With Super Bowl weekend in Las Vegas just around the corner, betting activity is reaching one the high points of the year. Nearly 68 million adults plan to bet on this year’s Super Bowl, an increase of 35% over last year, according to the American Gaming Association.

Super Bowl LVIII is generating an unprecedented interest in “novelty wagers” unrelated to the game, but related to Taylor Swift’s expected appearance.

But Super Bowl LVIII is not only notable for the matchup between the San Francisco 49ers and the Kansas City Chiefs. This year, there is unprecedented crossover interest due to pop star Taylor Swift’s much-publicized romantic involvement with Chiefs’ tight end Travis Kelce. Ms. Swift’s appearances at the Chiefs’ games throughout the regular season have generated a profound interest in the NFL from a younger female demographic that does not normally consume professional football (but does consume Ms. Swift’s music). In the betting world, this demographic convergence has also created an unprecedented interest in placing non-traditional “novelty bets” on Ms. Swift that are completely unrelated to the actual football game.

Unfortunately, if you want to bet on the outfit that Ms. Swift will wear, the color of her lipstick, or whether she will cry if the Chiefs lose, your options are limited. Due to state licensing rules, traditional physical sports books only allow action directly related to the football game. Online sports books that are available in a handful of states like New Jersey and Michigan likewise do not offer “novelty bets” on either Ms. Swift or anything else not directly related to the game (like the length of the national anthem).

Offshore betting options may be risky (or even illegal) for U.S. customers.

So are there options for customers interested in placing a $5 bet on over/under of how many times Ms. Swift will be shown on TV? The New York Times article cites to foreign websites Betonline.ag (an online gambling website based and licensed in Panama) and Betus.com (based in Costa Rica and licensed in Curacao) as examples of websites willing to take Taylor Swift-related wagers. However, their legality is uncertain at best. It is unclear how (or if) they comply with U.S. law and whether there are limitations or costs associated with payments going to and coming from abroad. As just one potential obstacle, the federal Unlawful Internet Gambling Enforcement Act of 2006 prohibits businesses from accepting payments in connection with unlawful internet gambling. Additionally, the federal Wire Act separately prohibits persons engaged in the business of betting or wagering from using a wire communication facility for the transmission in interstate or foreign commerce of bets or wagers or information assisting in the placing of bets or wagers on any sporting event or contest.

The emerging peer-to-peer model may offer a solution to limited U.S.-based “novelty bet” options.

One alternative emerging model to the traditional sports book is peer-to-peer social betting or P2P. The P2P model is related to European-style exchange betting and essentially eliminates the centralized sports book in favor of direct, player-to-player wagers. Instead of betting against the house and paying an integrated “vig” or “juice,” players propose or accept various bets from other users in the marketplace. Bets on P2P applications are fully customizable and allow players to use their relative skills (like sports knowledge, data analysis, and mathematics) to compete.

The customization aspect would technically allow for Taylor Swift-esqe novelty wagers that could not be offered by a traditional sports book. Certain topics are generally off-limits as a matter of either state or federal law – betting on elections, the stock market, and price of commodities is either expressly prohibited or already regulated by financial authorities. But entertainment prop bets are just one example of exciting possibilities with customizable peer-to-peer gaming. Another emerging trend is betting on actual skill contests in real-time – whether skateboarding or golf. P2P is no different than engaging with your friends, coworkers, or peers and making wagers in real life, except that the use of the internet (or apps) expands the potential social pool, helps keep track and organize multiple wagers, and ensures prompt wager settlement.

P2P is innovation that offers some of the same availability and skill-based advantages as DFS did when it first came out as a sports book alternative.

Peer-to-peer is a relative newcomer to the wagering markets dominated by licensed sports books and fantasy sports giants like DraftKings and FanDuel. Consequentially, much like fantasy sports around 2015 and 2016, the legality of P2P is being debated. When Daily Fantasy Sports (“DFS”) boomed and became a prevalent skill-based alternative to traditional sports betting, DFS offered many of the same advantages that peer-to-peer operators offer today – wider availability and skill-based gameplay for starters.

Accordingly, peer-to-peer or P2P wagering is an innovative, novel model that relies on the skill-based gaming argument, the social aspect, and the decentralized marketplace approach that removes the operators from the “business of betting or wagering.” Certainly peer-to-peer innovation can offer advantages to customers who are looking for a creative approach to a saturated traditional betting market, lower fees, and more gameplay options. And more “fun.” Betting on Taylor Swift at the Super Bowl without having to engage with an offshore website is just one of the exciting opportunities that might merit a look at a peer-to-peer operator in the United States.

Are you looking to launch your next gaming project? Do you need a legal opinion? The qualified and specialized attorneys of Artaev at Law stand ready to help.

Disclaimer: This article is not intended to be and does not constitute legal advice. It is for informative and promotional purposes only. Do not take any action or refrain from taking any action based on this guide, and always consult with a qualified professional about the circumstances of your particular case. Each set of facts is unique and different circumstances apply to each individual business. The field of peer-to-peer betting and non-sports event wagering is novel and complex. Artaev at Law PLLC and its lawyers do not and cannot endorse the legality of any particular model, as each factual circumstance is unique and the application of the law remains unsettled in this emerging area.

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