High Stakes and Fair Play: The Legal Gamble of Sports Betting

Saarang Ramabhadran

Edited by Keerthi Chalamalasetty, Carter Cunningham, Judge Baskin, and Sahith Mocharla

Legalized sports betting has expanded rapidly across the United States since the Supreme Court’s decision in Murphy v. NCAA (2018), which allowed states to regulate sports betting individually as opposed to by federal mandate. This marked a major shift, as sports betting moved from being largely illegal to widely accessible. Legalized sports betting has fundamentally shifted the regulatory landscape, but it also raises legal concerns about the integrity of the game. Sports betting expanding under decentralized state regulation as well as becoming an integral part of fan engagement has created new prevalent issues in sports like match fixing. The issue expands beyond just fans, as inconsistent regulatory standards across the states extends to concerns with player involvement. The Supreme Court’s decision in Murphy may have given states more freedom and individuality in the realm of sports betting. However, this decentralized control, without a uniform framework, leaves the door open for corruption in sports as a whole. 

Sports betting, defined in Senate Bill 1158 as the placement of a wager on the outcome of a sporting event where a winning outcome is based on the score, point total, point spread or performance of a team in a team sport or on the score, point total, point spread or performance of an individual athlete in a non-team sport, has been scrutinized as it is associated with underground, criminal activity [1]. For much of the 20th century in the United States, particularly from the early 1900s to the late 20th century, sports betting was illegal or heavily restricted. The demand was high but since there was no legal avenue many moved towards black markets. As time passed, sports betting began reaching larger audiences, prompting federal legislative engagement. Although efforts like the Wire Act of 1961 and the Illegal Gambling Business Act of 1970 tried to address this issue in its early stages, the primary legal framework in the United States regarding sports betting specifically comes from the Professional and Amateur Sports Protection Act (PASPA) in 1992. PASPA made it illegal for government entities to allow sports betting at any level of sports, meaning neither professional nor amateur [2]. The goal of this act was to regulate the integrity of sports by prohibiting states from sanctioning the expansion of gambling, nipping the issue in the bud. Prior to PASPA, Nevada was the sole state in which sports betting was full-scale and institutionalized, while other states like Oregon, Delaware, and Montana had limited forms of betting. Operating under a grandfather clause, Nevada was allowed to continue the operation of their sportsbook-style betting in casinos [3]. New Jersey was not given the same grandfathered status as Nevada. In replacement, PASPA gave New Jersey a 1 year window to legalize sports betting in Atlantic City, however, the state did not end up acting in that window. This functionally created a legalized monopoly for Nevada, which inevitably led to more illegal markets in other states, since new institutions could not allow sports betting.

As the demand for sports betting continued to rise unabated and largely unmet, multiple offshore sportsbooks and other black market operations continued to grow, with the value estimated to be billions annually [4]. There were a plethora of legal issues with these off-the-market operations, as not only did they evade taxation, but it directly fostered links between this type of off-the-grid betting and match fixing. The American Gaming Association reported that $84 billion wagered using illegal and offshore sportsbooks led to an approximate $1 billion in tax revenue loss [5]. The lack of oversight of these offshore sportsbooks, due to the absence of a regulatory framework, meant they were more vulnerable to criminal organizations wanting to fix matches. PASPA directly harmed the overall integrity of sports as it drove sports betting underground rather than establishing the industry, further pushing gambling toward these illegal markets that were more susceptible to organized crime. While underground markets increased risks due to a lack of oversight, the later expansion of legalized sports betting introduced a different set of integrity concerns tied to fragmented state-level regulation and the lack of uniformity. PASPA, rather than putting a stop to sports gambling, pushed it towards offshore markets with little transparency, no meaningful consumer protection, and greater exposure to corruption. PASPA’s weaknesses were exposed and became harder to ignore as illegal betting proliferated and many states were not able to regulate the activity. This exposed the holes in the United States regulation which set the stage for Murphy.

