Sports betting feels like it’s everywhere.
Ads for online sportsbooks like BetMGM, DraftKings or FanDuel are everywhere, whether on social media or while you’re watching the game, and they all offer a certain amount of free money for your first bet.
You can hear the odds for every contest on the pre-game show or on a sports podcast. You’ll hear about prop bets, like whether LeBron James will be the first player to score for the Lakers against the Warriors on Christmas. And you’ll hear about a risky multi-level bet called a parlay that can turn a $25 bet into $237,553.
Sports gambling’s explosion into the zeitgeist is a result of the Supreme Court’s 2018 reversal of a nationwide ban on competitive sports betting. Since that ruling, sports betting has become legal in 38 states and the District of Columbia, and the American Gambling Association reports that the U.S. sports betting industry will hit an all-time high of $10.92 billion in revenue in 2023. A recent poll conducted by Seton Hall University’s Stillman School of Business found that more than one in three Americans have bet on sports at some point.
For players who retired from professional basketball in the fall, like three-time NBA champion and podcast host Danny Green, it’s become common to hear from bettors upset about losing bets. “They say, ‘You owe me money,’” Green said. Today’s explanation About angry sports bettors sending him messages on social media. “They definitely said, ‘Beep! You know what son! You paid me. “Can’t I just get two more rebounds?”
Superstars like Kevin Durant and Kyrie Irving have also spoken about how legalized sports gambling has changed the relationship between athletes and fans. “Gambling and sports betting have at times completely taken away the purity and fun of the game, I’ll be honest with you,” Irving said on streaming platform Twitch last year.
Bullying doesn’t end in professional sports. The NCAA, which governs college sports, released data this year showing that one in three high-profile college athletes receive abusive messages from someone interested in gambling and that 90 percent of harassment against athletes occurs online through social media. .
Charles Fain Lehman recently wrote about sports betting for The Atlantic, where he argued that legalizing sports betting would be a mistake. With the holidays approaching and many sports games airing on TV, Today’s explanation We reached out to Lehman, who writes primarily about addiction, drugs, and public safety, to ask what’s so bad about legalized sports betting?
A partial transcript of the conversation, edited for length and clarity, follows. Listen to the full conversation on Apple Podcasts, Spotify, or wherever you find podcasts.
Charles, what impact do you think legalized sports gambling is having on our country?
When you do a cost-benefit calculation, gambling looks like any other addictive substance. That is, most people who engage in gambling gain some utilitarian hedonic benefit. They get some fun out of it. And a small percentage of those people will become seriously addicted, causing serious harm to themselves and others and potentially ruining their lives.
Gambling addiction is associated with all kinds of terrible consequences, including loss of home, loss of family, and loss of life as a result of personal actions. So we’ve created massively concentrated social harm, and in return we’ve gotten meager tax revenue and tons of advertising everywhere. That doesn’t seem like a worthwhile trade-off to me.
wow. It seems like you really don’t like it.
I’m not! I’m not! I don’t like many bad products because I’m skeptical about them. I think we tend to systematically underestimate their harm. But the problem is the same in all cases. That is, it is concentrated in a small number of users who will perform the overwhelming majority of usage and experience the overwhelming majority of harm. And everyone else is profiting off their backs, which is amazing to me.
Are there any receipts for the widespread legalization of sports betting actually increasing how many people’s lives are being ruined by legal sports betting in this country?
entirely. You know, I think at this point, many Americans know someone who has been affected by this issue. I recently attended a wedding where a friend from college told me about a friend from his hometown in Erie, Pennsylvania. He works at the post office. This is not a wealthy person who invested $28,000 in sports betting. This is a really huge problem. Interesting thing about the legalization of gambling: we have information on this, mostly from the British experience, which is pretty grim. There are estimates that 8% of all suicides in the UK are due to sports gambling addiction.
Because gambling has been legalized in different states at different times in the United States, economists can use a fairly specific set of methods to isolate causal relationships in sports betting. . One study by a Northwestern University economist I pointed to estimates that for every dollar spent on sports gambling, households put $2 less into their investment accounts.
This greatly increases the risk of your bank account being overdrafted or your credit card limit exceeded. There is another paper by economists from UCLA and USC that specifically looked at online sports gambling. They found that legalization increased the risk of bankruptcy by 25 to 30 percent.
Another thing that really stands out in these studies is that the damage tends to be concentrated on those who are most economically insecure. The damage tends to be concentrated in areas with the highest levels of poverty, and among young people who are already at risk of all kinds of poor financial decisions. Therefore, gambling harm not only happens to some people, but it often happens to people who cannot afford to suffer gambling harm at all.
Do you know how much money people win and lose on average?
entirely. Another study by the folks at Southern Methodist University had a panel of 700,000 sports bettors and revealed some really interesting things. Only about 5% of panel members withdrew more money from the app than they deposited. So 95% of people are losing money. What’s really interesting is that about 3% of gamblers take in 50% of sports betting profits.
How much does the amount of money people are losing have to do with how much gambling has changed due to the little devices we carry in our pockets?
In many ways, it’s a big part of the story. One factor is that it is much more readily available. What this means is that if you have to go to a casino to gamble, you might not want to take time out of your day to do so. I might not get carried away, and fewer people will become addicted in the long run because they won’t be exposed in the first place. The beauty of continuing to gamble in Vegas is that you have to go to Vegas to do it.
Even more surprising is that app-based gaming promotes algorithmic discrimination by sportsbook providers. They can see who will spend the most money. They know you check your bets in the middle of the night.
They know if you are watching the game, what you are playing and how much you are betting. What they can then do is augment that with algorithms. They may make you suggestions or assign you a personal concierge who will encourage you to bet more money. This is actually what casinos in Las Vegas do. If you’re a whale and a big spender, you can get all kinds of goodies. But instead of it happening in a seedy hotel or a fancy hotel, it’s happening on your phone all day, every day, until you get all your money.
It’s clear from our conversations with you that legal sports betting is taking a toll on states across the country, especially young men. However, it was made legal with the promise that it would bring many benefits to the states that approved it. You seem to believe it is fruitless.
There seems to have been some controversy here. One is tax revenue, which is a big selling point. And the reality is that tax revenue is pretty meager. Looking at the 38 most recently legal states, gambling generates approximately $500 million per quarter. This is nothing compared to the revenue needs of most states, but it is a fairly small amount. Obtained from alcohol, tobacco, and marijuana.
Another argument is that it will reduce the reach of offshore gambling sites. That doesn’t seem to actually happen. A survey conducted in Massachusetts found that gamblers were more likely to use unapproved gambling sites even after legalization. But it makes sense. If you are an active sports bettor, you probably bet at multiple sportsbooks and try to get as much action as possible. Therefore, overseas sites are merely complements. They are not a replacement.
And the third argument, which I think we should take seriously, is the hedonic advantage and the personal freedom advantage. But we did not live in a terrible dictatorship in 2017. If you and I made a bet together, neither of us would be in danger of going to jail, right? In other words, it wasn’t illegal for us to place bets between individuals. What was illegal was the participation of large corporations and the state in that action. And I’m not that upset about Georgia’s restrictions on freedom to engage in yours and mine.
