Sports Betting Laws by State: What Small Businesses Should Know

Because states take different approaches—ranging from fully legal to completely prohibited—understanding where sports betting is legal is the first step in assessing risk, especially for businesses with remote or multi-state teams.

Sports Betting Laws Are State-Specific—and Written for Licensed Operators

In 2018, the U.S. Supreme Court struck down the federal ban on most sports betting and confirmed that states decide their own laws on legal wagering. Since then, states have taken different approaches—ranging from fully legal online and in-person betting to complete prohibition.

These laws are primarily written for licensed sportsbooks, casinos, and betting operators, not for workplaces or small businesses. Even in states where sports betting is legal, businesses generally may not accept bets, run betting pools, or promote wagering unless they fall under a specific legal category.

Where Sports Betting Is Legal for Individuals (As of Early 2026)

Sports betting laws don’t just affect gamblers—they shape where business risk begins.

States decide whether individuals may place sports bets through licensed sportsbooks. While these rules do not give businesses permission to run betting activity, they influence what employees and customers expect, request, or try to organize at work.

The chart below shows where sports betting is legal for individuals, and where it is not.
 

Status	States / Jurisdictions
Legal Online & In-Person Betting Individuals may place sports bets through mobile apps or websites, or at physical sportsbook locations such as casinos or licensed betting facilities.	AZ, AR, CO, CT, DE, FL, IL, IN, IA, KS, KY, LA, ME, MD, MA, MI, MO, NV, NH, NJ, NY, NC, OH, OR, PA, RI, VT, VA, WV, WY, D.C., Puerto Rico
Legal Online-Only Betting Individuals may place sports bets only through mobile apps or websites. In-person sportsbook betting is not allowed.	TN
Legal In-Person-Only Betting Individuals may place sports bets only at physical locations, such as casinos or tribal gaming facilities. Online or mobile betting is not permitted.	MS, MT, NE, NM, ND, SD, WA, WI
Sports Betting Prohibited Individuals may not legally place sports bets through sportsbooks in any form.	AL, AK, CA, GA, HI, ID, MN, TX, UT

 

Why Individual Betting Laws Don’t Give Businesses a Green Light

Here’s the catch: Even if sports betting is legal where your business is located, that does not mean your business can host betting pools, promote wagers, or organize betting activity.

In most states, organizing or accepting bets is limited to licensed sportsbooks or casinos, which operate under oversight from state gambling regulators. That said, many states do allow businesses to run certain promotional betting pools, contests, or sweepstakes under defined conditions. Businesses that choose to do so typically need to follow specific registration, licensing, or approval processes and comply with detailed rules around structure, prizes, and participation. Because those requirements vary widely by state, activities that appear straightforward often require careful planning to ensure they stay within permitted boundaries.

Some states also allow limited “social gambling” exceptions for informal, non-commercial betting between individuals. However, these exceptions are narrow, vary widely by state, and often prohibit business involvement entirely.

As a result, when a business hosts betting pools, promotes wagers, or organizes betting activity without proper licensing—especially for employees or customers—it may be viewed as operating or facilitating gambling, unless a specific exception clearly applies.

Informal Betting Pools and “Social Gambling” in the Workplace

Informal betting pools—such as March Madness brackets, fantasy leagues, or Super Bowl squares—are usually treated under state law as social gambling, not regulated sports betting. That distinction matters because social gambling is governed by separate rules that are often more restrictive for businesses.

Where social gambling is permitted, states commonly require that:

• No one profits from organizing the activity.
• Organizers participate on equal terms with other players.
• Wagers stay within small dollar limits, if permitted at all.

Even when a social gambling exception exists, employers may still choose to prohibit workplace pools to avoid legal, HR, or cultural issues. In states that do not recognize social gambling exceptions, hosting or organizing a betting pool at work may violate state law—regardless of how casual the activity seems.

Where Sports Betting and Social Pools Can Create Legal and HR Issues

Sports betting becomes a business issue when the company appears to encourage, organize, or manage wagering. Legal risk increases when a business:

• Ties promotions or contests to sports outcomes.
• Collects money or distributes winnings.
• Sets rules for bets or pools.
• Uses company tools (email, Slack, payroll, POS) to manage activity.

Employers may also face internal and policy-based risk, regardless of state law. Many workplace policies prohibit gambling, side agreements, or money-based activities during work hours or on company systems.

For example, a March Madness pool organized by a manager or promoted through company email can create significantly more legal and HR exposure than employees privately placing Super Bowl bets through a licensed sportsbook outside of work.

Taking on an organizing role can increase risk by:

• Making the business appear to operate or facilitate gambling.
• Undermining workplace policies or consistent enforcement.
• Creating employee pressure, disputes, or claims of favoritism.
• Complicating compliance for remote or multi-state teams.

Questions SMBs Should Ask About Sports Betting

These questions help identify risks and opportunities related to sports betting within your business.

• Do the states where our employees work allow sports betting, and in what form?
• Do those states recognize social gambling exceptions, and how narrow are they?
• Are managers involved in organizing, promoting, or collecting money?
• Do our workplace policies clearly address gambling or betting-related activity?

What To Do To Reduce Risk Around Sports Betting

These steps help small business owners take practical, protective action.

1. Check state laws before allowing any betting-related activity.
2. Update your handbook to reflect where employees actually reside and the current legal landscape.
3. Train managers to avoid organizing or facilitating pools.
4. Consult a Legal Pro to confirm your approach aligns with state law and company policy.

Sports betting may be more common, but the rules remain highly state-specific—and business involvement changes the risk. By understanding where betting is legal for individuals, and where businesses can cross the line, small business owners can set clear boundaries and reduce unnecessary legal and workplace exposure.