The case began with New Jersey passing the Sports Wagering Act of 2012, a state law that sought to legalize sports betting at casinos and racetracks, directly opposing PASPA. Their attempt was driven by a challenge to federal authority and an effort to assert state control as well as multiple economic motivations to bolster their casino industry through sports wagering. The NCAA, as well as other major sports leagues, including the NBA, NFL, MLB, and NHL, immediately took action by filing a lawsuit seeking to enjoin New Jersey’s Sports Wagering Act of 2012 [6]. The litigation began in 2012 as NCAA v Governor of New Jersey in the federal district court. However, on appeal, it became NCAA v. Christie, as then-Governor Chris Christie was named the state official. When Phil Murphy took office in 2018, the case became Murphy v. NCAA as Phil Murphy replaced Christie as the defendant.

The issue itself was not solely about gambling. The Supreme Court ended up finding PASPA in violation of the 10th Amendment due to its commandeering of state legislatures. This ties into the balance of power between federal and state governments. The 10th Amendment reserves powers that are not delegated to the federal government to the states, thereby limiting overreach into state governance. The majority opinion from Justice Alito further emphasized the idea that states had the right to regulate gambling within their own borders as a federal ban was unconstitutionally forcing certain prohibitions against their will [7]. PASPA was ultimately invalidated, allowing for states to create legislation of their own. However, because there was no replacement in national framework for PASPA, the SCOTUS decision fragmented the system where now each state regulates betting differently. This creates many inconsistencies trespassing on integrity.

The alteration in overall authority post-PASPA is central to the issue at hand. Returning control to the states with the lack of a standard, meant risks that come alongside sports betting were not eliminated, rather just distributed amongst states that legalize sports betting. Oversight varying widely means enforcement of said issues is not consistent and these gaps are what actors exploit leading to a plethora of harms for not only national leagues but for athletes and consumers as well.

The immediate impact of PASPA being struck down was the meteoric rise of (legal) sports gambling in other states. In just 5 years, over 30 states legalized some form of institutional sports betting or wagering. This legalization enabled states to then enact their own regulatory frameworks. On top of that, it led to the completion of New Jersey’s original goal of generating revenue with the new state-level legislation, bringing in around $11 billion in 2023 [8]. Although this transformation generated significant tax revenue, the decentralization of regulation raised concerns due to inconsistencies in the laws between states. Giving each state jurisdiction over sports betting meant that oversight would vary greatly. Sports betting has generated tremendous amounts of revenue, and the economic growth has definitely been beneficial. However, the ruling has exposed states to executive gaps and other vulnerabilities requiring safeguards to be implemented. 

With betting being so easily accessible since widespread legalization, the growth of match-fixing has become one of the biggest threats to sports integrity within the modern legal landscape. Match fixing for financial gain dates back to the early 20th century––its not a new or unfamiliar problem for governments––however, the sheer breadth is at an astonishingly new scale. Its profusion/growth/expansion since the 20th century foreshadowed to governments the necessity for legal oversight regarding betting related corruption. 

“The Black Sox Scandal” took place in 1919 during the World Series, in which eight of the players on the White Sox roster conspired with gamblers to fix the ballgame [9]. It is important to note the scandal did not happen in a vacuum. In fact, several of the players were paid poorly in relation to the money surrounding the sport, and some were vulnerable to outside pressures due to lesser financial security as well as little bargaining power. This meant that even satisfactory payments from gamblers could potentially have a large pull factor over these athletes. For athletes who were financially insecure, a gambler’s offer was not trivial; it was enough to make match fixing seem worth the risk.Following the scandal, all eight players were banned permanently from professional baseball, despite being acquitted in a court of law. The league made an emphasis on restoring public trust in the league and sport itself. This case was an early example of how powerful financial incentives are and how easily they can exploit gaps in oversight in the sports world. Occurring on baseball's biggest stage, the Black Sox scandal showed how, in the absence of effective regulatory safeguards, financial incentives could corrupt major contests in sports in America.

