Legal Sports Betting Partnerships: State-by-State Guide

Understanding Legal Sports Betting in the U.S.: A State-by-State Overview

Since the landmark Supreme Court decision in 2018 that struck down the federal ban on sports betting, the United States has witnessed a rapid proliferation of legal sports betting across states. The evolving regulatory landscape presents unprecedented partnership opportunities for affiliates, operators, and stakeholders in the betting industry. Building successful legal sports betting partnerships requires a deep understanding of each state’s regulatory framework, licensing requirements, and market characteristics.

This comprehensive guide explores the legal status of sports betting in all 50 U.S. states plus D.C., highlighting licensing basics and partnership opportunities. Whether you are an affiliate marketer, a sportsbook operator, or a business seeking collaboration, this article offers valuable insights into navigating the complex state-by-state sports betting environment for long-term success.

1. The Legal Foundation of Sports Betting in the U.S.

1.1 The Impact of PASPA Repeal

The Professional and Amateur Sports Protection Act (PASPA) passed in 1992 prohibited state-authorized sports betting nationwide, except for a few states with grandfathered exceptions like Nevada. In May 2018, the Supreme Court overturned PASPA, empowering individual states to legalize and regulate sports betting independently. This ruling unleashed a wave of legislative activity, enabling states to tap into a lucrative market and create regulated environments for operators and affiliates.

1.2 The Importance of State-Based Regulation

Unlike many countries with centralized federal oversight, sports betting regulation in the U.S. is state-centric. This means licensing standards, permissible bet types, tax rates, and operational rules differ vastly across jurisdictions. Understanding these nuances is critical for establishing compliant and profitable partnerships.

2. Licensing Basics: How States Regulate Sports Betting

2.1 Types of Licenses and Permit Structures

Most states require sportsbook operators, platform providers, and sometimes affiliates to obtain licenses to conduct sports betting legally. Licensing structures generally include:

• Operator Licenses: Authorize a company to accept sports bets within the state.
• Supplier Licenses: For companies providing sports betting software or data.
• Affiliate or Marketing Licenses: Some states require affiliates or marketers promoting sportsbooks to register or obtain licenses.
• Retail Licenses: Allow physical sportsbooks in casinos or venues.

Licensing fees vary widely—from a few thousand to hundreds of thousands of dollars—depending on market size and regulation.

2.2 Regulatory Authorities

Each state establishes a regulatory body overseeing sports betting compliance, licensing, and enforcement. For example:

• New Jersey: Division of Gaming Enforcement (DGE)
• Pennsylvania: Pennsylvania Gaming Control Board
• Colorado: Division of Gaming

Familiarity with these regulators and their rules is essential for partnership transparency and trustworthiness.

3. State-by-State Legal Sports Betting Snapshots and Partnership Insights

3.1 Northeast Corridor

New Jersey

• Legal since 2018, with some of the highest betting volumes nationally.
• Open licensing; multiple operators can enter the market.
• Partnership opportunities abound with established sportsbooks and affiliate programs.
• Focus on aggressive marketing and in-person and mobile betting options.

Pennsylvania

• Launched in 2019, Pennsylvania offers a mature regulated market.
• High licensing fees ($10 million for operators, $250,000 for affiliates).
• Vibrant affiliate ecosystem; preferential treatment for in-state partnerships.
• Strong emphasis on responsible gambling compliance.

New York

• Retail sportsbooks legal since 2019; mobile betting authorized in 2022.
• Operator licenses capped and approval tightly regulated.
• Affiliates need to work closely with licensed operators due to restrictions.
• Market expected to grow rapidly, creating new partnership opportunities.

3.2 Midwest Hub

Illinois

• Legalized sports betting in mid-2020.
• Sportsbooks include casino operators and independent licenses.
• Affiliate marketing permitted with registration and background checks.
• Partnerships thrive through combining retail and online operations.

Michigan

• Comprehensive sports betting legalization passed in 2019.
• Favorable affiliate marketing climate; no state-imposed affiliate licensing fees.
• Mix of tribal casinos, commercial sportsbooks, and online operators.
• Strong market growth signals promising partnership potential.

