In 2018, the US Supreme Court overturned the federal law that made sports betting illegal nationwide. Now, it's up to each state to determine if sports betting is legal within its borders. Since then, sports betting has taken off exponentially... with scam artists following the money and flocking to the field of sports betting. Learn more about the sports betting scams to look out for and what to do if you’re affected by one. 

For years, sports betting has been big business. But since the US Supreme Court overturned the federal ban on sports betting in 2018 (their ruling let states determine their own laws around it), sports betting has taken off.

According to the Pew Research Center, one in five adults bet on sports at least once in the last year. And some experts in the gambling sector predict that sports betting could bring in around $40 billion by 2030.

Since scam artists always follow the money, they have flocked to this kind of gambling. In fact, sports-betting scams are so common that the Better Business Bureau (BBB) issued guidelines to protect gamblers earlier this year.

So, what kind of sports betting scams should you look out for? And if you fall for one, what should you do next?

Where is sports betting legal? 

In states where sports betting has become legal, states and sportsbooks alike clamored to get a piece of the business.

Local governments could tax regulated sports betting and sportsbooks were confident its revenue stream would grow. They were right.

Today, nearly 40 states allow some form of sports betting whether in-person (like at a casino) or online (like with an app).

And the list continues to grow. To see each state’s status, visit the American Gaming Association (AGA), which keeps a current list on its site.

Fast Facts

What is a sportsbook?

Historically, a “bookmaker” predicted the odds of an outcome in a game, collected your bet, and managed your payout if your wager panned out. Today, the phrase for such a person or entity has morphed into “sportsbook.” Sometimes, a sportsbook refers to a place, like a casino, while other times it might indicate a digital entity, like a website.

Most sports bettors place their wagers online. There's a wide range of sports to bet on, from baseball, basketball, and football to car racing and even mixed martial arts.  

How sports betting works

In sports betting, a person wagers a sum on the chances that this or that will occur in a game or match. For example, you might bet on which team or player will win, how much they will win by, or how many total points a game may have.

There are far more options, of course. In 2023, the sports betting group FanDuel challenged users to bet on the possibility that each of the twelve National Football League (NFL) teams playing in specific timeslots on one day would score a field goal. When the dozen teams nailed their field goals, FanDuel had to pay out $20 million to those who took on their 200 to 1 wager. One anonymous person wagered $1,584 and walked away with $318,300.

How did sports betting get so popular in the first place? After the U.S. Supreme Court struck down the federal ban on sports wagering, sportsbooks dumped millions into marketing — in hopes of converting the millions of existing online fantasy sports players and other betting fans into users and customers.

In the five years following the change in law, Americans have wagered $220 billion on sports, according to the AGA. Some experts even believe sports betting will overtake the most popular form of gambling: lotteries.

The dangers of sports betting

“As soon as the NFL season or March Madness starts up again, so do sports betting scams,” says Brian Stuart, Senior Director of Customer Care at Allstate Identity Protection.

Experts at the BBB outline how easily it can happen: You go online to find a sportsbook, pick one that looks safe, sign up, place your bet, and, when you go to collect, you hit a wall.

Here are a few examples that have been reported to the BBB Scam Tracker:  

  • Victim one met a scammer on Bumble who first befriended them, then pushed them toward a “sure bet.” Loss: $1,000 

  • Victim two tried to collect their winnings and the sportsbook sent them a check their personal bank deemed a fake. Loss: $3,800

  • Victim three reported they found a betting site through a basic online search. After winning a bet, the victim tried to collect their earnings several times. Eventually, they submitted photos of their ID and a blank check at the direction of the sportsbook’s fake help desk. Their monetary loss totaled $642 but, by sharing their personally identifiable information (PII), that monetary loss may only be beginning.   

How to avoid sports betting scams

Besides advising on responsible gambling, the BBB outlines a handful of practical tips to avoid falling victim to sports betting fraud.  

  • Follow the national leagues. The NFL, NHL, MLB, WNBA, NHL, and some colleges have partnered with more well-known gambling partners like MGM, Bally’s, PointsBet, and DraftKings. If a national sports league has a relationship with a sportsbook, it’s more likely to be trustworthy.

  • Stick with the big names. Well-known brands like ESPN have thrown their hat in the betting ring and Forbes recently compiled a guide to the best US betting sites — complete with a safety overview.

  • Don’t wager on impulse. Avoid gambling operators you encounter via pop-up ads, texts, and emails. If it sounds too good to be true, chances are that it is.

  • Read your terms of agreement. Before you commit to a sportsbook — and before you place a bet with one — read the fine print around signing offers and membership. Like streaming apps, incentives might last only during a trial period. Also, in some cases, even reputable sportsbooks can freeze your winnings if they deem you had an unfair advantage. Just what that may be? It’s spelled out in your agreement.    

What to do if a sportsbook scams me

“How can we help?” Allstate Identity Protection’s Brian Stuart asks. “It usually depends on if the betting account is owned by the victim or not. If the victim falls for a scam and loses funds, they will likely need to dispute directly with that entity.”

“However,” Stuart continued, “if a fraudster opens an account with DraftKings or FanDuel using a victim’s personal information, we can usually help resolve the matter since that would be considered account takeover.”

As an Allstate Identity Protection member, you can bet we'll continue to keep you informed about trending scams like this.