The US Needs to Establish Where a Mobile Wager Takes Place

Mobile sports betting in the US has changed a lot since PASPA was overturned, but one crucial question remains unanswered.

Where does the act of online sports betting actually take place?

This question has been at the center of sports betting lawsuits across the US and has spilled into the new prediction market industry. The US Supreme Court refused to decide during a lawsuit against Florida’s gaming compact a few years ago, but new pressure could force it to review the issue in 2026.

Colorado Tribes Look to Offer Mobile Sportsbook

One lawsuit that could soon find its way to the nation’s highest court comes from Colorado. A pair of Ute Tribes filed a lawsuit against the state, claiming it was violating the Indian Gaming Regulatory Act (IGRA). They argue that since the servers for their sportsbooks would be hosted on tribal land, it would be protected under IGRA. 

This is the same argument successfully used by the Seminole Tribe in Florida.

The court ruled that the act of mobile sports betting takes place where the bettor is located. Since the vast majority of wagers would be placed off tribal lands, mobile betting doesn’t qualify for IGRA protections.

The tribes elevated their case to an appellate court this week, bringing them a step closer to the US Supreme Court. 

Argument Impacting Prediction Markets

The sports betting industry isn’t the only one looking to establish where a mobile bet actually takes place. 

Kalshi, a leading prediction market operator, has been facing lawsuits from tribes and states seeking to push it out. The operator is successfully arguing that since its servers aren’t located in states without legal gambling, it can operate in all US markets. 

These lawsuits are expected to ultimately reach the US Supreme Court, which will be required to make a ruling that could potentially devastate an entire industry. 

Supreme Court Failed With Florida Case

In 2017, the US Supreme Court decided against taking on a case challenging Florida’s expanded gaming compact. 

The state had awarded the Seminole Tribe sole control over mobile sports betting. They were able to avoid passing new laws by establishing that the sports betting occurred where the sportsbook’s servers are located. This allowed them to legalize sports betting under IGRA, cutting out commercial operators.

Lawsuits over the controversial compact went all the way up the federal and state court systems, ultimately leading to the Supreme Court. Unfortunately, they decided against hearing the argument and setting a legal precedent for the country’s sports betting industry.