What you still can't do, though, is bet on sports. Not unless you live in Delaware, Montana, Nevada, Oregon or, as of recently, maybe, New Jersey. According to the 1992 Professional and Amateur Sports Protection Act (PASPA), betting on collegiate and professional games is forever limited to those few states. You also can't bet online. Not since the 2006 passage of the Unlawful Internet Gambling Enforcement Act, which prohibits online businesses from “accepting payments in connection with the participation of another person in a bet or wager.” In five states, you can't even legally play fantasy sports.

That may seem like a contradiction. As gambling in the physical world has grown more popular, why has online betting remained so restricted? Simple: money. Owners of real-world casinos have a vested interest in restricting how and where people can bet. In Arizona, for instance, the tribal casino lobby played a huge role in defeating a bill earlier this year that would have legalized fantasy sports.

Even so, America might be headed for a future more like Ireland or the UK, where betting parlors dot the streets and people can legally wager on practically anything—even, say, the next Royal baby name. The change may be coming about because of the enormous popularity of fantasy sports—played by an estimated 41 million people in the U.S. and Canada in 2014, up nearly 25% since 2010—and more specifically, an elegant little innovation in fantasy sports called single-day play.

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In standard fantasy sports, players draft a team at the start of the season and follow that roster all year. Winning demands a huge investment of time, and the competition takes an entire season. So, for most who play, fantasy functions just as a hobby and form of community—an excuse to follow the game and talk smack with friends. The trophy matters more than the money.

Not so with daily play. Users can draft a new lineup whenever there's a new slate of games. The time commitment is small, the results are immediate, and the payoffs can be huge. That's why daily play is booming—and why the game could change the way Americans bet.

To understand the rise of single-day fantasy, you need to go back to April 15, 2011. That’s when the Justice Department shut down three of the web's biggest gaming websites—Full Tilt Poker, PokerStars, and Absolute Poker—seizing their domain names, freezing all user accounts, and filing a $3 billion civil suit against the companies. Online poker players almost universally refer to it as “Black Friday.”

In the wake of the crackdown, a generation who came of age during the Great Poker Boom of the 2000s was suddenly left without a place to play. Black Friday, in effect, left a huge pool of money floating around, waiting to be wagered. Single-day fantasy sports created a place for that money to land, says Marc Edelman, a law professor at Baruch College who writes extensively on gaming issues as a columnist for Forbes.com.