How to Get a Sports Betting License in the USA: A State-by-State Guide (2025)

The U.S. sports betting market is booming, with revenues projected to exceed $10 billion by 2025. However, navigating the complex web of state-specific licensing requirements can feel overwhelming for new operators. Whether you’re launching a sportsbook platform or expanding into new markets, obtaining the right license is critical to your success—and compliance.

At Sports Betting Soft, we’ve helped dozens of businesses secure sports betting licenses across the USA. In this **comprehensive guide**, we break down the licensing process for all 50 states, including fees, timelines, and key challenges. Let’s dive in!

 

Why Licensing Matters in the U.S. Sports Betting Industry

Sports betting is regulated at the state level in the USA, meaning each state sets its own rules, fees, and requirements. Operating without a license can lead to:

• Hefty fines (up to $500,000 in some states)
• Legal penalties, including criminal charges
• Permanent bans from operating in the state

Key Federal Laws to Know:

• PASPA (1992):

  Overturned in 2018, this law previously banned sports betting nationwide. Its repeal opened the door for states to legalize sports betting.

• Wire Act (1961):

  Restricts interstate betting, meaning operators must comply with each state’s laws individually.

 

Types of Sports Betting Licenses in the USA

Most states offer two primary license types:

1. Operator License:

   Allows you to run a sportsbook (online or retail).

2. Vendor License:

   Required for businesses providing software, odds, or other services to operators.

 

General Steps to Get a Sports Betting License

While requirements vary by state, most follow this process:

1. Submit an application to the state’s gaming commission.
2. Pay non-refundable application fees (ranging from $10,000 to $1 million).
3. Pass background checks for all stakeholders.
4. Demonstrate financial stability (e.g., proof of funds).
5. Implement responsible gambling measures.

 

State-by-State Licensing Guide

Northeast States

1. New Jersey

• Licensing Authority:

  New Jersey Division of Gaming Enforcement (NJDGE)

• Key Requirements:

  • Application fee: $100,000 (operator), $20,000 (vendor)
  • Annual license fee: $500,000
  • Must partner with a land-based casino

• Timeline:

  6-12 months

2. Pennsylvania

• Licensing Authority:

  Pennsylvania Gaming Control Board (PGCB)

• Key Requirements:

  • Application fee: $250,000
  • Annual license fee: $10 million
  • Must pay a 36% tax on gross revenue

• Challenges:

  High costs make this state ideal for established operators.

3. New York

• Licensing Authority:

  New York State Gaming Commission

• Key Requirements:

  • 1.Application fee: $1 million
  • 2.Tax rate: 51% on gross revenue
  • 3.Must partner with a land-based casino

• Timeline:

  12-18 months

 

Midwest States

4. Illinois

• Licensing Authority:

  Illinois Gaming Board

• Key Requirements:

  • 1.Application fee: $250,000
  • 2.Annual license fee: $1 million
  • 3.In-person registration required for online betting

• Challenges:

  Strict “bad actor” clauses for past violations.

5. Michigan

• Licensing Authority:

  Michigan Gaming Control Board (MGCB)

• Key Requirements:

  • 1.Application fee: $50,000
  • 2.Annual license fee: $100,000
  • 3.Must pay 8.4% tax on online revenue

• Timeline:

  6-9 months

6. Ohio

• Licensing Authority:

  Ohio Casino Control Commission

• Key Requirements:

  • 1.Application fee: $100,000
  • 2.Annual license fee: $1 million
  • 3.Must partner with a pro sports team or casino

• Challenges:

  Limited licenses available (40 total).

 

Why Partner with Sports Betting Soft?

• Licensing Expertise:

  We’ve helped clients secure licenses in 15+ states.

• Regulatory Compliance:

  Our platforms meet all state-specific requirements.

• Turnkey Solutions:

  From application to launch, we handle the heavy lifting.

 

Southern States

7. Florida

• Licensing Authority:

  Florida Gaming Control Commission (FGCC)

• Key Requirements:

  • 1.Application fee: $500,000
  • 2.Annual license fee: $2 million
  • 3.Exclusive partnership with Seminole Tribe required for online betting

• Challenges:

  Legal battles over tribal exclusivity may delay approvals.

8. Texas

• Licensing Authority:

  Texas Lottery Commission (Pending Legislation)

• Key Requirements:

  • 1.Sports betting is not yet legal (as of 2024).
  • 2.Pending bills propose $500,000 application fees and 10% tax rates.

• Challenges:

  Strong opposition from conservative lawmakers delays legalization.

9. Tennessee

• Licensing Authority:

  Tennessee Sports Wagering Advisory Council (SWAC)

• Key Requirements:

  • 1.Application fee: $50,000
  • 2.Annual license fee: $750,000
  • 3.Online-only licenses (no retail partnerships required)

• Timeline:

  4-6 months

 

Western States

10. Nevada

• Licensing Authority:

  Nevada Gaming Control Board (NGCB)

• Key Requirements:

  • 1.Application fee: $250,000
  • 2.Annual license fee: $500,000
  • 3.Must partner with a land-based casino

• Challenges:

  High competition in the mature Las Vegas market.

