Sports Betting Bonus Restrictions by State: Legal vs Banned Promos

When states legalize sports betting, they do not just decide whether you can place a wager. They also set rules around how sportsbooks can attract and retain customers through promotional offers. Sports betting bonus restrictions vary dramatically from state to state, affecting everything from sign-up bonuses to deposit matches to the language operators can use when advertising deals.

Understanding these restrictions matters if you are comparing sportsbook offers across state lines or wondering why the same operator offers a different welcome bonus depending on where you live. This guide breaks down which states restrict or ban certain bonus types, why regulators cracked down on promotional language, and what it all means for your bottom line as a bettor.

For a full overview of where sports betting is legal across the country, see our complete guide to US sports betting laws by state.

What Are Sports Betting Bonus Restrictions?

Sports betting bonus restrictions are state-imposed limits on the promotional offers that licensed sportsbooks can extend to bettors. These restrictions cover several categories of promotions.

Sign-up bonuses are the welcome offers new customers receive when creating an account, such as a deposit match or bonus bet credit. Deposit matches give bettors additional funds based on a percentage of their initial deposit. Bonus bets (formerly called "risk-free" bets in many markets) provide a second-chance wager if an initial bet loses. Referral bonuses reward existing customers for bringing in new users. Ongoing promotions include odds boosts, loyalty programs, and recurring deposit bonuses for existing customers.

States regulate these promotions for several reasons. Consumer protection is the primary driver, as regulators want to ensure bettors are not misled by promotional claims. Problem gambling prevention plays a role because aggressive bonuses can encourage excessive wagering. Revenue considerations also matter, since some states view overly generous promotions as reducing the taxable handle.

States That Ban or Restrict Sign-Up Bonuses

Not all states allow sportsbooks to offer the same promotions. Several states have enacted specific restrictions that limit the types or presentation of bonuses operators can provide.

State	Restriction Type	Details
New York	Tax structure limits	The 51% tax rate on gross gaming revenue means operators have less margin for generous promotions, resulting in smaller bonus offers compared to other states
Ohio	Advertising and bonus restrictions	Strict rules on how bonuses are advertised, including bans on misleading promotional language and requirements for prominent disclosure of all terms
Massachusetts	Promotional advertising limits	Restrictions on bonus advertising that targets young adults, bans on using celebrities popular with minors in promotional campaigns
New Jersey	Bonus term transparency	Requires clear disclosure of wagering requirements, expiration dates, and all conditions attached to promotional offers
Colorado	Promotional language limits	Among the first states to ban "risk-free" bet language, requires responsible gambling messaging alongside all promotional offers
Maryland	Vulnerable population protections	Restricts promotional targeting toward vulnerable populations and requires responsible gambling disclaimers in all bonus advertising

The specifics of each state's approach depend on its regulatory framework and priorities. Some states focus primarily on advertising language, while others build restrictions into their tax and licensing structures. The result is a landscape where two neighboring states can have vastly different promotional environments despite both having legal sports betting.

It is also worth noting that these restrictions evolve. States regularly revisit their sports betting regulations based on market data, consumer complaints, and lessons learned from other jurisdictions. A state that launched with permissive bonus rules may tighten them after observing issues, while restrictive states may loosen requirements as the market matures. To check what restrictions currently apply where you live, review our state-specific legal guides for detailed breakdowns.

States with Permissive Bonus Rules

While some states take a restrictive approach, others allow sportsbooks broad latitude in offering promotional deals. These states generally still require operators to follow truth-in-advertising standards and include responsible gambling messaging, but they place fewer direct limits on bonus structure and size.

State	What is Allowed	Notable Rules
Illinois	Most bonus types permitted	Must disclose terms clearly; operators pay tax on promotional bets
Pennsylvania	Generous welcome offers common	Promotional credits are taxable for operators; full transparency required
Michigan	Wide range of bonus types	Standard responsible gambling messaging required; relatively operator-friendly
Arizona	Standard promotional offers	Must comply with advertising standards; fewer specific bonus restrictions

Even in permissive states, "permissive" does not mean unregulated. Sportsbooks still need to follow state advertising rules and provide full disclosure on every promotional offer. The difference is in how tightly the state restricts the structure, size, and marketing of those offers.

The Risk-Free Bet Crackdown

One of the most significant shifts in sports betting bonus restrictions was the nationwide move away from "risk-free" bet language. For years after legalization, sportsbooks heavily promoted "risk-free" first bets, sometimes offering up to $1,000 or more. The problem was that these bets were not actually risk-free. If the initial wager lost, bettors received bonus credits with wagering requirements rather than cash back.

Starting in 2023, multiple states began banning the "risk-free" label. Colorado was among the first to take action, followed by New York, Ohio, Massachusetts, and others. State attorneys general argued that the term was inherently misleading because bettors still risked losing their initial cash deposit.

The industry responded by rebranding these offers. "Risk-free bets" became "bonus bets," "first bet insurance," or "bet and get" promotions. The underlying mechanics often remained similar, but the language became more transparent. If your first bet loses, you receive a bonus bet credit rather than cash, and that credit typically must be wagered before any winnings can be withdrawn.

For bettors, the practical impact is straightforward. The offers still exist in most markets, but the terms are now presented more clearly. You should always read the full conditions of any promotional offer before opting in, regardless of what the headline promises.

