Gambling has become inextricably linked with sports, an unintended consequence of the 2018 Supreme Court ruling and the ensuing rise of phone-based sportsbooks. With smart phones effectively becoming the vehicle to place bets in real-time 24 hours per day, access to action is unlimited. Gambling on a game used to mean betting on who would win, but bets can now be placed on every facet of a game, from who will score the next basket to whether the next score will be a three-pointer. This high-speed action fuels a whirlwind of excitement that promotes adrenalin rushes in gamblers, driving even more bets — as the addiction cycle unfolds. Gambling addictions are nothing new, but sports gambling is on track to become a national crisis due to the unregulated and symbiotic relationship between sportsbook apps and state governments turning a blind eye to it.
The amount of money being gambled on sports has been on the rise since the 2018 Supreme Court ruling. The American Gaming Association estimated that $2.7 billion would be legally wagered during March Madness 2024 and bets for this year’s Super Bowl alone were estimated at over $23 billion from 68 million Americans.
To put these numbers into perspective, the gross domestic product for Vermont is $31 billion and the U.S. adult population is around 270 million people. This means that for the Super Bowl alone, a quarter of U.S. adults likely placed bets, and the average amount bet by each adult was around $350, something that a person who makes a bet for the “fun of it” would not be likely to place. Of course, such analysis is skewed, with most wagers much less than this amount, and a small number significantly higher.
In 2023, over $120 billion was legally wagered on all sports, in line with the gross domestic products of Nebraska, Arkansas or the District of Columbia. The volume of illegal bets further adds to this value. With more states poised to legalize sports gambling in the near future, more than $200 billion of wagers is plausible in 2024.
There are currently no guardrails around sports gambling, and, as states are reaping significant revenue from the activity, imposing restrictions would likely be an uphill battle. Such revenue makes it easier for states to avoid instituting new taxes, while keeping state coffers full.
New Jersey, which permitted sports gambling in 2018 when the Supreme Court legalized sports gambling in states, has generated over $500 million in total tax revenue with more than $48 billion in bets placed. New York has generated over $1.7 billion in total tax revenue since 2019, with over $100 million alone generated in January 2024. Illinois has generated nearly $400 million since 2020.
Sportsbooks are quick to provide warnings associated with the risk of sports gambling, imploring people to only gamble what they can afford to lose. For example, DraftKings provides a link to encourage “responsible gambling,” including telephone numbers for gamblers to seek help. However, this link is in the upper right hand corner of their web page, in a font that is smaller than most of the page’s other fonts.
The problem with such information is that gambling addicts lack the self-restraint to know when to stop. The ease at which sports bets can be placed on smartphones, in real-time, likely amplifies the addictive rush. In fact, without gambling addicts, it would be impossible for sportsbooks to generate the revenue that they are amassing. Indeed, advising problem gamblers to not gamble is akin to advising alcoholics to not drink or smokers to not smoke — they are words that cannot be heard nor advice that can be followed.
With sports gambling continuing to grow and young men a captive audience, a nationwide epidemic has been seeded. Much like the opioid addiction crisis, lawsuits will emerge against sportsbooks, similar to how the opioid manufacturers were held liable for pushing their products to an unsuspecting audience.
But are sportsbooks to blame for this growing crisis? They are simply taking advantage of a financial opportunity blessed by state governments who are benefiting from the situation given to them by the Supreme Court. This symbiotic relationship ensures that state legislation to slow the growth of sports betting is guaranteed to not be forthcoming anytime soon.
In the longer term, as the crisis begins to reach a critical tipping point that draws even more negative attention and more lives and livelihoods are lost, legislators will be forced to take action.
The problem with shutting down or even limiting sports gambling is that there are ample sportsbooks from outside the country that can easily fill the void of U.S. companies, even though such organizations are technically illegal in many states.
States will not rush to curtail or slow sports gambling. If the sports betting tax revenue spigot was turned off, the resulting revenue shortfall would be overwhelming, creating financial crises in numerous states.
The gambling activities of Pete Rose that led to his lifetime ban from baseball in 1989 appear rather pedestrian compared to what we are seeing unfold today. If Rose had access to a smart phone and the gambling infrastructure in place today, his antics would have been unimaginably more expansive, and destructive.
The recent statements by Los Angeles Dodger star Shohei Ohtani demonstrate how gambling has permeated the nation’s sports culture, even if the players themselves are not placing bets.
We are entrenched in a nationwide sports gambling epidemic that has yet to reach its crescendo. How far, and low, this epidemic must progress remains shrouded in uncertainty. What is certain, however, is that the end result for the epidemic will be ugly. The responsibility for its rise will be blamed on a wide swath of participants, including the state legislators who are turning a blind eye to its growth and negative ramifications.
Sheldon H. Jacobson, Ph.D., is a professor in computer science in the Grainger College of Engineering at the University of Illinois Urbana-Champaign’s. A data scientist, he applies his expertise in data-driven risk-based decision-making to evaluate and inform public policy. He is also the founder of the Bracketodds website, a STEM Learning Lab devoted to March Madness analytics at the university.
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