Gambling related corruption is broader than just the court or the field. Betting markets that operate without consistent regulation fuel fraudulent behavior and further weaken the public’s trust in national institutions. The impact extends to economic value as well as a lot of these issues result in economic loss for the states. Cultural value is also of importance as fans that don’t trust the institutions and leagues that run the culture, millions of dollars of revenue leaves the table due to decreased viewership and negative public sentiment.

Under a legalized but fragmented regulatory system, the overall integrity of sports is jeopardized. The main issue is that no uniform preventative measures increases vulnerability to exploitation in sports. State authorized platforms, whether it be a sportsbook in a casino, an app, etc., have made betting more ubiquitous. The idea of increased volume combined with inconsistent oversight, leading to more fixing attempts is evident in places like the United States and Europe. The European Commission itself describes legalized betting in the European Union leading to a rise in suspicious activities in high-stakes matches [10]. In the United States, in particular, a more pressing concern is not the sudden rise in match-fixing post legislation, but rather how the Supreme Court’s decision in Murphy led to a regulatory environment in which athletes are routinely exposed to integrity risks. Division I athletes, typically in their early 20s, in the NCAA were more likely in 2024 than 2016 to be contacted by external pressure regarding either inside information or intentionally influencing the outcome of games [11].

It is worth mentioning that beyond professional sports, many lower-level, less watched, and lesser-regulated leagues are also targets for match fixing. And it extends beyond the physical field as esports are also a growing market for sports betting. This environment is susceptible to two buckets of match fixing: individual players and/or teams taking advantage of an opportunity for personal gain, and more organized efforts where gambling groups bribe players. In esports, for example, the rapid growth of betting has coincided with fixing incidents, as seen in South Korean cases where players manipulated outcomes for betting gains. Further, one of the most well-known esports match fixing cases involve professional StartCraft II player Lee Seung-hyun. He was arrested and later prosecuted for intentionally throwing two matches. He ended up being sentenced for 18 months in prison, suspended for 3 years, and fined KRW70,000,000 [12]. This reinforces how legislation without oversight creates vulnerabilities, and it is worth mentioning exploitation in less-monitored areas remains a critical regulatory concern.

Addressing the issues regarding match-fixing would require a layered, coordinated regulatory approach. Under our current framework, states are granted a decentralized approach in which they hold jurisdiction and conduct oversight. However, major leagues across the country, like the NFL, have made partnerships with betting platforms to share data they collect to flag any suspicious activity [13]. Bolstering this collaborative effort could prove to be beneficial by patching enforcement gaps if visibility of data increases; the only drawbacks are the regulatory gaps created by the decentralized approach. At the federal level, the approach to mitigating this issue is through direct legislation that would mandate sportsbooks communicate any sort of suspicious activity, preserve the betting data, and cooperate with all investigations run by responsible departments within each state [14].

The frameworks and models we observe internationally provide valuable insight as different countries propose stricter regulations that overall increase transparency. For example, the United Kingdom’s Gambling Commission requires mandatory reporting of suspicious bets. Mirroring this framework, Australia’s Match Integrity Unit works closely with leagues in the country to further proactive monitoring. These foreign models should be used as a framework for the United States. Although not directly transferable, an adoptable legislative model that makes states adopt a more uniform reporting system would prove beneficial. Congress could also create a national baseline by regulating private betting operators directly [15]. Congress should enact a federal sports-betting integrity law that still preserves state rights and their ability to legalize betting, however, the law should impose a national minimum standard for reporting, data retention, and suspicious activity monitoring. Mandating information sharing would bolster transparency between government and actors.

With the rise in AI and data analysis tools, safeguarding against breaches in integrity is all the more possible. Detecting certain patterns is made possible by companies like Genius Sports, which provide real-time monitoring for these major leagues. The only clear path to eliminate these loopholes is to close the gap in the relationship between government agencies and betting platforms.

