What If Sports Betting Was Never Legalized?

The Actual History

For most of American history, sports betting existed in a legal gray area or was explicitly prohibited outside of Nevada. The Professional and Amateur Sports Protection Act (PASPA), signed into law by President George H.W. Bush in 1992, effectively banned sports betting nationwide, with exceptions for Nevada, Delaware, Montana, and Oregon, which had pre-existing sports gambling laws. PASPA prohibited states from authorizing, operating, advertising, promoting, licensing, or engaging in sports gambling.

For over two decades, this federal prohibition remained largely unchallenged. Nevada maintained its virtual monopoly on legal sports betting in the United States, while illegal bookmaking operations, offshore betting websites, and casual office pools flourished in the shadows. The American Gaming Association estimated that Americans illegally wagered approximately $150 billion on sports annually during this period.

The legal landscape began to shift in 2011 when New Jersey voters approved a constitutional amendment to permit sports gambling at racetracks and casinos. Governor Chris Christie signed legislation in 2012 authorizing sports betting, directly challenging PASPA. Major professional sports leagues (NFL, NBA, MLB, NHL) and the NCAA sued to block the law, initiating a six-year legal battle.

After several legal defeats, New Jersey's case (Murphy v. National Collegiate Athletic Association, originally Christie v. NCAA) reached the Supreme Court. On May 14, 2018, the Court ruled 6-3 that PASPA violated the 10th Amendment's anti-commandeering principle by preventing states from modifying or repealing their laws prohibiting sports gambling. The decision effectively struck down PASPA, returning authority to individual states to legalize and regulate sports betting as they saw fit.

The aftermath was swift and dramatic. New Jersey launched legal sports betting operations within a month. Delaware, which had already offered limited sports betting under its PASPA exemption, expanded to full-scale operations. By the end of 2018, seven states had operational legal sports betting. As of 2025, 38 states plus Washington D.C. have legalized sports betting in some form, with most offering both retail and online options.

The legalization triggered a gold rush in the sports betting industry. Established casino operators expanded into sports betting, while European gambling companies entered the U.S. market. New companies like DraftKings and FanDuel, which had built audiences through daily fantasy sports, pivoted to become dominant sportsbook operators. The American Gaming Association reported that Americans legally wagered over $100 billion on sports in 2024 alone, generating approximately $7.5 billion in revenue for operators and nearly $2 billion in tax revenue for states.

Professional sports leagues, once staunch opponents of legalized betting, rapidly embraced the new reality. The NBA and MLB signed partnership deals with MGM Resorts in 2018. By 2025, all major professional leagues have official betting partners, with gambling companies paying substantial fees for official league data and marketing rights. Broadcasts now regularly feature betting odds, dedicated gambling analysis, and integrated betting content. The NFL, America's most popular sport, generates an estimated $2.5 billion annually from sports betting-related partnerships and increased viewership.

The Point of Divergence

What if the Supreme Court had ruled differently in Murphy v. NCAA, upholding PASPA and maintaining the federal ban on sports betting? In this alternate timeline, we explore a scenario where the Supreme Court issued a narrow ruling that rejected New Jersey's challenge, reinforcing the federal government's authority to restrict states from legalizing sports wagering.

The 2018 Supreme Court decision hinged on the interpretation of the 10th Amendment's anti-commandeering principle. In our actual timeline, the Court's majority found that PASPA impermissibly commanded states to maintain laws prohibiting sports gambling. But this decision was not inevitable. Several plausible circumstances could have led to a different outcome:

First, the Court's composition might have slightly differed. If Justice Anthony Kennedy, who joined the majority in the 6-3 decision, had remained more aligned with his earlier views on federalism, he might have sided with the minority. Kennedy had previously shown deference to federal authority in certain federalism disputes, and a shift in his thinking could have flipped the decision to 5-4 in favor of upholding PASPA.

Alternatively, the case could have been decided on narrower grounds. Chief Justice John Roberts, concerned about the broader implications of striking down a federal statute, might have crafted a compromise opinion that upheld PASPA while providing limited relief to New Jersey through a more restricted interpretation. This approach would have maintained the federal prohibition while perhaps allowing for minor exceptions.

A third possibility involves the legal arguments themselves. If New Jersey's legal team had pursued a different strategy or if the sports leagues' attorneys had presented more compelling arguments about the integrity of sports, the justices might have been persuaded that PASPA served a valid federal interest that outweighed states' rights concerns.

In this alternate timeline, the Supreme Court issued its ruling in May 2018, with Justice Samuel Alito writing for the 5-4 majority: "While we acknowledge New Jersey's concerns, PASPA represents a valid exercise of congressional authority to regulate interstate commerce. The statute does not commandeer state regulatory apparatus but rather prohibits state authorization of gambling schemes that Congress has determined undermine the integrity of professional and amateur sports."

