Is Peer to Peer Betting Legal in the United States?

The rise of sports betting from being run by local bookies to a multi-billion dollar industry made up of publicly traded behemoths has been stunning. Now, many involved with or interested in online sportsbooks are wondering what will be the next big thing.

One contender is peer to peer (p2p) betting through formalized apps. Though only formally legal in New Jersey, p2p wagering may become popular, especially amongst recreational sports bettors.

What is Peer to Peer Betting?

While the name peer to peer betting seems to indicate any type of wager amongst friends, formal applications of p2p betting focus on sports and event betting. While wagering $5 that you can throw a ball farther than your buddy is a form of peer to peer betting, in the real money online casino sense, peer to peer betting is all about maximizing your odds.

Instead of betting on who can throw further or jump higher, formal peer to peer betting interfaces take the idea of betting $10 on the game with the person sitting next to you at the bar and expand it to a wider pool of potential opponents.

On a basic level, p2p betting allows a bettor to establish the odds for an event they are interested in wagering on. Essentially, through peer to peer betting, everyone can be their own bookie. It only takes one other bettor, using the same clearinghouse, to accept your terms and agree to the wager.

Why is Peer to Peer Betting Popular?

For one, you get to choose the odds you are comfortable wagering on. Don’t like the Cowboys being 5.5 point favorites? Using peer to peer betting, you can offer to take a bet on the Cowboys, but only as 4.5 point favorites. 

On a typical sports betting app, you need to ‘pay’ for the extra point by adjusting your odds. If the Cowboys -5.5 are offered at -110 by the book, buying the point down to -4.5 might give you odds of -140. That adjustment could cost you big time.

With a peer to peer betting app, you can state you’ll only bet the Cowboys -4.5 at, say, -120. If another bettor likes the odds, they agree to your wager and the two of you watch the Cowboys game in earnest.

What is the Value of Peer to Peer Betting?

Betting odds.

It can be difficult to understand why someone would agree to give you -120 odds on the Cowboys at -4.5 when they could use a sportsbook to receive better odds. The answer lies in cutting out the middleman, in this case, the bookie.

Peer 2 peer betting apps theoretically have lower transaction costs than traditional sportsbooks. Instead of taking “juice,” like a bookie, p2p apps only take a percentage of the total wager for convenience of betting. 

Unlike a traditional online casino sportsbook, the p2p app is not involved in setting the line or researching what odds to offer. Instead, they merely market potential wagers, collect the money and hold it in a form of escrow while the bet is pending, and pay out the winner. For this, they remove a percentage of the amount bet. Currently, peer to peer apps are also offering exceptional online casino bonus terms for new players, making it even more attractive.

Depending on the odds agreed upon, the percentage paid to the p2p app can be far lower than the amount you would lose to a sportsbook in juice or vig. Though you may not find an online casino no-deposit bonus (because you need to have some skin in the game), it may make financial and risk sense to wager on a p2p platform instead of a traditional sportsbook.

What Can Peer to Peer Betting Be Used For?

Sports betting has exploded into a $104 billion worldwide industry, and America is quickly catching up to the much more mature overseas betting markets. While the United States online casino industry lags behind online sportsbooks, p2p betting offers a way for online casinos to catch up.

Peer to peer betting is typically reserved for sports and event wagering. So far, it does not really make sense to have peers betting on – for example — a hand of blackjack or roll of the roulette wheel.

However, modifying odds on a sporting event or betting on the outcome of a specific event, such as who wins an Oscar or what team will win an eSports tournament, is perfect for p2p. Many observers believe p2p betting is ripe for expansion in the eSports world, or other niche events that may not be profitable for huge sportsbooks to set a line on. 

Because it only takes finding one other person who wants to take the other side of your wager, peer to peer betting platforms can quickly scale up to accept bets on even the most obscure games or events.

Why is Gambling in the US so Tightly Regulated?

For decades, sports betting in the U.S. was limited to Nevada or shady, neighborhood bookmakers. While some states allowed long-shot parlays, true spread betting on football or baseball was limited to Las Vegas or Reno.

Because of America’s puritanical history and engrained political social conservatism, gambling was often viewed as a source of sin, crime, or poverty. In 1992, Congress passed PASPA, which formally limited legalized sports betting to Nevada and “sports lotteries” in Montana, Delaware, and Oregon. 

After decades of artificially depressing the American sports betting market, the Supreme Court invalidated PASPA in 2018. This led to a boom in safe online gambling sites and especially regulated sportsbooks. 

Now, the next iteration of online betting is arriving in the form of peer 2 peer betting platforms. Likely, as the p2p apps evolve, they will use blockchain technology to seamlessly integrate verification and cryptocurrencies into core performance. 

As more states loosen their gambling laws and embrace sports and event wagering as a major source of income, p2p betting may become commonplace. However, it is unclear whether states will join multi-state peer 2 peer betting pools, as some states have, to grow their online poker marketplaces. The more potential players able to use a p2p app, the easier it will be to find a wager that suits you.