Your Guide
Alabama sports betting is stalling in regards to sports law reformation and remains illegal as an onshore offering. Alabama residents and visitors, however, can place a wager at offshore sports betting sites, of which there is a common misconception that this is illegal – NOT True as explained further in ensuring paragraphs.
In summary, the latest Alabama sports betting law developments are as follows:
- In March 2020, Representative John Rogers submitted HB 336.
- This bill will legalize land based and mobile sports wagering in the state.
- It would allow a total of 4 licenses, to be awarded by a newly created Alabama Sports Wagering Commission.
- A proposed tax rate of 10% would be applied to gross winnings.
- The bill is currently with the Economic Development and Tourism
committee.
Sport betting handle for the year 2020 has been desperately sparse with all four major professional sports suspended for several months, and it’s only since mid year have competitions resumed (though in restricted formats).
Sports betting is slowly regaining momentum, and with sports bettors returning to the betting action.
Alabama Online Betting
Since Alabama has yet to pass laws allowing for in-person betting, the only options available are to either travel to a nearby state that has legalized sports betting or to bet online.
Betting online is legal as a sport bettor, but NOT as a sports book operator within the borders of the state. Therefore all online sports books that accept Alabama residents and visitors are located offshore. Commonly, they are established in the Caribbean or Central America and specifically cater for Americans. Legally they are able to do this, with the loose interpretation of the Wire Act. Also, since they are outside the borders of America (and of course Alabama) local laws do NOT apply to them.
Therefore these offshore sport books are legitimate and many Americans have been playing with them since the online betting began.
Opening an Online Sports Book Account
Betting online requires you to open an account deposit money, and maintain a balance with an internet bookmaker.
An online betting account acts as a special purpose bank account where you place bets from your balance. If you win, your balance will be credited and go up, if you lose your balance will go down. And if you balance lands at zero, you will need to make another deposit if you want to continue to place further bets.
If you’re winning more that you’re losing and your balance grows, you can request a withdrawal and the bookmaker will send you the amount you requested. Please note: withdrawal amounts are often capped at a minimum and transfers usually are limited to wire transfers or via bitcoin.
Alabama Sports Gambling Laws
Contrary to what many residents of Alabama believe, it is in fact, LEGAL for a sports bet to be placed at an offshore betting site.
Often sports gambling laws at a Federal level and Alabama State level are misunderstood because of the complexity of the law (and ambiguity).
The following interpretation of sports gambling laws applicable to Alabama are of course not of those of an expert lawyer. It is our own interpretation, in which it is not intended in anyway to condone the breaking of any laws whether it be local, state or federal and international.
If you have any doubt and need to have “peace of mind”, we strongly encourage you to seek a second opinion. If you want to err on the side of caution, because you have doubts, then please read no further.
In summary: It is legal for residents of Alabama to place a bet, BUT sports book operators whether State owned, tribal or commercial are not allowed.
We now explain in further detail why.
US Federal Sports Gambling Laws
Let’s start with way back in the 1950’s, when the mafia was beginning to dominate illegal activities through organized crime. During this period, the Federal government was disturbed by the number of growing sport books that were cheating customers and used to launder monies. Accordingly, the 1951 Organized Crime Act was introduced to curb illegal organized crime. This Act included restricting sports book activities to:
- a maximum sports betting revenue of $2,000, and
- a maximum of 5 sports bettors to a sports book.
This law set the precedence for a string of laws targeted at restricting sport bookmakers, rather than the sports bettor.
In the early 1960’s, when telephony was becoming widely used, this provided another surge in illegal sports bookmaker activity. The Wire Act was created to limit the ability of taking bets over the telephone. Again, this Federal Law was to hinder the illegitimate sport bookmakers thriving on illegal activity, and to not impose a ban on a sports bettor.
Then came along a string of betting scandals in the 1990’s. In hindsight, these scandals, probably weren’t as big a deal as they were first reported in the media. In some college games, players influenced the outcome ever so slightly through – missing a free throw or dropping a catch. Now up until this point, States had begun to establish or consider State sponsored sport books and lotteries.
