America’s Invisible Sports Betting Epidemic

What do Tiger Woods, Michael Jordan, Charles Barkley and Floyd Mayweather, Jr. have in common? They’re all sports superstars, of course. But they’re also something else: Hard-core gambling addicts.

Mayweather, Jr. regularly gambles as much as $400,000 on college football games. He reportedly once won $3 million on a single Orange Bowl contest. But his biggest bet – and loss — came in 2014, when he wagered $10 million that the Denver Broncos would win the Super Bowl. In fact, the Broncos were crushed 43-8 by the Seattle Seahawks in one of the biggest Super Bowl blow-outs in history.

Jordan, meanwhile, is fond of betting on golf, including his own head-to-head contests with Woods and Barkley. He once lost a $1.25 million golf competition with Richard Esquinas, a private businessman from San Diego.

There are rumors, never confirmed, that Jordan’s gambling habit – which includes unsuccessful betting on poker and roulette at casinos in Atlantic City — was a major reason behind his retirement from basketball.

Woods, it seems, has a penchant for card gambling. He reportedly bets $25,000 a hand when he plays his favorite game – Blackjack — and is known throughout the casino circuit as a high-roller player.

According to one source, “he’s even received a $1 million betting limit by the MGM Grand in Las Vegas, where he always requests for the table to be filled with beautiful girls.”

None of these sports celebrities seems to have lost it all gambling – and they have the talent and drive – and above all, the money — to rebuild their fortunes after suffering major reversals.

But the average Joe is rarely so lucky.

The “mainstreaming” of sports betting

Sports betting, mostly illicit, has existed on the margins for decades.  But these days there are more legalized gambling opportunities than ever, thanks to a landmark 2018 Supreme Court decision that lifted the federal ban on sports betting.

Since then, 38 states, including Nevada, New Jersey and Connecticut, as well as Washington, DC have legalized the practice, with another 21 states considering similar laws.  It won’t be long, industry experts say, before sports betting is as commonplace — and frequent – as purchasing a ticket to a movie.

Sports betting is not the only form of legalized gambling, but it’s spreading faster than most. In part, that’s because it appeals most heavily to younger demographics, especially Millennials.  About 86% of all sports betting occurs online or with mobile apps, a practice which favors youth cohorts.

Men are also the primary sports betters, about 90%, according to Helixa, a user-insights platform.  Young African-American and Hispanic males are disproportionately high users. More than half fall into the 18-34 age bracket.

In 2021, as the COVID-19 pandemic spread, there was an 80% increase in the practice.  Currently, more than 20% of Americans place a sports bet monthly.

But these numbers are paltry compared to what’s coming. Some of the country’s largest and most populous states, including New York, California and Texas, have yet to legalize sports betting, but almost certainly will within a year or two – barring a pushback from Congress or from federal regulators

Goldman Sachs estimates that the combination of legislative initiatives and wider consumer adoption could push online sports betting from $900 million in 2021 to a $39 billion market in 2033 – a 300% increase.

Prop betting is more widespread

Another factor fueling sports betting growth is that more kinds of sporting events are being targeted by betters than ever before.

In past decades major sporting events like the National Football League Super Bowl, the Major League Baseball World Series and the NBA Championship Finals were the main venues.  Many work colleagues and neighbors placed friendly bets with each other.  Some risk takers, like Floyd Mayweather, Jr. placed huge bets in Las Vegas, hoping for a jackpot.

But these days no sporting event, however small, is safe from the predatory clutches of gamblers and their “enablers.” Currently, the one main restriction on legal betting is college sports, but it may be only a matter of time before this restriction falls, too.

Another accelerating factor is that gamblers no longer just bet on the final outcome of sports events, or the “spread” – the point difference between the game’s winner and loser.  Increasingly, they also bet on the performance of individual athletes (for example, whether a quarterback will throw a touchdown, and how many) or on the outcome of individual plays (will the kicker’s field goal be successful?)

These so-called “proposition” or “prop” bets have transformed sports betting into a live ongoing practice, with gamblers placing bets continuously as a sporting event unfolds.  Typically, prop bets are fairly small – for example, $50-$100 on the success of a field goal kick, rather than $1,000-$5,000 on the game’s final outcome – but over the course of a single sporting event, their value quickly adds up.