Immediate Aftermath

Legal and Political Reactions

The Court's decision to uphold PASPA immediately closed the door on New Jersey's six-year quest to legalize sports betting, triggering strong political reactions. Governor Phil Murphy expressed profound disappointment: "Today's ruling denies New Jersey residents the right to determine our own gambling policies and perpetuates an outdated prohibition that only benefits illegal operators."

Congressional reactions split along both partisan and regional lines. Representatives from Nevada, which maintained its exemption under PASPA, largely expressed relief. Senator Catherine Cortez Masto stated, "The Court has preserved a system that protects both the integrity of sports and Nevada's gaming industry." However, a bipartisan coalition of lawmakers from states eager to tap into sports betting revenue quickly introduced legislation to repeal PASPA legislatively.

The "Sports Betting Freedom Act of 2018," sponsored by New Jersey Representative Frank Pallone and co-sponsored by representatives from Pennsylvania, New York, and Mississippi, aimed to give states the authority to legalize sports betting. The bill gained significant momentum but stalled in committee as the 2018 midterm elections approached. Lobbying intensified on both sides, with casino interests and some state governments pushing for repeal, while major sports leagues and conservative religious organizations lobbied to maintain the prohibition.

Underground Betting Continues to Flourish

With legal channels blocked, the vast underground sports betting market not only continued but expanded. Offshore betting sites operating from jurisdictions like Antigua, Costa Rica, and Malta saw significant increases in American users. Technology made these offshore options increasingly accessible, with mobile-optimized sites and cryptocurrency payment options allowing bettors to circumvent traditional banking restrictions.

Law enforcement agencies faced mounting challenges in combating illegal bookmaking operations. The FBI estimated that organized crime still controlled approximately 40% of illegal sports betting in the United States, generating billions in untaxed revenue. Local police departments, already stretched thin, typically only targeted large-scale operations or those with connections to other criminal activities.

The American Gaming Association commissioned a study in late 2018 that estimated Americans were wagering approximately $175 billion annually on sports through illegal channels—a number that increased from previous estimates due to growing interest in sports betting that couldn't find legal outlets.

Sports Leagues' Evolving Stance

The professional sports leagues initially celebrated the Court's decision as a victory for the "integrity of the game." NFL Commissioner Roger Goodell released a statement reaffirming the league's opposition to widespread sports gambling: "We remain committed to protecting our game from outside influences that could call into question its integrity."

However, behind closed doors, attitudes were shifting. NBA Commissioner Adam Silver, who had publicly advocated for regulated sports betting since 2014, continued pushing for a federal framework. In an October 2018 interview with ESPN, Silver stated, "The Court's decision doesn't change the reality that Americans are betting on sports in massive numbers. We need to bring this activity into the light with proper regulation."

By early 2019, MLB and the NHL had joined the NBA in quietly lobbying for a federal regulatory framework rather than outright prohibition. Internal documents later revealed that these leagues had commissioned studies showing they were missing out on billions in potential revenue from media rights, sponsorships, and increased engagement.

Fantasy Sports and "Free-to-Play" Alternatives Explode

With traditional sports betting still prohibited, companies like DraftKings and FanDuel doubled down on their daily fantasy sports products while developing "free-to-play" prediction games that technically didn't constitute gambling. These products offered cash prizes for correctly predicting game outcomes or player performances but operated through sweepstakes models that skirted gambling laws.

Traditional media companies also rushed into this space. ESPN launched "ESPN Predict" in late 2018, a free platform offering prizes for sports predictions. FOX Sports developed "FOX Bet Super 6," offering cash prizes for correctly predicting aspects of NFL games without requiring entry fees.

These alternatives grew rapidly, with DraftKings reporting a 47% increase in daily fantasy users by the end of 2019. Television networks integrated these prediction games into their broadcasts, creating engagement that mimicked betting discussion without explicitly mentioning odds or wagering.

State Attempts at Workarounds

Several states explored creative legal strategies to circumvent PASPA despite the Supreme Court's ruling. New Jersey, still determined to capture gambling revenue, expanded its casino offerings and invested heavily in online poker and casino gaming, which remained legal under federal law.

Pennsylvania and Michigan passed "trigger laws" that would immediately authorize sports betting if PASPA were ever repealed by Congress or invalidated by a future Court decision. Other states expanded lottery offerings to include sports-themed games that carefully avoided single-game betting formats prohibited by PASPA.

Oregon, which had a partial exemption under PASPA for its "Sports Action" parlay game that had been discontinued in 2007, reintroduced a modified version through its state lottery in 2019. This move prompted immediate legal challenges from the sports leagues, creating another front in the ongoing legal battle.