Indiana

• Early adopter with retail and online sports betting authorized since 2019.
• Low operator licensing fees encourage market entrants.
• Affiliate registration required; regulation remains clear and business-friendly.
• Affiliate partners benefit from growing mobile user base.

3.3 Southern Expansion

Virginia

• Mobile sports betting legalized in 2020 with retail to follow.
• Operator licensing is competitive; no affiliate license but registration required.
• Strong tech infrastructure supports digital partnerships.
• Emphasis on consumer protection and data privacy compliance.

Colorado

• Legal sports betting since 2020 with multiple operators licensed.
• Affiliate marketing is permitted and growing.
• Transparent sportsbook partnership programs available.
• Retail and online betting coexist with seasonal market fluctuations.

3.4 Western Wave

Nevada

• Traditional hub for sports betting since before PASPA repeal.
• Retail sportsbooks widespread; mobile betting available to residents.
• Operator licenses expensive; affiliate marketing mature but regulated.
• High-volume market with experienced partnership networks.

Washington

• Legalized sports betting in 2020 but with delayed launch phases.
• Strict rules on advertising and partnerships to prevent problem gambling.
• Native American tribes operate many retail sportsbooks.
• Affiliates face more regulatory hurdles; partnerships built carefully.

4. Key Considerations for Sports Betting Partnerships

4.1 Compliance and Licensure Verification

Always confirm the licensing status of potential sportsbook partners within the relevant state. Engaging with unlicensed operators exposes affiliates and businesses to legal risks, fines, and reputational damage.

4.2 Commission Structures and Payment Terms

State regulations influence the types of partnerships allowed, often impacting commission rates. Some states cap affiliate commissions or require transparent earnings disclosures. Understanding these nuances helps negotiate fair and sustainable revenue sharing.

4.3 Marketing and Promotional Restrictions

Each state enforces unique rules around advertising and promotions—some banning certain bet types, restricting endorsements, or limiting bonuses. Effective affiliates design marketing campaigns aligned with local statutes and consumer protections.

4.4 Data Privacy and Responsible Gambling

Legislation increasingly mandates adherence to consumer data privacy laws and responsible gambling measures. Partnership agreements should detail compliance strategies, including customer age verification, limits on bet sizes, and promotional safeguards.

5. Emerging Trends and Future Outlook

5.1 Interstate Compacts and Market Integration

Some states are exploring interstate agreements to share betting liquidity, enhancing market depth and odds competitiveness. Partners who position themselves ahead of regulatory changes will gain access to broader audiences and revenue streams.

5.2 Rise of Esports and Alternative Markets

Beyond traditional sports, states are opening doors to esports, prop bets, and in-play wagering. Affiliates tapping into these expanding niches have an advantage in diversifying portfolios and maximizing earnings.

5.3 Technology-Driven Partnerships

Advances in AI-driven analytics, mobile app development, and streaming integration create dynamic ways for partners to engage players. Legal environments that encourage innovation will attract partnership deals tailored to immersive experiences.

6. How to Get Started in Sports Betting Partnerships

• Research State Laws Thoroughly: Utilize state regulatory websites and industry publications for the latest licensing and compliance information.
• Partner with Established Operators: Prioritize sportsbooks with verified licenses and proven record of compliance.
• Understand the Audience: Tailor marketing efforts based on population demographics, popular sports, and betting preferences in each state.
• Focus on Transparency and Trust: Be clear about commission structures, terms, and advertising policies with partners and customers.
• Stay Updated: Regularly monitor legislative changes, industry reports, and consumer trends that could impact partnership dynamics.

Conclusion

Legal sports betting in the U.S. is a dynamic and evolving industry shaped significantly by state-level regulations. For affiliates, operators, and businesses seeking to form profitable and compliant partnerships, a nuanced understanding of each market’s legal framework is essential.

This state-by-state guide serves as a foundational resource to navigate licensing complexities, exploit partnership opportunities, and contribute to building a responsible, sustainable sports betting ecosystem. Heading into the future, continued regulatory shifts and technological innovation will further redefine partnership landscapes—positioning those well-informed and agile enough at the forefront of success in sports betting.