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Supreme Court lifts ban on (e)sports gambling, allowing state-by-state legalization

Supreme Court lifts ban on (e)sports gambling, allowing state-by-state legalization

May 14, 2018 | By Alissa McAloon

The United States Supreme Court has struck down a federal law from 1992 that banned the majority of states from legalizing betting on sports events, a ruling that could pave the way for legal bets to be placed on esports matches.

Previously, the federal law prevented states, excluding Arizona, from making their own laws about gambling on sports matches, so it is worth noting that states will still have to pass their own laws to legalize and regulate sports betting following the Supreme Court’s decision.

Companies like the fantasy sports and fantasy esports betting service DraftKings have already moved to take advantage of the court’s decision, with DraftKings in particular announcing that it will enter the sports betting market now that what it describes as the “outdated ban” has been overturned.

For esports in particular, regulated betting could help decrease underage gambling and online “skin betting” where players wager in-game goods on esports matches in illegal online gambling lobbies, a space that attracted nearly $5 billion worth of wagers in 2016.

Experts caution, however, that the esports industry would do well to learn from the missteps made in athletic sports events in the past in order to adapt to a world where gambling on sports matches is no longer illegal. 

For instance, Bryce Blum, a lawyer that specializes in matters relating to esports, shared his thoughts and guidance on how legalization could affect the esports industry in an insightful thread on Twitter, noting that  “legalization is a good thing if we embrace it and work with operators to address key issues.”

“The best part about esports is we get to innovate and learn from the historical mistakes of our traditional sports counterparts,” continues Blum. “So, let’s do that. Don’t get stuck in past policy blunders and please, please don’t ignore the problem.”

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