Linda,
Booking is illegal; betting is not, depending on the circumstances. Otherwise, you could get arrested for betting someone $1 about anything, sports related or not.
Sportsbooks are free to operate on the internet, just as long as their base of operations is not in the U.S. I know a few that operate out of Costa Rica. If, however, the books were found to be on American soil, that would be a problem.
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