What Happens To Bets If You Travel To A State Where Gambling Is Illegal?

Thanks to the 2018 Supreme Court's decision in Murphy v. NCAA, which put an end to the Professional and Amateur Sports Protection Act (PASPA), each state in the U.S. can call the shots on their own sports betting laws. This is why 38 states plus Washington DC legalize sports betting with two hold-outs; California and Texas, declining the practice. In total, 48 states permit gambling activities including Mega Millions. Hawaii and Utah enforce a total ban on all forms of gambling.

Then there are states that only allow one or two forms of gambling: Georgia allows lotteries and charitable bingo; Tennessee permits online sports betting with no land-based casinos; and Alaska offers bingo and pull-tab games along with some forms of tribal gaming. Given this wide (and admittedly confusing) range of gambling laws, it is no surprise that you might run into trouble at some point.

You could place a bet in one state, and then cross into another where gambling is off-limits. You could also travel to a state that allows some form of gambling, but bans the specific activity you prefer to bet on, even with the others up and running. What do you do then?

As a general rule, a legal bet placed in a gambling-approved state is valid, even in a state with zero tolerance. This is because most online betting platforms examine the legality of a bet, based on the IP of the location where it was placed. To you, it means if you place a bet on horse racing in New Jersey, it doesn't stop being legal when you head over to Utah.

Don't ride into the sunset just yet. While your bets remain secure, access to them while in a state where gambling is restricted poses problems. As a common practice, betting platforms track your location to verify individuals they provide services to are within legal boundaries. The moment you cross into a state where gambling is banned, you trigger a restricted access to betting activities, which ultimately affects your account and limits withdrawal options. It is not by choice but law — Interstate Wire Act of 1961 and the Unlawful Internet Gambling Enforcement Act of 2006.

Some states also subject gambling to diverse state and federal taxes. Remember, all gambling winnings are taxable income, and casinos withhold 24% of your win for taxes. States impose a flat tax rate or based on the amount won. As a gambler, you may face complex tax issues such as needing to file multiple tax returns if you live in one state but win in another. Ask a tax professional for guidance.

There are a few ways to prevent issues of access to your winnings or account bans, or paying multiple sums to the Internal Revenue Service (IRS). It begins with how you plan. You should time your bets around your schedule. For example, if you're heading to Georgia for a month to explore its fantastic aerospace manufacturing, hold off on new bets until your return. If that doesn't work, pause your travel plans until the results of your bets are in, and then you can cash out your winnings before you cross into a state with gambling bans. Such an approach ensures access to your funds and skips any location-based blockers on your withdrawals.

If you did not foresee winning before crossing into a state that prohibits gambling, do not withdraw what you win until you return to the state your bet was placed, or in a state with no prohibition. The specifics for how long you can do this vary by platform, but it is a general rule that so long as your account is active and in good standing, your winning will always be available on demand. For further questions, head to the user agreement, the FAQ section or call the Support of your preferred gambling site. By heeding these tips, affected persons can relax, knowing their accounts and winnings are secure, even while moving across states with differing gambling laws.