Finally, it’s worth noting that sports betting is especially lucrative as a source of advertising revenue as well as tax revenue for fiscally-strapped states.  Consumers also tend to be more receptive to taxes on betting than on other activities.  All of these factors are acting as huge accelerants to the sports betting trend.

Risk of gambling addiction growing

Arnie Wexler, a compulsive-gambling specialist, predicts that “mainstreaming” sports betting will unleash “a volcano of gambling addiction in America.”  Prior to the legalization of sports betting, researchers estimated the lifetime gambling addiction prevalence rate at about 2% for “pathological” gambling and about 4% for the less severe condition dubbed “problem” gambling – or 6% total.

That may not sound like an epidemic, but it means that more than 15 million Americans, many of them poor and middle class, are suffering the fall-out from spending and losing hard-earned money on gambling.

And the numbers are getting worse. The National Council on Problem Gambling, a Washington-based nonprofit, estimates that gambling addiction, much of it sports-related, has doubled over the past two years.  State governments are aware of the problem but tracking and treating people with gambling problems is not yet a top priority, Wexler and others say.

Some sports betting centers have tried to limit the amounts that bettors can wager on a specific sporting event.  And a few states, while legalizing sports betting overall, still restrict online betting, which helps. But these measures are only slowing down the trend, Wexler and others say.  And many of these restrictions are poorly enforced, or easy to evade.

The larger problem, perhaps, is that compulsive gambling is something of an “invisible” addiction. Many Americans that gamble compulsively – like alcoholics – deny they have a problem, until it spirals out of control.  And the fall-out can be severe. Gambling addicts can rack up massive credit card debt, drain their retirement and savings accounts and eventually sell off valuables and even furniture to feed their “habit.”

While some are forced to stop – or “white knuckle” – their addiction because they simply run out of money, others are so addicted they turn to illegal activity – forging signatures on checks or other forms of outright theft, including embezzlement – just to secure more funds to gamble.  Gambling addiction is also linked to other addictions and mental disorders including depression, chronic anxiety and substance abuse.

With the rise of unregulated sports betting, and the introduction of more sophisticated and mobile betting technology, industry experts like Wexler say these problems are beginning to skyrocket.  Already more consumers are asking for help.  Calls to a national hotline for gambling addiction increased by 33% during 2020-2021.

“It’s this ticking time bomb,” Keith Whyte, the executive director of the National Council on Problem Gambling, told NBC News recently. “We have to take action now.”

Will regulation help?

Despite acknowledging a growing problem, the sports betting world is divided over whether and how to regulate an industry that is being fueled by an insatiable popular demand.  Sports betting also thrives because it’s a source of revenue for cash-strapped states facing persistent fiscal deficits. Most states impose a flat tax or take a percentage of gross profits from sports betting companies; they also collect a one-time application fee for operating in the state. New York, for example, earned $700 million in taxes from sports gambling in 2022.

But the chase after easy money could surely use more guardrails both to protect consumers and to share the benefits from sports betting – and online gambling generally – more widely. Just last week, the US Senate Judiciary committee held its first-ever public hearings to discuss the sports betting epidemic and possible solutions, including federal regulations that could supplant the current patchwork of laws and guidelines passed by states thus far.  Most of those testifying said they supported legalized sports betting but felt that the industry – led by BetMGM and DraftKings  – was being granted carte blanche to advertise and promote the industry with virtual impunity, ignoring the mounting social costs.

Among the reforms suggested at the hearing were a crackdown on the unrestrained advertising currently underway on college campuses that is  luring youngsters to place sports bets, as well as more federal and state resources to support gambling addiction programs.

Keith Whyte, the afore-mentioned executive director of the National Council on Problem Gambling told the committee, “As of last year, for every dollar states have generated from commercial gambling, just .0009 cents were invested in problem gambling services. While substance use disorder is seven times more common in the United States than gambling disorder, substance use disorder receives 338 times more public funding,” he noted.

