Sports betting seems to be everywhere.
Online sportsbooks like BetMGM, DraftKings, or FanDuel are ubiquitous in advertising, whether on social media or while you’re watching a game — and they offer some amount of free money for your first bet.
During pregame shows or sports podcasts, you’ll hear the odds for each contest; You’ll hear prop bets, like LeBron James being the first player to score for the Lakers against the Warriors on Christmas Day; And you’ve probably heard of risky, multistep bets called parlays that can turn into a turn $25 bet at $237,553.
The explosion of sports gambling in the zeitgeist is the result of a 2018 Supreme Court ruling rule which repealed the almost nationwide ban on competitive sports gambling. Since that ruling, sports betting has been legalized 38 states and the District of ColumbiaAnd the American Gambling Association reported that the American sports betting industry posted a record-high revenue. $10.92 billion in 2023; According to a recent poll According to Seton Hall University’s Stillman School of Business, more than one in three Americans have bet on sports at some point.
For competing athletes like the three-time NBA champion and podcast host Danny GreenFor those who retired from professional basketball in the fall, it became common to hear from bettors upset about losing bets. “They say, ‘You owe me money,'” Green said Today, explained Social media messages to him about angry sports betors. “They are clearly taunting, saying, ‘You sleep! You know what boy! You cost me. Couldn’t you get two more rebounds?”
Like superstars Kevin Durant And Kyrie Irving Also talked about how sports gambling legitimized the relationship between athletes and fans. “Gambling and sports betting has completely taken the purity and the fun out of the game, let me be honest with you,” Irving said on the streaming platform. Twitch last year
Harassment doesn’t stop at professional sports either. The NCAA, which governs college sports, is published Information This year shows that one in three high-profile collegiate athletes received an abusive message from someone for betting purposes, and 90 percent of harassment against athletes occurs online through social media.
Charles Fein Lehman Recently wrote about sports betting For the AtlanticWhere he argues that legalizing sports gambling was a mistake. The holidays are on and sports are on TV, Today, explained Reached out to Lehman — who usually writes about addiction, drugs and public safety — to ask: What’s so bad about legalized sports gambling?
A partial transcript of the conversation, edited for length and clarity, follows. Listen to the entire conversation Apple Podcasts, SpotifyOr wherever you find podcasts.
Sean Rameswaram
Charles, what do you think that legalized sports gambling is doing in our country?
Charles Fein Lehman
When you do the cost-benefit math, gambling looks like any other addiction, except that most people who participate in it get some small form of useful hedonic benefit. They get some fun out of it. And then a small subset of those people will become seriously addicted and cause serious harm to themselves, others, and potentially ruin their lives.
Gambling addiction is associated with all kinds of dire consequences including loss of your home, loss of family, loss of life through personal actions. And so we created this huge concentrated social loss, and in return, we got some anemic tax revenue and a bunch of advertising everywhere. That doesn’t seem like a worthwhile trade-off to me.
Sean Rameswaram
wow It sounds like you really don’t like it.
Charles Fein Lehman
I don’t! I don’t! I don’t like it which is why I’m skeptical of many vice products. I think we tend to systematically underestimate their losses, but the problems are the same in each case, which is that they tend to concentrate in a small number of users who will use the majority and suffer the majority of losses. And everyone else is benefiting from their backs, which is a worrying system to me.
Sean Rameswaram
With so many lives lost to sports betting in this country, do we have any gains from the widespread legalization of sports gambling?
Charles Fein Lehman
absolutely You know, and I think at this point, many Americans know someone who has been affected by this. I was at a wedding recently and a friend of mine from college told me about a friend from her home in Erie, Pennsylvania. He works in the post office. Not a good guy with $28,000 in the sports betting hole. Just a tremendous problem. Interesting facts about gambling legalization: We have data on this, mostly from the UK experience, which is quite serious. It is estimated that 8 percent of all suicides in the UK are attributable to sports gambling addiction.
Sean Rameswaram
yes
Charles Fein Lehman
Because gambling was legalized in different states in the United States at different times, economists can use a fairly specific method to isolate the causal effects of sports gambling — not just what sports gambling is related to but what sports gambling causes for different outcomes. . One of the studies I point to, from economists at Northwestern University, estimates that for every dollar spent on sports gambling, households keep $2 less in investment accounts.
There is a risk of an overdraft on your bank account or an increase in your credit card maximum amount Economists at UCLA and USC have another paper looking specifically at online sports gambling. They find that legalization increases the risk of bankruptcy by 25 to 30 percent.
The other thing that really stands out in this study is that the losses tend to be concentrated among the most economically precarious, right? The losses tend to be concentrated in areas with the highest levels of poverty, and they also tend to be concentrated among young people who are already at risk of making all kinds of not-so-great financial decisions. And so it’s not just that gambling harms some people, it’s that gambling harms are often caused by people who can fall on them.
Sean Rameswaram
Do we know how much money, on average, people are losing and winning?
Charles Fein Lehman
absolutely There’s another study from the folks at Southern Methodist University where they have a panel of 700,000 sports bettors and they show some really interesting things. Only 5 percent of people in the panel withdrew more money from the app than they deposited. So 95 percent of people are losing money. What’s really interesting is that about 3 percent of the bets drive 50 percent of the gambling profits.
Sean Rameswaram
How much have people lost with how much gambling has changed with the little devices we put in our pockets?
Charles Fein Lehman
This is a big part of the story in more ways than one. Part of it is that it’s much more accessible, which means, if I have to go to the casino to gamble, I don’t have to take time out of my day. I might not be attracted, and so in the long run, you’ll create fewer people who are addicted because they’re not exposed in the first place. The virtue of gambling in Las Vegas is that you have to go to Vegas to do it.
Even more troubling is that app-based gaming facilitates algorithmic discrimination on the part of sportsbook providers. They can tell who is going to spend the most. They know when you check your bet in the middle of the night.
They know when you are watching the game, they know what you are doing and how much you are betting. And then what they can do is algorithmically strengthen that. They can give you offers, they can hire you a personal concierge who encourages you to bet more. That’s actually what they do in Vegas casinos if you’re a whale, a big spender — you get all kinds of good stuff. But instead of it happening in a seedy hotel or even a fancy hotel, it’s happening on your phone all day, every day, until they get all your money.
Sean Rameswaram
It’s pretty clear from talking to you that legal sports betting is causing a lot of harm in states across the country and it’s especially hurting the youth. But it was legalized with the promise that it would bring many benefits to ratifying states. You believe that is not paying off.
Charles Fein Lehman
I think there were a few arguments here. One is tax revenue, and that’s a big selling point. And the reality is that tax revenues have been pretty anemic. If you look at the 38 legal states at their most recent count, together gambling is bringing in about half a billion dollars per quarter, which is nothing but a drop in the bucket compared to the revenue needs of most states, if not substantially less. You get it from alcohol, tobacco, or marijuana.
Another argument is that you reduce the reach of offshore gambling sites That doesn’t really seem to be happening. There was a study from Massachusetts where they found that bettors were more likely to use unauthorized betting sites after legalization. But it makes sense — if you’re an active sports bettor, you’re betting at multiple sportsbooks, you’re trying to get as much action as possible. And so offshore sites are just complementary. They are not alternatives.
And then the third argument is one that I think we should take seriously, which is the hedonic benefit and the benefit of individual freedom. But we didn’t live in a terrible dictatorship in 2017. If you and I bet together, neither of us would risk going to jail, right? That is, interpersonal betting was not illegal for us. What was illegal was the complicity in the actions of big business and states. And I’m not all that upset about limiting the freedom of the state of Georgia to engage in betting on you and me.
