes) but once you clear that hurdle, you can freely deposit whenever you like. Note, if you live in Washington, Washington DC or Maryland, the credit card option won't work with 5Dimes as they don't take credit card deposits from those states for legal reasons. In other words, if you're from Washington, DC, or Maryland, you are probably more at-risk in terms of online sports betting.
Bet
This is the easy part. Now that you've got money in your account, pick the game you want to lay down dollars for and bet away. Reminder: no take-backs. And as they say (or at least I think they said it last time I was in Vegas), only bet what you can afford to lose. Don't be an idiot and max out your credit card just because it's there.
Collect Your Winnings
Each site has different hurdles to jump through. Legends' best option seems to be getting a cashier's check sent to you. The site offers one free cashier check every 30 days ($55 for additional withdrawals), so put yourself on a monthly withdrawal schedule to take advantage of the freebies. 5Dimes also sends a free check or money order every 30 days, but comes with the stipulation that you request your withdrawal on Monday between 9:00 am Eastern and 1:00 pm Eastern. Mark it in your calendar.
To be extra safe, take out your money monthly so it doesn't rot away or tempt you to bet more than you want. If you want to add more money, just deposit it again through Western Union or Moneygram. Depositing is always easier than withdrawing. They'll never stop you from depositing.
So, Are You Protected?
The truth is, no one is absolutely certain. The way things are going, you should be fine, but if our government decides to nail online sportsbooks like they did online poker sites, you're probably going to get screwed, financially at least. So the question is, will our government go after these sportsbooks?
There are two popular laws that get cited when online gambling is brought up: the Wire Wager Act and the Unlawful Internet Gambling Enforcement Act (UIGEA). Both sound bad. The UIGEA especially:
"Prohibits gambling businesses from knowingly accepting payments in connection with the participation of another person in a bet or wager that involves the use of the Internet and that is unlawful under any federal or state law."
But when I spoke to Lawrence G. Walters of Walters Law Group, he stressed that though these laws are fairly broad, they've been "interpreted by the courts to regulate gambling businesses", not individual Joe Everyman Bettor. The idea, at least so far, has been "to prohibit individuals from becoming bookies, bookmakers or starting a betting business", not to stop them from betting online.
However, Mr. Walters further explained that the nuance of legality also depends on your state. Some states (including, but not limited to, the three mentioned above) do have laws that say that betting on games of chance or skilled games is illegal. But since these betting activities are done over businesses on the internet, the question becomes "whether states have the legal authority to regulate the internet." Which, it turns out, they can't by the order of the Commerce Clause in the Constitution, which explicitly states that only the federal government has the power "to regulate commerce with foreign Nations, and among the several States, and with the Indian Tribes." And the feds have been much more forgiving.
Basically, the federal laws banning gambling have so far applied to gambling businesses in the United States, not individuals. State laws that do specify that gambling is illegal for individuals have no power to regulate the internet because of the Constitution. Judging by the fact that the feds haven't made any movement toward shutting down sportsbooks (if they were going to, why not do it at the same time as the poker sites?), you're probably, maybe, possibly safe.
And again, the best precedent for all of this is when the poker sites got shut down. The feds didn't go after individual players, they went after the gambling businesses. Player deposits were frozen for a while but eventually returned. Presumably, any action against the sportsbooks would take the same route.
And if not, well, you're gambling anyway, right?