Predictably, sports betting industry representatives boycotted the Senate hearing, saying the committee members were recycling “myths” about the dangers of sports betting while minimizing its benefits to states and to individual consumers alike.  But critics say the industry is kidding itself and could soon face the same kinds of pressures that led the tobacco industry to face a massive, indeed crippling, crackdown, including injury lawsuits and tight restrictions on sports gambling venues and products, especially mobile apps that have allowed the industry to mushroom in the space of a few years.

The road ahead

Online gambling – especially the recent surge in sports betting – is just the latest form of addictive activity that provides a dysfunctional palliative for the social and psychological ills that so many Americans face as they struggle with low-paying stress-filled jobs, declining real wages and widening income inequality.  For a growing number, sports betting – like playing the lottery, but with better odds – offers the fantasy of scoring a quick kill – or amassing a large fortune – to offset their current financial predicament, or simply to distract them from a host of personal problems and gnawing anxieties.  Some modest sports bettors do gain from their small periodic investments, enough to keep them in the game and supportive of the practice overall.  But too many of the heavy users, whose numbers are growing rapidly, run the risk of losing it all while leaving their lives and families destroyed or damaged.

Nearly six years after the US Supreme Court declared sports betting a constitutional right, some of the unfortunate consequences of that decision are finally coming into focus. But while debate is growing, there’s little consensus on how far the federal government or state government can go to rein in an activity that the High Court has allowed to flourish with such impunity. Fortunately, at least a dozen states are still holding out on the issue, and twenty one states are still opposed to sports betting conducted online or with mobile apps, which has allowed the practice to skyrocket.  In addition, a majority of older voters, ages 65 and above, and women – in contrast to youth, especially men – still tend to express staunch opposition to sports betting, according to opinion surveys. Opinions among middle range age groups are more mixed.  Surprisingly, Republican voters – in Red-leaning states like Texas and Missouri – seem decidedly more inclined than their Democratic counterparts to oppose the expansion of sports betting.

This partisan split is also apparent at the national leadership level. There is some evidence, in fact, that senior Democrats, while alarmed at the sports betting trend, may be more inclined than their Republican colleagues to support the industry overall. Back in 2019, in a surprise move, then-President Trump’s Justice Department called for restricting the promotion of sports betting across state lines, consistent with the 1961 Wire Act. But two years later, President Biden’s DOJ challenged that interpretation, arguing that additional restrictions on online gambling – beyond those established by Obama in 2011 – were unnecessary.  Democrats, consistent with their views on marijuana legalization – or even, the legalization of prostitution – may be more inclined to treat sports betting as a personal freedom, or “choice” issue, rather than a social issue with public health consequences. Moreover, some of the leading gambling states that support sports betting – Nevada, New Jersey, Massachusetts and Biden’s own Delaware, where some of the major betting forms are based – also lean Blue on the political spectrum. More research is needed, but it could be that lobbying by the major sports betting firms – plus, pressure from Democratic voting constituents – explains what appears to be Democratic favoritism toward the industry at the highest levels of its leadership.

The same questions must also be raised about the incoming Trump administration. The president-elect owns several hotels with gambling casinos in Las Vegas and elsewhere. He’s also a diehard supporter of the unregulated free market. But he’s proven equivocal on the sports betting issue in the past.  His first administration took no formal action to promote the industry – quite the contrary.  And the proposed policy agenda for his new regime – Agenda 47, like his first administration – makes no mention of sports betting or gambling at all. (Neither, for that matter, does the policy agenda, such that it is, of his Democratic opponent Kamala Harris).

The upshot? Presently, there’s a dearth of public and political awareness of the scope of the sports betting industry and the benefits and risks of its rapid, largely unchecked growth. An explosion of consumer demand – stoked by rabid unchecked industry advertising – is driving the market to new heights, largely under the radar screen. But pushback from hold-out states – including Democratic California – is growing, and some prominent members of Congress on both sides of the aisle have finally begun to take notice. Fortunately, the industry – and the issue – is still in its infancy.  Which means there’s still time for a full-fledged national debate – and appropriate federal intervention – before sports betting becomes so deeply ingrained in the popular consciousness – and entrenched in state and local economies – that a discussion of meaningful reform becomes practically impossible.

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