BUT the Federal Law – Professional and Amateur Sports Protection Act of 1992 – put an end to individual States having the ability to legalize sports bookmakers (with the exception of Nevada). Once again, we would like to point out, that this did not make it illegal for a sports bettor to place a bet, but rather it was illegal to operate a sports book.
In the 2000’s, along came another Federal Law, which was directly as a result of the online poker craze. Yes, some over conservative lawmaker decided to introduce the Unlawful Internet Gambling Enforcement Act, sneakily tucked in behind an anti terrorism bill. And thus, the UIGEA was passed into Federal Law. This bill declared that banks are NOT to process transactions to known providers of offshore poker, casino and sport books.
And again, we would like to point out, that this did not make placing a sport bet illegal.
Finally, in 2018, the Supreme Court overturned the PASPA laws! This then opened the door for each State to be given the independence to determine their own sports betting laws. As a result, in Alabama, discussions continue between various stakeholders. With large sums of money to be wagered on sports, a battle is ensuring between native American tribes that operate land based casino, the State, and commercial operators.
Alabama State Gambling Laws
The first real discussion relating to State sports gambling laws began in April 2016, when the Attorney General Luther Strange, declared Daily Fantasy Sports contests, illegal under state law.
DraftKings and FanDuel were in the firing line of the Attorney General, who proceeded with issuing cease and desist letters to them. A review was conducted of state gambling laws and it confirmed that DFS activity constituted a form of illegal gambling.
Subsequently in May 2016, the DFS operators -DraftKings and Fanduel – confirmed that they had ended all paid contests in the state. This was as a result of the cease and desist notices issued by the Attorney General.
Several months, after DraftKings and FanDuel ceased operations, in February 2017, Senator Tom Whatley introduced legislation to authorize and regulate daily fantasy sports contests. SB28 would allow for the Secretary of State to administer and enforce regulations as defined in the bill. It would oversee the licensing of operators and set application and annual license fees. The bill was referred to the Tourism and Marketing Committee for consideration.
Daily fantasy sports legislation was also introduced to the House by Representative Alan Booth to exempt fantasy sports from the prohibition on gambling. HB354 would entrust the regulation and licensing of the industry to the Office of the Attorney General and proposes a minimum participation age of 19.
In April 2017, HB354 in the state was approved by the House by a majority of 43 to 38. HB354 authorized daily fantasy sports contests . The bill progressed to the Senate for consideration.
In February 2018, Senator Paul Sanford introduced SB325 to authorize and regulate daily fantasy sports contests. The bill allowed:
The registration of operators with an initial registration fee of
- $5,000 for operators with fewer than 5,000 active customer accounts
- $85,000 for operators with more than 5,000 active accounts.
In March 2018 – Legislation to authorize and regulate daily fantasy sports (SB325) was dropped from the legislature after the Senate voted against its passage.
In early 2020, Bill 315 was introduced to permit seven locations in the state to offer sports betting. The channels of in-person, online and mobile would also be offered and regulated.
Overseeing the sports betting regulations would be the Alabama Sports Wagering Commission. Each operator would be required to purchase a license and pay $100,000 with a tax rate of 15% of gross revenues imposed.
Finally in March 2020, Representative John Rogers introduced HB336 to legalize land based and mobile sports betting. A total of 4 licenses would be on offer, with a tax rate of 10% of gross revenues imposed.
Alabama Sports Wagering Commission
Throughout the discussion of passing legislation to legalize sports betting in Alabama, it has been proposed that a new body would be created named the: Alabama Sports Wagering Commission. This body would be tasked with regulating the sports betting industry – issuing licenses, creating an operating framework for both in-person, mobile and online, and auditing and compliance.
FAQ
Can I place a bet at online sports books in Alabama?
Yes, you can. You can place a sports bet at various offshore sports betting sites. It is not ILLEGAL for you to do so. However, it is illegal for any onshore American bank to facilitate the transaction of a deposit or withdrawal of a known offshore sports book.
What is the Alabama Sports Wagering Commission?
The Alabama Sports Wagering Commission is the governing body for regulating sports operations and betting in Alabama.
What is the minimum legal age in Alabama to bet online?
The legal minimum age to bet online is Alabama in 21 years old.
Can I place a bet in-person in Alabama?
There currently is no law that permits retail physical betting