Long-term Impact

Legislative Deadlock and Continued Prohibition

By 2021, the legislative effort to repeal PASPA had reached a stalemate in Congress. Despite having supporters in both parties, comprehensive sports betting legislation repeatedly failed to advance beyond committee hearings. The issue became increasingly politicized, with conservative religious groups and family advocacy organizations marshaling opposition by framing sports betting as a moral hazard and public health concern.

President Biden, who had expressed cautious support for state-regulated gambling during his campaign, found the issue too politically divisive to expend capital on. His administration focused instead on economic recovery from the COVID-19 pandemic and infrastructure initiatives.

Without federal action, the regulatory landscape remained fragmented. Nevada maintained its legal monopoly on full-service sports betting, while Delaware, Oregon, and Montana operated limited sports lottery games under their PASPA exemptions. The legal prohibition created a stark contrast between the United States and other major economies—by 2023, sports betting was legal in Canada, the United Kingdom, Australia, and most of Europe.

Economic Impacts on the Gaming Industry

The continued prohibition of sports betting dramatically altered the trajectory of the American gaming industry. Without the sports betting boom, major casino operators like MGM Resorts, Caesars Entertainment, and Penn National Gaming pivoted to other growth strategies. These companies invested more heavily in online casino gaming in states where it was legal and accelerated international expansion, particularly in Asia and newly regulated European markets.

European betting giants like William Hill, Flutter Entertainment (parent of Paddy Power and Betfair), and bet365, which entered the U.S. market aggressively in our actual timeline, scaled back their American operations significantly in this alternate reality. Some maintained minimal presence through partnerships with Nevada casinos, but most redirected their expansion capital to growing markets in Latin America, Africa, and Asia.

The most significant economic impact fell on companies like DraftKings and FanDuel, which in our actual timeline transformed from daily fantasy sports operators into dominant sportsbook companies. In this alternate timeline, both companies remained primarily fantasy sports providers with limited growth potential. By 2023, both had diversified into media content, data analytics, and free-to-play games, but their market valuations remained a fraction of what they achieved in our timeline. FanDuel, facing growth constraints, was fully reacquired by its parent company Flutter in 2022 for approximately $1.2 billion—compared to the $20 billion valuation it reached in our actual timeline by 2025.

State governments also felt the economic impact of the continued prohibition. By 2025 in our actual timeline, states collected nearly $2 billion annually in tax revenue from legal sports betting. In this alternate timeline, this revenue stream never materialized, forcing states to either cut services or find alternative sources of revenue.

Technological Development and Offshore Market Growth

The prohibition of sports betting in the United States created a technological divide between American companies and their international counterparts. Without a legal domestic market, U.S. companies fell behind in developing betting technology, risk management systems, and integrity monitoring tools.

This vacuum was filled by offshore operators who continued to target American customers despite the legal prohibition. These operators, based primarily in Caribbean and Central American jurisdictions with minimal regulation, became increasingly sophisticated. By 2025, offshore sportsbooks were offering advanced features like same-game parlays, micro-betting on individual plays, and integrated streaming—innovations that U.S. companies pioneered in our actual timeline.

The size of this offshore market grew substantially. By 2025 in this alternate timeline, an estimated $220 billion was being wagered annually by Americans on sports through illegal channels—approximately double the amount legally wagered in our actual timeline. This massive underground economy remained largely untaxed and unregulated, with consumers having little protection against fraud or predatory practices.

Cryptocurrency played a crucial role in facilitating this offshore market. Bitcoin and other cryptocurrencies became the primary payment method for American bettors accessing offshore sites, as they circumvented banking restrictions and provided pseudonymity. This created an unexpected consequence: Americans became adopters of cryptocurrency primarily as a tool for gambling transactions rather than as an investment or general payment method.

Impact on Professional Sports

Without legal sports betting, professional sports leagues in the United States developed along a markedly different trajectory. In our actual timeline, leagues like the NFL, NBA, MLB, and NHL embraced betting as a major revenue source and engagement driver. In this alternate reality, these leagues maintained their traditional stance against gambling while seeking alternative growth strategies.

Media rights remained the primary revenue driver, but the valuation growth was less explosive. In our actual timeline, NFL media rights deals signed in 2021 were worth over $110 billion over 11 years, partly driven by the engagement and viewership boost from legal betting. In this alternate timeline, these deals were approximately 15-20% lower in value.

Team valuations also grew more modestly. Without the betting-driven engagement boost, franchise values across major sports increased at rates closer to general inflation plus 3-5%, rather than the double-digit growth seen in many markets in our actual timeline.

The content and presentation of sports broadcasts evolved differently as well. Without the integration of betting content, broadcasts focused more on traditional analysis and entertainment elements. Fantasy sports remained a significant focus, but broadcasts lacked the odds discussions, betting trends, and wagering-focused alternate broadcasts that became common in our timeline.

