Eight years after PASPA, US sports betting is still being decided state by state

The Supreme Court’s May 14, 2018 decision in Murphy v. NCAA ended the federal ban on state-authorised sports betting, but it did not create a single national market. Eight years on, the real issue for operators and PSPs is how each state’s tax rate, licensing rules and enforcement posture affects whether the legal market can keep pace with offshore and illegal books.

1. On May 14, 2018, the US Supreme Court struck down PASPA in Murphy v. NCAA, ruling that the federal law’s ban on state authorisation of sports betting violated the anti-commandeering rule. In plain English: Congress could regulate sports betting directly, but it could not order states not to legalise it.
2. According to the AGA’s Dave Forman, 39 states and Washington, D.C. have legalised sports betting, and 33 of them offer online betting. Another 11 states have not authorised sports betting in any form as of October 2026. Nebraska remains retail-only for now, with voters set to decide on November 3 whether to extend it online.
3. The economic numbers are already large enough to matter to any payments stack. US sports betting revenue reached $16.96bn in 2025, up 22.8 per cent year-on-year, on a handle of $166.94bn. State-regulated sportsbooks generated $3.71bn in taxes, up 32.4 per cent, according to the AGA.
4. The thing the legal market still cannot ignore is the offshore side of the ledger. An AGA analysis estimated that Americans wagered $84bn with illegal bookmakers and offshore sportsbooks. The illegal share of the total market fell from 36 per cent to 24 per cent compared with 2022, but that still leaves a very large pool outside regulated acquiring and KYC controls.
5. Sports Betting Alliance president Joe Maloney says the next phase depends on “reasonable taxes and efficient licensing” if the legal market is going to stay competitive. For operators and payment providers, that translates into a familiar equation: if the cost of compliance and access gets too high, volume tends to move to the places where the rules are thinner and the margins are uglier.

The policy lesson is not subtle. PASPA ended the old federal restriction, but the post-PASPA market is still a patchwork of state-level models. For PSPs, that means state-by-state licensing, tax-driven economics and ongoing pressure to keep legal wagering attractive enough to pull volume away from illegal and offshore operators.