The crackdown also extended beyond just the "risk-free" label. Several states now require that any promotional advertising clearly state the wagering requirements, specify what happens when a promotional bet loses, disclose the difference between bonus funds and withdrawable cash, and include responsible gambling messaging. This broader push for transparency means that while the flashy headlines have toned down, bettors now have better information to make informed decisions about which offers are genuinely worth pursuing.

How Bonus Restrictions Affect Bettors

The patchwork of state bonus restrictions creates real differences in what bettors can access depending on where they live.

Bettors in heavily restricted states like New York may see smaller welcome bonuses because the high tax rate leaves operators less room for promotions. In contrast, bettors in states like Michigan or Pennsylvania often have access to larger and more varied offers. This is why the same sportsbook might advertise a $1,000 first bet offer in one state and a $200 offer in another. The operator is not being arbitrary; it is responding to different state tax structures and regulatory requirements.

This has practical implications when choosing a sportsbook. Comparing offers across operators within your specific state matters more than comparing headline numbers from national advertising. A $500 bonus with reasonable wagering requirements in your state could be a better deal than a $1,000 bonus you see advertised nationally that comes with restrictive terms.

Bonus restrictions also influence the broader competitive landscape. In states with fewer restrictions, operators compete aggressively on promotions, which can benefit bettors in the short term but may also encourage more impulsive wagering. In states with tighter rules, the competition shifts to product quality, odds pricing, and user experience rather than headline bonus numbers. Neither approach is inherently better for bettors, but understanding the dynamic helps you evaluate offers more realistically.

For detailed comparisons of licensed operators available in your state, visit our sportsbook reviews.

How to Find Available Bonuses in Your State

Finding the right bonus starts with understanding what is actually available where you live. Here is how to navigate the landscape.

First, check sportsbook websites directly for your state. Operators are required to display state-specific promotional terms, so the offer you see after entering your location is the one that applies to you. National advertising may show different numbers.

Second, read the full terms and conditions. Pay attention to wagering requirements (how many times you must bet the bonus amount before withdrawing), expiration dates, minimum odds requirements, and which bet types qualify. These details often matter more than the headline bonus amount.

Third, understand the difference between bonus funds and withdrawable cash. In most states, bonus credits cannot be withdrawn directly. You must wager them according to the stated requirements, and only the resulting winnings become withdrawable.

If you are new to legal sports betting and want guidance on getting started the right way, our guide on how to bet on sports legally walks through the state-by-state requirements.

Frequently Asked Questions

Which states ban sports betting sign-up bonuses?

No state has implemented a complete ban on all sign-up bonuses. However, several states have restricted specific types of bonuses or the language used to promote them. New York's high tax rate effectively limits bonus generosity, Ohio restricts how bonuses are advertised, and Massachusetts limits bonus promotion targeting young adults. The restrictions focus on advertising transparency and consumer protection rather than outright bans on promotional offers.

Why did states ban risk-free bets?

States banned the term "risk-free" because it was misleading. Bettors who used these offers still lost their initial cash deposit when the bet lost. They received bonus credits instead of cash back, and those credits came with wagering requirements. Multiple state attorneys general determined that advertising a bet as "risk-free" when real money was at stake violated consumer protection standards.

Can sportsbooks offer different bonuses in different states?

Yes. Sportsbooks routinely offer different promotional packages in different states based on state tax rates, regulatory restrictions, competitive landscape, and market maturity. The same operator might offer a $1,000 bonus bet in one state and a $200 deposit match in another. This is a direct result of the state-by-state regulatory framework in the US.

Are sports betting bonuses worth it with restrictions?

Bonuses can still provide value even in restricted states, but the key is reading the terms carefully. A smaller bonus with a 1x wagering requirement may be more valuable than a larger bonus with a 10x requirement. Focus on the playthrough conditions, expiration timeline, and eligible bet types rather than the headline number. If the terms are reasonable, bonuses effectively give you additional betting capital at no extra cost.

Do bonus restrictions apply to existing customers or just new sign-ups?

Bonus restrictions apply to all promotional offers, not just welcome bonuses. States that regulate promotional advertising require transparency for ongoing promotions like odds boosts, loyalty rewards, and reload bonuses as well. However, welcome offers tend to receive the most regulatory scrutiny because they involve the largest promotional amounts and the most aggressive advertising.

How do I know what bonuses are available in my state?

The most reliable way is to visit a licensed sportsbook's website and allow it to detect your location. The offers displayed after geolocation verification are the ones available to you under your state's rules. You can also check your state gaming commission's website, which often publishes a list of licensed operators and any relevant promotional restrictions.

What is the difference between a bonus bet and a risk-free bet?

They are functionally the same product with different labeling. A "risk-free" bet was the original marketing term for an offer where bettors received bonus credits if their first wager lost. States banned the "risk-free" label because bettors still lost their real cash deposit. The replacement terms, including "bonus bet" and "first bet insurance," describe the same mechanic with more accurate language. In both cases, if your bet loses, you receive bonus credits that must be wagered before any winnings can be withdrawn.

Will more states restrict sports betting bonuses in the future?

The trend points toward increasing regulation of sports betting promotions. As more states gain experience with legal sports betting, regulators are tightening rules around advertising transparency and consumer protection. States tend to learn from each other's regulatory approaches, so restrictions that prove effective in one market often spread to others. Bettors should expect promotional terms to become more standardized and transparent over time.