The Rise of Alternative Engagement Models

With traditional sports betting unavailable, companies and leagues developed alternative engagement models that mimicked aspects of betting without technically constituting gambling. "Prediction marketplaces" emerged as a particularly successful format, where users could use virtual currencies or points to "invest" in specific outcomes, winning additional points rather than money.

The NBA led this trend by launching "NBA InvestPlay" in 2022, where fans could use virtual currency to predict game outcomes, player performances, and even draft positions. These predictions were structured as "investments" that paid dividends based on accuracy. Users couldn't cash out their virtual currency, but could use it to purchase merchandise discounts, exclusive content, or experiences.

Social gaming expanded dramatically, with apps allowing friends to make prediction contests and track results over time. Companies like ESPN, Yahoo, and CBS Sports created sophisticated platforms that organized friendly competitions with leaderboards and achievement systems designed to capture the competitive aspects of betting without the actual wagering.

These alternative models generated significant engagement but never matched the economic impact of actual sports betting. They served primarily as retention tools for media companies rather than revenue generators in their own right.

Public Health and Social Impact

The continued prohibition of sports betting created a different set of public health challenges than in our actual timeline. Without regulated operators required to implement responsible gambling tools and age verification, problem gamblers had fewer protections when using offshore sites or illegal bookmakers.

Research conducted by the National Council on Problem Gambling in 2024 found that approximately 2.8% of the adult population in the United States showed signs of gambling disorder, compared to 2.5% in our actual timeline. This slight increase was attributed to the lack of regulated options with built-in responsible gambling features.

However, the absence of widespread advertising for sportsbooks had measurable effects on youth attitudes toward gambling. Studies showed that teenagers and young adults in this alternate timeline had less normalized views of sports betting, with about 22% fewer college students reporting having placed a sports bet compared to our actual timeline.

The economic impacts of illegal betting remained concentrated in vulnerable communities. Without the creation of legal industry jobs (approximately 150,000 in our actual timeline), economic opportunities were limited, particularly in regions that would have benefited from retail sportsbooks or industry headquarters.

International Competitive Disadvantage

By 2025, the United States found itself at a competitive disadvantage in the global sports betting industry. American companies had limited expertise in an industry that was growing rapidly worldwide. While companies like MGM and Caesars developed sports betting operations in their international properties, truly American-grown betting technology and operational expertise lagged behind European and Asian competitors.

This disadvantage extended to data analytics, integrity monitoring, and fraud detection. In our actual timeline, American companies became leaders in developing sophisticated tools to detect suspicious betting patterns and potential match-fixing. Without a legal domestic market, this expertise developed more slowly and remained primarily in the hands of international firms.

The prohibition also affected international sporting events hosted in the United States. When the FIFA World Cup came to the United States, Canada, and Mexico in 2026, FIFA and international sponsors had to navigate the complex reality that in-play betting—a standard feature of soccer viewing globally—remained illegal in most of the host country.

Expert Opinions

Dr. James Harrison, Professor of Gaming Law at University of Nevada, Las Vegas, offers this perspective: "The Supreme Court's decision to uphold PASPA represents one of the most consequential legal and economic divergences in modern American history. By maintaining prohibition rather than embracing regulation, the United States essentially ceded a $150+ billion industry to offshore operators and illegal bookmakers. The economic impact goes far beyond the direct gambling revenue—it includes technology development, media rights valuations, and consumer engagement metrics that have fundamentally altered how sports are consumed globally. The U.S. now finds itself in the peculiar position of being a sports entertainment superpower but a sports betting backwater."

Sarah Ramirez, Executive Director of the Center for Responsible Gaming, provides a nuanced view on the public health implications: "The continued prohibition created a double-edged sword for gambling harm prevention. On one hand, we've seen less normalization of betting among youth and lower overall participation rates compared to countries with legalized sports betting. On the other hand, those who do bet face greater risks due to the unregulated nature of offshore sites and illegal bookmakers. Without legal operators required to implement responsible gambling tools, identify problem patterns, or enforce self-exclusion, vulnerable individuals have fewer protections. It's a classic case of prohibition potentially reducing overall usage while increasing harm for those who participate anyway."

Michael Thompson, former Executive Vice President of a major sports league who requested anonymity for his candid assessment, states: "Behind closed doors, league executives across all major sports view the Court's decision to uphold PASPA as a massive missed opportunity. The public stance against gambling was always more about leverage and control than moral opposition. Had the Court struck down PASPA, leagues were prepared to embrace betting partnerships worth billions. Instead, they've had to pursue less lucrative engagement strategies while watching betting activity continue underground. The NFL alone estimates it has foregone approximately $1.5 billion in annual revenue from betting partnerships, data licensing, and increased media rights values. That's why you're seeing leagues quietly lobby Congress for a federal framework while maintaining public opposition."