Legalized sports betting creates new generation of problematic gamblers – Washington Examiner
Jodi D., a 42-year-old from Virginia who became swept up in the lucrative but dangerous world of online sports betting, epitomizes a broader American crisis. After moving to New York in 2022, she enjoyed initial financial success by designing graphic T-shirts. However, she spiraled into addiction after getting introduced to the sports betting app FanDuel. Within months, Jodi was in deep financial trouble, having gambled away significant sums, including rent money, leading her to pawn her grandmother’s engagement ring.
This personal debacle coincides with the broader legalization and explosion of sports betting in the U.S., following the Supreme Court’s 2018 overthrow of the Professional and Amateur Sports Protection Act. This has led many states to legalize sports betting as a revenue source, with about 164 million American adults now living in states with legal sports betting markets. The online betting landscape, valued at $161 billion globally, is set to hit $325 billion by 2031.
The rapid expansion of sports betting is facilitated by an aggressive lobbying effort by sports leagues, betting operators, and allies, including deploying lobbyists who ensure favorable legislations. However, this expansion comes with a significant human cost. Experts warn it fosters an environment where addiction can flourish, affecting vulnerable groups disproportionately, leading to increased calls to problem gambling helplines and raising public health concerns.
Several states experiencing massive tax windfalls have been slow in addressing these issues. Although states like Arizona, Colorado, and Louisiana generated millions in revenue, only a fraction goes towards supporting gambling addiction programs. Despite these challenges, the links between sports leagues, betting platforms, and broadcasters continue to deepen, promoting a culture increasingly permissive of gambling.
The growing challenge reflects a societal shift where the immediate financial benefits to states and businesses seem to outweigh the considerable human costs—an imbalance that critics like Jodi urge needs redress.
Jodi D. went from living her best life to hocking her grandmother’s engagement ring to feed her online sports betting addiction.
It took less than three months.
The 42-year-old graphic T-shirt designer left Richmond, Virginia, in 2022 and headed north, with dreams of making it big in the Big Apple.
She found a job in Williamsburg, a hipster haven in Brooklyn, New York, that also catered to trust fund babies. A T-shirt that went for $25 in Virginia easily sold for $125 there. In one summer, she made more money than she ever had in her life.
“I was on top of the world until I wasn’t,” she told the Washington Examiner, who she asked not to reveal her last name for fear it could hurt future employment opportunities. “It was a hard fall.”
To Jodi, sports was something that had always happened in the background. Her dad and brother were fans of football, basketball, baseball, golf, and bowling. She was the more “artsy” type. In a good year, she might have caught the tail end of the Super Bowl Halftime Show if she remembered to watch.
One night, at a party in a drained-out swimming pool in Williamsburg, she noticed a group of people with their eyes glued to their phones, occasionally letting out cheers or an expletive. A few days later, she started getting referrals from friends she met at that party to join FanDuel, a sports betting app.
She had never placed a bet before, didn’t really care, but was bored and lured in with a promotional offer for a “risk-free” bet and a $300 bonus credit. She downloaded the app and started placing a few wagers. A few weeks in, she won $300.
Then she bet some more. Sometimes during lunch, sometimes when she couldn’t sleep.
Hooked
Ten weeks later, she was down $16,000.
It only got worse from there.
“I hid from my roommate because I lost the rent money,” she said. “I lied to my boyfriend. I lied to my friends and my family. I lost their trust … and I’m still trying to get it back.”
What happened to Jodi wasn’t a one-off.
She is one of thousands of people who have been caught up in the online sports betting craze that has swept across America.
Illegal just a decade ago, today, it’s everywhere. There are roughly 164 million American adults who live in a legal sports-betting market.
“Towards the end, I spiraled every time I turned on my Mac or looked at my phone,” she said. “I wasn’t prepared for how fast it would consume every aspect of my life.”
“i wasn’t prepared for how fast it could consume every aspect of my life.”
Jodi D., recovering gambling addict
In 2018, the U.S. Supreme Court overturned the Professional and Amateur Sports Protection Act, a nationwide ban on sports betting outside of Nevada. Since then, there’s been a mad dash among many state legislatures to legalize sports betting as a new and extremely lucrative source of tax revenue.
So far, 30 states plus the District of Columbia and Puerto Rico have legalized it, according to the American Gaming Association.
Multi-billion dollar industry
The global sports betting market is currently valued at $161 billion, and is on track to hit $325 billion by 2031, according to research released last month.
States, blinded by the thought of hefty tax revenues, have gotten on board with big betting companies.
Online betting became legal in North Carolina on March 11, 2024.
In less than two months, it surpassed the $1 billion mark in legal mobile sports bets, according to the North Carolina State Lottery Commission.
The total bet in North Carolina between March 11-31 was $659.3 million. Between April 1-30, it was $648.9 million. The total won in March was $590.8 million, and $538.4 million in April. In April, North Carolinians lost $105.3 million (the total amount of bets placed, won, and canceled). The $105.3 million, known as gross wagering revenue, was taxed 18% by North Carolina. So, the state’s revenue for April from legal mobile sports betting was just shy of $19 million. It was about $11.9 million in March, bringing the total to $30.8 million.
