Side note on that: Every time an Illinois team is playing for a championship the governor generally has a much publicized bet with the governor of the opponent's state (the most recent I can remember is the Bears v. Colts Superbowl). I always wish for the police to arrest and charge him as an example of the hypocrisy.
Is it possible that it's only illegal to wager cash
on such events? I noticed that when opposing mayors wager, the stakes are always something other than cash, such as wearing the winning team's jersey to a council meeting, or sending him a box of whatever the local culinary treat is. Is it possible that such wagers are a way to legally skirt the prohibition? Is the law written in such a way that it only applies when actual cash changes hands?
It could be. But in general in the US cash is not a stipulation. Usually things are illegal based on an exchange of "value" although I'm sure this could vary by state. As far as I am aware gambling is legal in Arizona as long as the house gets no take. In other words, casual football pools and even poker games for high stakes are legal. These days there are so many Indian casinos that any other gambling operation would be either so minor as to not be an enforcement concern or would be technically legal because there is no take (pool tournaments for example).
Bear in mind BP hails from Al Capone land. A lot of laws were enacted to go after speakeasys that have never been repealed.
Arizona is close to Vegas. Anyone who seriously wants to gamble goes there. Yet Arizona's senators and congressmen get big money from Vegas casinos to keep people from gambling locally on a commercial scale. Yet casual gambling is common there and as far as I know, legal.