It’s game time: Dive into the summer edition of The Sports Law Playbook, Loeb & Loeb’s quarterly briefing on all things sports law. In this issue, we explore the dramatic rise of legalized sports betting in the U.S. and what lawyers need to know as regulation and enforcement continue to evolve. We also break down the pivotal House settlement that reshapes the college sports landscape by paving the way for direct athlete compensation and long-term structural reform.

From Prohibition to Proliferation: The Legal Evolution of Sports Betting in the U.S.

By Loeb & Loeb Litigation partners John Gatti and Lauren Fried

The legal landscape of sports betting in the United States has undergone a dramatic transformation over the past few decades. Once relegated to the shadows by stringent federal restrictions, sports betting is now a multibillion-dollar industry operating openly in more than half the states. For lawyers navigating this new regulatory terrain, understanding its evolution is essential.

The watershed moment came in 2018, when the U.S. Supreme Court struck down the Professional and Amateur Sports Protection Act (PASPA) in Murphy v. NCAA, 584 U.S. 453 (2018). Enacted in 1992, PASPA effectively outlawed sports betting nationwide, except in states like Nevada that had grandfathered exemptions. The Court’s decision restored states’ rights to regulate sports betting within their borders, framing the federal ban as a violation of the 10th Amendment’s anti-commandeering principle.

In the wake of Murphy, states rushed to fill the regulatory vacuum. New Jersey, a key plaintiff in the case, was among the first to legalize and launch a comprehensive sports betting framework. Since then, more than 35 states and the District of Columbia have followed suit, each crafting its own legal architecture—ranging from in-person-only wagers to mobile-first models. Currently, several states, including Texas (Senate Joint Resolution 16), Oklahoma (House Bills 1047 and 1101) and South Carolina (House Bill 3625), have current bills pending that would enact or revise sports betting frameworks in their states.

This rapid expansion has brought with it a host of legal complexities. Compliance regimes vary significantly across jurisdictions, impacting licensing, tax structures, advertising and consumer protections. Lawyers advising operators, investors or state agencies must navigate not only state-specific statutes but also federal laws that remain in play, such as the Wire Act and the Unlawful Internet Gambling Enforcement Act (UIGEA).

Further, evolving technologies and market demands continue to push the legal envelope. Issues around data privacy, integrity monitoring and responsible gaming are generating new regulatory frameworks and litigation risk. Cross-border implications, especially with tribal gaming and international operators, add another layer of complexity.

The future promises continued flux. Federal involvement may reemerge, especially concerning standardization, consumer protection or taxation. Currently, Congressman Paul D. Tonko (NY-20) and U.S. Senator Richard Blumenthal (D-CT) are sponsoring the Supporting Affordability and Fairness with Every Bet (SAFE Bet) Act, legislation that would create nationwide consumer protections and standards for the mobile sports gambling industry. The legislation, which is keyed to the mental health elements of gambling, is aimed at addressing three areas tied closely to sports betting: advertising, affordability and artificial intelligence.

In this new era of legalized sports betting, the practice of sports law now demands fluency not just in gaming regulations, but in constitutional law, administrative law and commercial transactions. Practitioners should begin preparing now for legislation by reviewing and tightening marketing practices, reviewing data collection and use practices, and developing responsible gaming policies. It is critical to assess and stress test current policies to determine whether current advertising practices—especially those targeting users or using “risk-free bets” language—could run afoul of anticipated regulations. Notably, they run the risk of potentially misleading consumers about actual financial exposure. Counsel should also work cross-functionally to educate business teams on evolving legal risks and ensure third-party vendors are contractually obligated to comply. This is especially critical in the data use area where policies should be updated to clearly disclose how player behavior and geolocation data are collected and used for targeting, especially if that data is shared with third-party vendors or affiliates. 

While legislation is still evolving, the direction is clear: greater scrutiny on advertising, consumer production and data use. In-house counsel should treat this moment as a regulatory soft launch—a chance to proactively align practices, reduce risk and show good faith before rules become mandates.  

For those in the legal profession, the game is on.

College Sports Enters a New Era: House Settlement Greenlit, Athletes to Be Paid

By Loeb Litigation associate Alexander Loh

On June 6, 2025, U.S. District Judge Claudia Wilken approved the landmark House settlement, a resolution of three major antitrust cases that fundamentally transforms college sports by allowing schools to pay student-athletes directly starting July 1, 2025. 

The settlement establishes three key components: (i) $2.8 billion in back pay to student-athletes dating to 2016 for lost name, image and likeness (NIL) revenues (to be paid over 10 years); (ii) a new revenue-sharing system with an initial cap of $20.5 million per school that will grow over the settlement's 10-year term; and (iii) the elimination of scholarship limits in favor of roster limits. The NCAA will shoulder over $1.1 billion of the damages, while the Power Four, the Pac-12 and other Division I conferences will cover the remainder through various financial mechanisms.

This settlement represents the most significant change in college sports compensation history, creating a framework for direct student-athlete payments while establishing new oversight mechanisms, including a clearinghouse (operated by Deloitte) for NIL deals over $600 and a new College Sports Commission to enforce the regulations—though questions remain about implementation and potential legal challenges.

Stay tuned for a forthcoming Loeb client alert with a deeper dive into the details of this historic and game-changing House settlement.