These events are Murphy vs. NCAA, a Supreme Court decision six years ago allowed states other than Nevada to legalize sports betting. And the lull between the Super Bowl and March Madness gives us a chance to reflect on the repercussions of that decision, for better or worse. In the end, the causes for concern outweigh the reasons for celebration. The loosely regulated legal sports betting business needs smarter government oversight.
There is no doubt that it is one of the fastest growing industries in the United States. According to the American Gaming Association (AGA), legal sports betting revenue in 2023 was $10.92 billion, an increase of 44.5% compared to 2022. The advantage, of course, is that bettors who can't afford a trip to Las Vegas no longer have to resort to the black market, which can be fraught with violence and corruption. In fact, because sports betting is now done in public, states can tax it. According to the Census Bureau, sports betting generated a much-needed $505.96 million in revenue in the third quarter of 2023, an increase of 20.5% from the same quarter in 2022.
The downside is that spectator sports are becoming rapidly and extensively “gambled,” as scholars of the phenomenon put it. Access to addictive experiences has just been expanded and legitimized in a country already experiencing multiple crises related to addictive behavior. Similar to nicotine and cocaine, sports betting (particularly prevalent among young men) provides a temporary high and causes the brain to crave more. Charles O'Brien, a University of Pennsylvania psychiatrist who specializes in gambling disorders, said brain imaging studies strongly suggest that gambling “activates the reward system in much the same way as drugs.” Research shows that approximately 6 million Americans suffer from a gambling disorder.
Thanks to smartphones, sports betting apps are readily available to gamblers and they often become addicted to them. With detailed real-time data about users' habits (when they gamble, how they react to wins and losses), apps can encourage users to continue gambling when they are most likely to do so. Masu. DraftKings and PointsBet employ VIP hosts who develop personal relationships with bettors and offer thousands of dollars in credits to help customers get back on their feet after losing streaks.as the wall street journal It was recently reported that PointsBet's VIP customers were 0.5% of the total user base, but were the source of 70% of the company's revenue in the last two years.
Such practices require further oversight at the national level. Since 1968, the UK has had a National Gambling Commission with significant powers. In recent years, the country has banned the use of credit cards for both online and offline gambling. It banned celebrities and social media influencers from lending their fame to gambling advertisements. And the commission drastically cut back on the VIP program. These are good ideas, and the US could learn from them by paying special attention to online gambling sites.
However, there is no equivalent national regulator in the United Kingdom in the United States. The job of overseeing gambling falls to each state, which has different incentives given its dependence on tax revenue and competition among states to invest in the gambling industry. In the past, professional sports leagues themselves served as a strong check against gambling activities. They were vocal opponents of legalized gambling, fearing potential scandal. Currently, professional leagues are focusing on betting boosterism, establishing lucrative sponsorships and partnerships with sportsbooks.
Despite the influence of the gambling industry and its lobby, two large states, California and Texas, which account for just over 20 percent of the U.S. population, still do not allow legal sports betting. Part of the reason is that California voters rejected the measure on the 2022 ballot, where it was the subject of two ballot proposals. The public's apparent apprehension but pragmatic acceptance of sports betting strengthens the case for stronger regulation. After more than 5 years Murphy vs. NCAAit's probably too late to halt the country's experiment with legalized sports betting, but it can't prevent the damage it could cause.
