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Sportsbook Definition

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A sportsbook is a company or entity that accepts bets. It can be legal or illegal. DraftKings is a licensed sportsbook, while Bovada is an offshore sportsbook that’s been operating without a license in the U.S. for years. Players who live in Delaware, Maryland, New Jersey, New York, and Nevada will not be able to register and play on the site. Most sportsbooks accept wagers on most major sporting events, especially college and professional events. Some online bookmakers expand the kinds of bets they offer to other, non-sporting events, like the results of political elections and/or the Oscars.


In common usage, a sportsbook typically refers to a company that takes sports bets. A sportsbook is technically the same thing as a bookmaker or bookie, but these terms are more often used for individuals (or small groups of people) who take bets. People sometimes will also refer to the place where bets are made as a sportsbook, which can be a building, or even a website.

For many years, the only fully legal sportsbooks in the United States were in Nevada, although they also operated in limited form in Delaware, Montana, and Oregon. A 2018 Supreme Court decision means that is changing quickly. Now, more than 20 states have legalized sportsbooks, and some allow these to be accessed online.


Key Takeaways

  • A sportsbook is a company or individual who accepts bets from individual sports bettors.
  • Sportsbooks generally accept bets on either side of a sporting event. They can do this because of the difference between what you wager and what you win.
  • For many years, the only fully legal sportsbooks in the U.S. were in Nevada, although they also operated in limited form in Delaware, Montana, and Oregon. A 2018 Supreme Court decision means that is changing quickly, however.
  • Now, more than 20 states have legalized sportsbooks, and some allow these to be accessed online.

What Is a Sportsbook?

A sportsbook is a place—either a website or a building—that accepts bets on sports. The most popular sports bets that bookmakers handle include:

  • Baseball
  • Basketball
  • Boxing
  • Football
  • Golf
  • MMA
  • Racing (both cars and horses)
  • Tennis
  • Soccer

Sportsbooks generally accept bets on either side of a sporting event. They can do this because of the difference between what you wager and what you win. Most bets at most sportsbooks require you to wager $110 to win $100, although some require $120 to win $100, and some discount sportsbooks only require you to bet $105 to win $100. This ratio applies to bets of every size—you could bet $55 or $11, and you’d then see winnings of $50 or $10 for those bets.


Sportsbooks are bookmakers, and they make money in the same way. For each bet, they will set a handicap which almost guarantees them a return in the long term.


Warning

A sportsbook makes money in the same way a bookmaker does—by setting their odds so that they will generate a profit in the long term.

The History of Sportsbooks

Many states have only recently made sportbooks legal. Some states still require gamblers to place bets in person, but in others you can now access sportsbooks online.

This was not always the case. In the U.S., the Professional and Amateur Sports Protection Act of 1992 allowed only Nevada, Oregon, Montana, and Delaware to legally wager on sports other than horse racing, greyhound racing, and jai alai.

As a result, a black market developed for the rest of the country whereby illegal operations of bookies provided opportunities for betting. Some bookies were involved in organized crime, while others operated independently, simply taking bets for a few friends, family members, or colleagues.

However, the law was ruled unconstitutional on May 14, 2018, freeing states to legalize sports betting at their discretion. The ruling opened the door for sports betting throughout the country if states decide in favor of it.

Since that ruling, many states have moved to legalize sports betting.

Important

               

Sportsbooks were limited to Nevada, Oregon, Montana, and Delaware until a 2018 Supreme Court decision gave states the ability to legalize them.

Are Sportsbooks Legal?

The 2018 Supreme Court decision permitted states to make sportsbooks legal, but states vary widely in their attitude toward sports gambling. As of Feb. 3 2022:

  • 30 states (including DC) have legalized sports betting through retail and/or online sports books   
  • 3 states have authorized sports betting, but have yet to launch   
  • 7 states have bills to legalize single-game sports betting or a voter referendum is scheduled   

In some states such as Utah, where sports betting is illegal, it’s unlikely that sportsbooks will be legalized in any form. However, Utah residents are able to use Bovada. You can check the situation in your state and see a list of licensed sportsbook operators at the American Gaming Association.

It’s important to note that just because a sportsbook is online, this doesn’t mean anyone can use it. The Wire Act of 1961 outlawed interstate gambling, and so states that launch (or plan to launch) online sportsbooks are careful to check that bettors are within state lines. Generally, this means that they structure online sportsbooks as a fenced-in market with geolocation services.

This means that even though BetMGM is now active in New Jersey and New York, they must operate slightly differently in each state in order to comply with state law, and have to verify the location of all their customers. “The verification is all done through a location service called GeoComply, which uses your phone or computer location to make sure you’re within state lines,” explains Steven Petrella, deputy editor for The Action Network. “However, if you’re an Ohio resident [where sports betting is illegal] and travel to Michigan [where it is legal], you can bet legally.”

Because of the Wire Act, it’s likely that up to 48 states will eventually legalize sportsbooks (again, excluding Utah and Hawaii), but there will almost probably never be a national sportsbook that is accessible from everywhere.

Gambling always involves a negative expected return—the house always has the advantage.

Choosing A Sportsbook

If you are looking for a sportsbook, you should consider many factors. The most important, according to David Forman, senior director of research at the American Gaming Association, “is whether it is legal and regulated in your jurisdiction.” Legal sportsbooks, he points out, offer consumer protections and a commitment to responsible gaming that doesn’t exist in the predatory, illegal sports betting market. This means “bettors are safest when wagering with a legal, regulated sportsbook.”

You should also choose a sportsbook that gives you good odds, of course. But as Steven Petrella, deputy editor for The Action Network, says, “Most sportsbooks are actually pretty similar in terms of the odds they offer.” If you’re new to betting, he explains, you should care about three things:

  • Are the book’s odds in line with everyone else? Make sure you’re getting -110 on   NFL point spreads, for example.
  • Does the book offer the things you want to bet? If you’re a big golf fan and bettor, do they offer lots of golf markets to bet on?
  • Is the book easy to navigate? Many sportsbooks are built on legacy technology, and it’s difficult to find anything.

Your options will vary a lot by state, of course, and new concepts in sports betting are opening up all the time.

If you or someone you know has a gambling problem, call the National Problem Gambling Helpline at 1-800-522-4700, or visit ncpgambling.org/chat to chat with a helpline specialist.

What Is a Sportsbook?

A sportsbook is the same thing as a bookmaker or bookie: It’s a company or individual that accepts bets from individual sports bettors. Sportsbooks accept bets on either side of a sporting event. They’re able to afford to do this because of the difference between what a bettor has to wager and what a bettor wins.

How Does a Sportsbook Make Money?

Sports betting companies make money by collecting a commission on losing bets, which is often called the vigorish. Often abbreviated to vig, the vigorish is the cut or amount charged by a sportsbook for taking a bet, also known as juice in slang terms. The sportsbook only collects the vig if the bettor loses the wager.

Are Sportsbooks Illegal?

Since 2018, when the Supreme Court overturned the Professional and Amateur Sports Protection Act (PASPA), 33 states and the District of Columbia have legalized sports betting and six more are currently considering legalization efforts, according to David Forman, senior director of research at the American Gaming Association. “This is a testament,” Forman argues, “to the consumer demand for legal markets and meaningful tax revenue generated by legal sportsbooks.”

The Bottom Line

A sportsbook is a company or individual who accepts bets from individual sports bettors. Most of these bets are on whether a team (or individual) is going to win a specific sporting event. Sportsbooks were limited to just a few states in 2018, but since then have been legalized in more than 20 states across the country.



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