What’s going on?
The surge in marketing for sports betting in the United States began with a 2018 Supreme Court ruling (Murphy vs. National Collegiate Athletic Association) that overturned a 1992 law barring states from legalizing sports gambling. (Nevada was exempt from that law because it had legalized gambling — including on sports — decades prior).
From: Americans have bet $125bn on sports in four years since legalization:
“…in just four years, the industry has worked itself into the daily lives of millions of Americans – from those who plunk down money hoping for a certain outcome to those who watch TV broadcasts with odds calculations to those struggling with gambling problems.”
How prevalent is sports gambling now?
Two thirds of states have now legalised sports betting including Maine, Massachusetts (although they have not approved any providers to operate yet) and Kansas, yet other states that have resisted thus far include Kentucky, Missouri, North Carolina, and California, though it is part of a ballot to be held in November 2022.
And it is building broad appeal: women are signing up for mobile sports betting apps at a faster rate than men. In 2019, the American Gaming Association found that 31% of core sports betting customers are women, while another study found that women make up 47% of all sports fans. Furthermore, more than 6 in 10 sports gamblers are 40 or younger.
So what’s going on in California?
A ballot measure backed by Native American gaming tribes would allow sports betting in reservation casinos and horse racing tracks. It has qualified for the November ballot. Meanwhile, a competing measure also on the ballot would allow online gambling that you could do from a smartphone or other digital device, anywhere and anytime. It’s backed by online sports betting companies like FanDuel, DraftKings and BetMGM, which say they’re ready to spend more than $100 million to pass the ballot measure.
The California Democratic Party opposes legalising online sports betting supported by commercial operators but has opted to remain neutral on legalising sports betting at tribal locations and horseracing tracks. Meanwhile, only around half of California’s 109 federally recognized tribes support the Proposition, creating the appearance of division within indigenous communities when it comes to the harm and benefit of legalising sports betting in the state.
So sports betting is making a lot of money?
In a word, yeah. According to an article in the Atlantic “Total wagers are already in the neighbourhood of $120 billion…”
It’s also disrupting the market and the beneficiaries of all this money. In Washington state, sports betting is only legal in tribal casinos, which has led to a lawsuit claiming discrimination. If it is successful, the suit could slash revenue for tribes and could also undermine Native sovereignty.
Meanwhile in Ohio where their state Constitution mandates that lottery profits be spent on elementary, secondary, vocational and special education, the recent expansion of sports gambling under a new law requires 98% of sport-gaming tax revenue to flow to a fund that supports public and private schools. Half of that money must be spent on primary and secondary education and the other half on interscholastic sports and extra-curricular activities. The measure has been criticised as a way for the state government to avoid using its core fund to invest in education.
But there must be a lot of harm as a consequence?
Indeed there is: It has been described as “the largest and fastest expansion in gambling in U.S. history,”…In 2021, some 15 million more Americans reported having bet on sports than in 2018… and the risk of anyone — even nongamblers — developing a disorder rose roughly 50 percent during that span.
From What will sports betting do to Ohio’s gambling problems?
“The number of calls to Ohio’s Problem Gambling Helpline has risen for a fifth straight year, according to a new report — and counsellors are bracing for a new surge with the rollout of legalized betting on sports.”
An estimated 5% of New Yorkers have a gambling disorder, according to the Central Problem Gambling Resource Centre in East Syracuse.
From the Washington Post: "Responsible gambling advocate Brianne Doura-Schawohl said “the public crisis is already here” in the United States — it’s merely “bubbling under the surface. We basically have poured kerosene on it by legalizing without giving it significant attention,” she said. “It’s only going to become more prominent and more severe in its presentation.”
Gambless, a mental health app providing support to problem gamblers, has published its half-year 2022 update and has stated that, in recent months, it has seen an increase in US downloads. In 2021, out of all English speakers, US-based problem gamblers registered on the app held a 28% representation. That share has increased to 35% in 2022. The app believes the main reason behind this growth could be due to the continued legalization of online gambling across the US and its increased popularity, as those who wager online are more likely to search for digital support.
Why is this important?
The emergence of sports betting in the United States is unlike anything else, even when compared to the United Kingdom, which has had some form of regulation for decades, from Wired:
“The speed and intensity of the change sweeping the US comes down to regulation. The UK has had a central gambling regulator since the 1968 Gaming Act; the US, in comparison, is “a Wild West,” says Lia Nower, the director of the Center for Gambling Studies. There is no federal oversight of states on the issue, so nothing like the (relatively strict) UK Gambling Commission overseeing expansion. With state legislatures left to their own devices, more and more have concluded that gambling revenue is a quick and easy way to fill their coffers. There is a snowballing sense of competition at work here, explains Holden: If you don’t cash in, your neighboring state will, and this fear of missing out has driven states that have historically condemned gambling, like Texas, to begin to consider legalization. Beto O’Rourke, the Democratic nominee for governor, has said he would back legalization if elected.”
One particular area of concern is the advertising of online sports gambling: “States regulate how sportsbooks can operate but give companies wide latitude over what they can say in advertisements — a break from the constraints on other industries where there is a risk of addiction, such as tobacco. And there are no advertising rules specific to the sports betting industry at the federal level.”
Why does this matter in New Zealand?
Any major change to rules for gambling in the United States will be monitored by policymakers in New Zealand, as gambling regulators from around the world watch what other jurisdictions are doing to reduce the harm from gambling.