By repealing the Professional and Amateur Sports Protection Act (PASPA) in a 6-3 decision last 2018, the Supreme Court cleared the way for U.S. federal states to legalize sports gambling. The act, which previously defined the legal status of sports betting in the U.S., was found unconstitutional on the grounds of states' rights. With the decision, states have been given the freedom to decide the legality and limitations of sports betting within their borders. However, with the ever changing legal climate, any initiative taken going forward will tremendously impact the industry as a whole.
The market for unregulated gaming, and especially social gaming and online “games of skill,” has grown exponentially in recent years. Operators generally claim that no consideration is paid to participate in social gaming or that skill-based games (as opposed to chance-based games) are not a gambling activity and, therefore, they are not subject to various gambling regulations and licensing requirements. But the line between gambling and non-gambling activities is often blurry, and the standards, which change from jurisdiction to jurisdiction, are not well-defined, leaving operators potentially exposed. In recent years, some cases have been decided adversely to operators. And, as the market grows, there is greater regulatory scrutiny, and more lawsuits are being filed -- by state regulators and private lawyer -- challenging both social gaming and skill-based games as illegal gaming.