Key Takeaways

  • A wager is a bet: staking money or something of value on an uncertain event with a winner and loser depending on the outcome.
  • Wagers are legal only when they involve valid consent, equal bargaining, lawful subject matter, and do not violate public policy.
  • Certain wagers are always prohibited, including those tied to elections, marriage restraints, indecent matters, or speculative legal questions.
  • Even legal wagers face limits—such as the authority of stakeholders and rules for recovering stakes when contracts are void.
  • U.S. law provides statutory definitions of wagers, clarifying what counts as gambling versus exempt activities (like securities trades, insurance, or fantasy sports).
  • States may refine the wager definition (e.g., Nevada statutes on gaming), and federal law outlines what transactions fall inside or outside the scope of gambling regulation.

A wager is a bet; a contract by which two parties or more agree that a certain sum of money, or other thing, shall be paid or delivered to one of them, on the happening or not happening of an uncertain event.

When Are Wagers Allowed by Law?

The law does not prohibit all wagers.

To restrain wagers within the bounds of justice the following conditions must be observed:

  1. Each of the parties must have the right to dispose of the thing which is the object of the wager.
  2. Each must give a perfect and full consent to the contract.
  3. There must he equality between the parties.
  4. There must be good faith between them.
  5. The wager must not be forbidden by law. In general, it seems that a wager is legal and maybe enforced in a court of law, if it be not:
    1. Contrary to public policy, or immoral; or if it do not in some other respect tend to the detriment of the public.
    2. If it do not affect the interest, feelings, or character of a third person.

Statutory Definitions of Wager

Modern statutes provide clarity on the scope of the term wager. Under U.S. federal law, a wager includes staking money or value on contests, sporting events, or games of chance, and extends to lottery tickets or similar chance-based schemes. It does not include securities transactions, insurance contracts, indemnity agreements, or activities regulated under the Commodity Exchange Act.

Nevada law, as an example, defines a wager in the gaming context as an agreement where parties stake something of value on a chance outcome, with one party winning and another losing depending on the event. These statutory definitions help courts and regulators distinguish between lawful investments or contracts and gambling transactions.

When Are Wagers Prohibited by Law?

Wagers on the event of an election laid before the poll is open or after it is closed are unlawful. And wagers are against public policy if they are in restraint of marriage made as to the mode of playing an illegal game or on an abstract speculative question of law or judicial practice, not arising out of circumstances in which the parties have a real interest.

Wagers as to the sex of an individual or whether an unmarried woman had borne or would have a child are illegal; as unnecessarily leading to painful and indecent considerations. The supreme court of Pennsylvania have laid it down as a rule, that every bet about the age, or height, or weight, or wealth, or circumstances, or situation of any person, is illegal; and this whether the subject of the bet be man, woman, or child, married or single, native or foreigner, in this country or abroad. And it seems that a wager between two coach-proprietors, whether or not a particular person would go by one of their coaches is illegal, as exposing that person to inconvenience.

Public Policy and Gambling Regulation

Beyond the traditional prohibitions on immoral or indecent wagers, governments also regulate gambling through statutes. For instance, the federal Unlawful Internet Gambling Enforcement Act defines "bet or wager" to cover internet-based gambling transactions while exempting regulated markets like securities and commodities.

States enforce their own restrictions, such as licensing requirements for casinos or sports betting operators. Activities falling outside these legal frameworks—like private betting pools or unlicensed online platforms—are typically considered unlawful wagers.

This statutory overlay ensures that gambling remains within controlled environments designed to protect consumers and prevent fraud or exploitation.

What Limitations Apply to Legal Wagers?

In the case even of a legal wager, the authority of a stakeholder, like that of an arbitrator, may be rescinded by either party before the event happens. And if after his authority has been countermanded, and the stake has been demanded, he refuse to deliver it, trover or assumpsit for money had and received is maintainable. And where the wager is in its nature illegal, the stake may be recovered, even after the event, on demand made before it has been paid over.

Wagers in Modern Practice

In practice, the wager definition applies not only to classic bets between individuals but also to regulated industries. Common examples include:

  • Casino and Sports Bets: Placing chips, tickets, or money on the outcome of a game or sporting event.
  • Lotteries and Raffles: Buying a ticket for a chance at a prize.
  • Online Gambling: Wagers made via internet platforms, often subject to federal and state regulation.
  • Fantasy Sports: In some cases, exempted from the legal definition of gambling if structured with clear, skill-based elements.

These examples illustrate how the same legal principles apply across evolving forms of gaming. Even where wagers are lawful, courts continue to enforce restrictions tied to fairness, good faith, and statutory compliance.

Frequently Asked Questions

1. What is the basic legal definition of a wager?

A wager is a contract where parties agree to stake money or value on the outcome of an uncertain event, with one winning and the other losing.

2. Are wagers always considered gambling?

Not always. Some contracts that resemble wagers—like insurance or securities trades—are specifically excluded from gambling laws under federal statutes.

3. Can wagers ever be enforced in court?

Yes, if the wager is lawful, involves full consent, equal standing, and does not violate public policy, courts may enforce it.

4. What are examples of unlawful wagers?

Wagers on elections, restraints on marriage, indecent personal matters, or speculative legal questions are prohibited.

5. How do modern gambling laws affect wagers?

Statutes like the Unlawful Internet Gambling Enforcement Act and state gaming codes define what counts as a wager and regulate how it may be conducted, particularly for online and casino-based gambling.

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