Sports betting has gone from back rooms to the mainstream. Since the Supreme Court struck down the federal ban in 2018, legal sports betting has grown into a market where Americans wagered about $167 billion in 2025, generating nearly $17 billion in revenue for licensed operators, according to the American Gaming Association (AGA).
That growth has a catch for anyone wondering how to become a bookie: taking bets without a state license is still illegal almost everywhere in the US, and federal prosecutors continue to bring cases against unlicensed bookmakers and the offshore sites that serve them. This guide covers where sports betting is legal, what it takes to operate legally, and the business realities of running a sportsbook in 2026.
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This article is general information, not legal or tax advice. Gaming law changes quickly and varies by state, so work with a gaming attorney before you take a single wager.
Quick Answers
- Is it legal to be a bookie? Only as a licensed operator, or as a licensed partner of one, in a state that has legalized sports betting. Independent bookmaking is illegal in every state.
- Where is sports betting legal? In 39 states plus Washington, DC as of October 2026, with online or mobile betting in roughly 30 of them (Sports Handle tracker).
- What federal taxes apply? A 0.25% excise tax on state-authorized wagers and a $50 annual occupational tax per person accepting wagers. Unauthorized wagers face 2% and $500 (IRS).
Table of Contents
- Where Is Sports Betting Legal?
- Can I Run My Own Online Sportsbook?
- Tips for Building a Legal Sports Betting Business
- The Future of Sportsbooks in the US
- Final Thoughts
1. Where Is Sports Betting Legal?
From 1992 to 2018, the Professional and Amateur Sports Protection Act (PASPA) limited full sports betting mainly to Nevada. On May 14, 2018, the Supreme Court ruled in Murphy v. NCAA that PASPA unconstitutionally commandeered the states, and struck the law down. Each state now decides for itself.
Most have said yes. As of October 2026:
- 39 states plus DC have legal, operational sports betting.
- About 30 states plus DC allow online or mobile betting. A handful, including Mississippi, Montana, New Mexico and Washington, allow only in-person betting.
- Missouri is the newest market, launching on December 1, 2025. Wisconsin legalized online betting through its tribes in April 2026, but it cannot launch until tribal compacts are updated.
- Still no legal market: Alabama, Alaska, California, Georgia, Hawaii, Idaho, Minnesota, Oklahoma, South Carolina, Texas and Utah.
Tip
“Legal in my state” does not mean anyone can open a book. Every legal state requires a license, and many limit licenses to casinos, tribes, racetracks or a small number of online operators. Check your state gaming regulator’s rules first.
2. Can I Run My Own Online Sportsbook?
Legally, yes, but only with a state license and only for customers located in that state. Federal law shapes how online betting works:
- The Wire Act (1961) bars using interstate wire communications to transmit sports bets, which is why licensed sportsbooks use geolocation to confirm each bettor is inside a legal state.
- The Unlawful Internet Gambling Enforcement Act (UIGEA, 2006) bars gambling businesses from accepting payments for bets that are illegal under state or federal law. Under its Regulation GG, banks, card networks and ACH participants must have policies to identify and block those payments. That is why unlicensed books struggle to process payments at all.
Paths into the legal market
- Operator license. The company that takes bets. This is expensive: Ohio, for example, charges a $150,000 application fee plus license fees of $500,000 to $750,000, and taxes sportsbook revenue at 20% (Ohio Administrative Code, Ohio LSC fee table). New York charges each mobile platform a $25 million license fee and a 51% tax on revenue.
- Supplier or vendor license. Companies that provide odds, data, platforms, geolocation, KYC or payment services to licensed books. This is where many entrepreneurs enter the industry.
- Partnering with a license holder. In states where licenses are tied to casinos, tribes or teams, online brands often operate through a partnership (“skin”) with the license holder.
- Retail and affiliate businesses. Sports bars, media sites and marketing affiliates can benefit from legal betting without taking bets, subject to state advertising and licensing rules.
What about offshore books and pay-per-head?
Offshore sportsbooks and pay-per-head (PPH) services, where a bookie pays a foreign platform a weekly fee per active bettor, are not a legal shortcut. Taking bets from US customers without a state license breaks state law and can violate federal laws on illegal gambling businesses, money laundering and the Wire Act. Recent cases include an Alabama ring tied to about $2 billion in offshore wagers and a California man sentenced to 27 months in 2026 for running a Costa Rica based site used by illegal gambling businesses. States are cracking down too, such as Tennessee’s October 2026 cease-and-desist orders to offshore books.
The illegal market is still large. The AGA estimates Americans bet about $84 billion a year with illegal bookies and offshore sites. But the legal share keeps growing, and so does enforcement.
3. Tips for Building a Legal Sports Betting Business
Running a sportsbook is a business first. Enjoying sports or gambling is not a qualification. Licensed operators succeed on compliance, risk management and customer trust.
Tip #1: Budget for Compliance Before Marketing
Expect background checks on owners and key staff, age and identity verification (KYC), geolocation, anti-money laundering programs, responsible gaming tools such as deposit limits and self-exclusion, and regular regulator reporting. These are licensing requirements, not extras.
Tip #2: Understand Your Tax Load
State taxes on sportsbook revenue range from 6.75% in Nevada and Iowa to 51% in New York, New Hampshire and Rhode Island (Pennsylvania IFO), and several states raised rates in 2025 and 2026. Add the federal 0.25% excise tax on handle, filed monthly on Form 730, and the annual Form 11-C occupational tax. Also note for your customers: starting with the 2026 tax year, gamblers can generally deduct only 90% of their losses against winnings.
Tip #3: Know Your Players and Manage Risk
Legal books win long term by pricing and managing risk well: setting limits, watching for sharp or suspicious betting patterns and protecting the integrity of the events they offer. Good data on what your customers bet and how much helps you build promotions that bring them back responsibly.
Tip #4: Keep Immaculate Records and Clean Payments
Sports betting is an inherently high-risk business for payment processors. Regulators and banks expect full audit trails for deposits, withdrawals and payouts. Payment rules are also tightening: Massachusetts, Iowa and Tennessee prohibit funding betting accounts with credit cards, more states have followed in 2026, and major operators such as DraftKings and FanDuel have stopped accepting credit card deposits nationwide. Plan around debit cards, ACH and other bank-based methods, and keep chargebacks under control.
4. The Future of Sportsbooks in the US
A few trends will shape the next few years:
- Mobile dominates. Most legal handle now flows through apps, and in-game (live) betting continues to grow.
- The last big states. California and Texas remain the largest markets without legal sports betting. Any change there would reshape the industry.
- Higher taxes. States like Maryland, Louisiana, New Jersey, Illinois and North Carolina raised sports betting taxes in 2025 and 2026, squeezing operator margins.
- League data, not integrity fees. The “integrity fee” the leagues sought in 2018 was never adopted by any state, but several states require or encourage official league data for in-game bets.
- Prediction markets. CFTC-regulated platforms such as Kalshi now offer sports event contracts in many states. Federal appeals courts are split on whether states can regulate them, a Supreme Court petition is pending, and the CFTC proposed new rules in October 2026. The outcome could change who competes with licensed sportsbooks.
5. Final Thoughts
Becoming a bookie in 2026 means joining a regulated industry, not working around it. The opportunity is real, but so are the licensing costs, taxes and compliance work, and the legal risks of operating without a license have only grown.
Whatever role you play, from licensed operator to supplier, payments are make or break. Many processors avoid gaming entirely, and those that do work with it want to see licenses, KYC controls and clean transaction data. If you are building a licensed sports betting or gaming business, see how Motile supports sports betting merchants or talk to our team about payment processing that fits your license and your state.