The debate between innovation and integrity remains. The main concern is the role of the leagues in sports betting and how much of an involved stance they should take. A big proponent is leagues receiving funding from a share of the betting platforms to spend on integrity measures to further mitigate any match-fixing potential. However, many athletes in today’s games are endorsing these betting platforms, further increasing the temptation of fixing.

The 10th Amendment makes federal versus state regulation a slippery slope as international programs that take a centralized approach seem to be better at cracking down on match-fixing efforts. The United States’ decentralized approach, although Constitutional, is much more susceptible to loopholes and other vulnerabilities.

Overall, the legalization of sports betting after Murphy v. NCAA (2018) has created a multitude of opportunities economically; however, it has also generated plenty of risks when it comes to integrity. Seeing the difference in behavior during PASPA to our current state led model underscores the idea of heavy oversight across betting platforms in America. Ultimately, the integrity of sports, beyond solely the professional level, is a shared responsibility of the government, leagues, consumers, and platforms. Proactively enacting regulations that crack down on breaches in integrity, like match-fixing, allows for the risks to deteriorate while the economic benefits that states undergo continue to grow.

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[1] https://www.azleg.gov/legtext/54leg/1R/bills/SB1158P.pdf

[2] The Professional and Amateur Sports Protection Act, 28 U.S.C. ch. 178 §§ 3701-3704 (1992). 

[3] Columbia Journal of Law & the Arts Editorial Staff, PASPA: Awaiting the Supreme Court Decision on Sports Betting, The Columbia Journal of Law & the Arts (Aug. 2, 2019), https://journals.library.columbia.edu/index.php/lawandarts/announcement/view/88.

[4] Daniel Boswell, The Safest Bet: A Comprehensive Review of the Fall of PASPA and

the Rise of Sports Betting, 28 U. Miami Bus. L. Rev. 115 (2019), https://repository.law.miami.edu/cgi/viewcontent.cgi?article=1351&context=umblr. 

[5] Dara Cohen, New AGA Analysis Reveals Illegal Gaming Remains Nearly a Third of the U.S. Market, American Gaming Association (Aug. 13, 2025), https://www.americangaming.org/new-aga-analysis-reveals-illegal-gaming-remains-nearly-a-third-of-the-u-s-market/. 

[6] Murphy v. N.C.A.A., 584 U.S 111 (2018). 

[7] See [6]

[8]American Gaming Association, Commercial Gaming Revenue Tracker (2023), https://www.americangaming.org/wp-content/uploads/2024/01/CY-2024_CGRT_v2.pdf. 

[9] Bill Lamb, The Black Sox Scandal, Society for American Baseball Research, https://sabr.org/journal/article/the-black-sox-scandal/ (last visited Apr. 7, 2026). 

[10] European Commission, Commission Sets Out an Action Plan for Online Gambling (2012), https://ec.europa.eu/commission/presscorner/api/files/document/print/en/ip_12_1135/. 

[11] Thomas Paskus & Jeffery Derevensky, Trends in NCAA Student-Athlete Gambling and Sports Betting Behaviors (2025), https://ncaaorg.s3.amazonaws.com/research/wagering/2025RES_WageringReport.pdf.

[12] John T. Holden & Sam C. Ehrlich, Esports, Skins Betting, And Wire Fraud Vulnerability, 21 Gambling L. Rev. 566 (2017), https://journals.sagepub.com/doi/10.1089/glr2.2017.2183?icid=int.sj-full-text.similar-articles.9. 

[13] NPR, NFL embraces legalized sports betting (Sep. 10, 2023), https://www.npr.org/2023/09/10/1198703050/nfl-embraces-legalized-sports-betting. 

[14] Milad Emamian, et. al. Regulating Sports Betting After Murphy v. NCAA, The Regulatory Review (Jan 4. 2020), https://www.theregreview.org/2020/01/04/saturday-seminar-regulating-sports-betting-murphy-ncaa/. 

[15] See [6]