11. California

• Licensing Authority:

  California Gambling Control Commission (Pending Legislation)

• Key Requirements:

  • 1.Sports betting is not yet legal (as of 2024).
  • 2.Pending ballot measures propose $1 million fees and 15% tax rates.

• Challenges:

  Tribal casinos and commercial operators clash over legalization terms.

12. Colorado

• Licensing Authority:

  Colorado Division of Gaming

• Key Requirements:

  • 1.Application fee: $125,000
  • 2.Annual license fee: $125,000
  • 3.10% tax on net sports betting revenue

• Timeline:

  6-8 months

13. Arizona

• Licensing Authority:

  Arizona Department of Gaming

• Key Requirements:

  • 1.Application fee: $100,000
  • 2.Annual license fee: $150,000
  • 3.Must partner with a sports team or tribal casino

• Challenges:

  Limited to 20 operator licenses.

 

States Where Sports Betting is Illegal (2024)

• Alabama
• Alaska
• Georgia
• Idaho
• Minnesota
• Missouri
• South Carolina
• Utah

 

Key Takeaways for Operators

1. Costs Vary Widely:

   Fees range from $50,000 (Michigan) to $10 million (Pennsylvania).

2. Timelines Matter:

   Plan for 6-18 months to secure a license.

3. Partnerships Are Key:

   Many states require ties to casinos, tribes, or sports teams.

4. Tax Rates Impact Profitability:

   New York (51%) and Pennsylvania (36%) have the highest rates.

 

FAQs

• Q1: What is the best platform to develop a sports betting app?

  The best platform to develop a sports betting app depends on your target audience and budget. Popular options include iOS, Android, and cross-platform frameworks like React Native or Flutter. For scalability and performance, many operators choose native development paired with cloud-based backend solutions.

• Q2: How much does a sports betting license cost in the USA?

  License costs vary widely by state, ranging from $50,000 (Michigan) to $10 million (Pennsylvania). Additional fees like application charges, annual renewals, and taxes also apply. Always budget for compliance audits and legal consultations.

• Q3: How long does it take to get a sports betting license?

  The licensing process typically takes 6-18 months, depending on the state’s regulatory complexity, background checks, and partnership requirements (e.g., ties to land-based casinos).

• Q4: Can I operate a sportsbook without a license?

  No. Operating without a license can result in fines up to $500,000, criminal charges, and permanent bans. Always comply with state and federal regulations.

• Q5: What are the key features of a successful sportsbook platform?

  Essential features include live betting, secure payment gateways (credit cards, e-wallets, crypto), mobile optimization, AI-driven odds, responsible gambling tools, and real-time analytics.

• Q6: Is a vendor license required for sportsbook software providers?

  Yes. Most states require vendors providing odds, software, or payment solutions to obtain a separate license. Fees range from $10,000 to $250,000 annually.

• Q7: What states have the highest tax rates for sportsbooks?

  New York (51%), Pennsylvania (36%), and New Hampshire (51%) have the highest tax rates. Consider these costs when planning profitability.

• Q8: Can I use a white-label solution to launch faster?

  Yes. White-label platforms like those offered by Sports Betting Soft allow you to launch in weeks, with pre-built features and compliance frameworks. Customization options are available to match your brand.

• Q9: How do I handle geolocation compliance?

  Use geofencing technology to ensure users are within state borders. Partner with certified providers like GeoComply to meet regulatory standards.

• Q10: What is a “bad actor” clause in licensing?

  Some states (e.g., Illinois) prohibit operators with past violations (e.g., operating illegally) from obtaining licenses. Always disclose historical operations during applications.

• Q11: How do I ensure responsible gambling compliance?

  Implement tools like deposit limits, self-exclusion options, and reality checks. Most states mandate these features to protect users.

• Q12: Can I operate in multiple states with one license?

  No. The Wire Act requires separate licenses for each state. However, partnering with a multi-state compliance expert can streamline the process.

 

Why Partner with Sports Betting Soft?

• Licensing Expertise:

  We’ve helped clients secure licenses in 15+ states.

• Regulatory Compliance:

  Our platforms meet all state-specific requirements.

• Turnkey Solutions:

  From application to launch, we handle the heavy lifting.

 

Conclusion

Navigating the U.S. sports betting licensing landscape is complex, but with the right partner, it’s manageable. By understanding state-specific requirements, fees, and timelines, you can avoid costly mistakes and position your business for success in this booming industry.

At Sports Betting Soft, we specialize in helping operators secure licenses and launch compliant platforms. Contact us today to streamline your licensing process and enter the market with confidence.

 

Ready to get licensed? Visit Sports Betting Soft or reach out to our team for a personalized consultation. Let’s turn your sportsbook vision into reality!