North Carolina is on track to make more than $100 million in tax revenue for its first year and then go up from there, Elon University sport management professor Bill Squadron told Axios.
The massive tax windfall from these companies, some of it made off the backs of people like Jodi, have had states salivating for a cut.
Lobbyists
America’s sports betting boom didn’t happen overnight.
The three major players that have catapulted it to success are betting site operators, sports leagues, and lawmakers. Working in concert with them are the lobbyists.
The NBA and MLB joined forces to form a lobbying alliance to shape legislation that would be advantageous to them and the states looking for a slice of the profits. The lobbyists then traveled from state to state to pitch their blueprint as a model for others to follow.
“Their lawyers are adept at testifying, but they rely on the relationship between local lobbyists and lawmakers to make more-personal inroads,” according to Legalsportsreport.com, which tracks lobbyists’ activity in different states.
Gambling companies and their allies deployed an ambitious lobbying campaign, showering state lawmakers with money, gifts, and visits from sports legends, designed to curry favor and obtain tax breaks, according to a 2022 New York Times investigation.
In Connecticut, the MLB and NBA had unsuccessfully tried for years to get legislation legalizing sports betting on the books. The leagues eventually hired lobbyists from Orrick, Herrington & Sutcliffe and Capitol Strategy Group in Hartford to represent their interest. In fact, the NBA and MLB retained Orrick in several states to push their legislation. In Connecticut, the leagues had four lawyers on the payroll, paying the two firms a total of $15,500 per month, according to Legalsportsreport.com.
In New York, there were five firms on retainer to lobby for the NBA and MLB. Cordo & Co made $10,000 a month; Patrick B. Jenkins & Associates got paid $8,000 a month; The Parkside Group made $12,000; the Riddett Associates got $8,000; and Stanley Schlein, who worked only with the MLB, received $5,250 per month.
Human toll
Despite warnings that these companies may be grooming a new generation of gamblers, targeting younger players, and feeding dangerous addictions that could turn into a public health crisis, the monetary gains seem to outweigh the human cost at every turn.
Multiple experts pointed out that online sports betting can become more addictive than traditional gambling because betting on sports seems less risky. And unlike a casino, mobile apps allow players to bet money directly from their bank accounts.
“One can easily, rapidly place many bets that may make it more feasible for vulnerable individuals to experience gambling problems,” Marc Potenza, director of the Center of Excellence in Gambling Research at Yale University, told NBC News.
Rachel Volberg, a gambling expert and researcher at the University of Massachusetts Amherst, told the Washington Examiner she has “concerns about groups in the population that are particularly vulnerable to experiencing gambling problems.”
“These groups include adolescents, young adults, women, immigrants, and people in recovery from a gambling problem,” she added.
After Florida legalized sports betting in November, calls to its Council on Compulsive Gambling doubled. Pennsylvania’s Council on Compulsive Gambling saw call volume more than double from 2020 to 2023. Calls to Ohio’s Problem Gambling Network, meanwhile, increased 55% in 2023, the first year of legalized sports betting there.
“We believe, nationwide, the rate and severity of gambling problems have increased across the United States since 2018,” Keith Whyte, executive director of the National Council on Problem Gambling, a nonprofit organization devoted to minimizing the costs and harms of gambling addiction, said.
Whyte, whose group operates the 1-800-GAMBLER helpline, added, “We have every reason to believe the growth of online sports betting is a major contributing factor to the increase in gambling problems.”
Volberg believes that states that have legalized sports betting “have responsibility for ensuring that the harms associated with this type of gambling (as well as with other legalized forms of gambling) are minimized to the greatest extent possible.”
But that rarely happens.
“It seems like everybody just saw money signs and said yes, this is what we want,” Jodi said. “The sportsbooks, the states, the leagues, and then people like me, who came close to losing everything. Everybody jumped in but no one thought of the consequences. More people have gotten hooked on the high of winning. But when they lose, when I lost, I lost almost everything, including my own life.”
Repeated problem-gambling behavior has been linked with depression, anxiety, and suicide. That’s on top of massive debt, job loss, fractured relationships, and legal issues.
“There’s a state of gambling withdrawal just like opiate withdrawal or alcohol withdrawal,” Timothy Fong, M.D., a clinical professor of psychiatry at UCLA and a co-director of its gambling-studies program, told Men’s Health. “When you’re not able to gamble or participate in gambling, your body and your brain react to it. It goes through sleeplessness, changes in appetite, sadness, depression, anxiety. However, with mobile sports betting, there’s no such thing as that anymore, because you’re never not in a casino. You’re there unless you’re completely cut off.”
The tax revenue some states bring in and the amount of money spent on helping addicts like Jodi are surprising.
States making big bucks
For example, in 2022, Arizona made $28.9 million in tax revenue from sports betting and allocated only $2 million to help people with gambling problems. Colorado got $19.6 million in tax revenue and allocated $2.6 million to help people with addiction. Louisiana brought in $34 million that year and allocated $1.5 million. Michigan brought in $14.4 million and allocated $2.9 million.
Not only are online sports betting sites hooking up with states, they have also partnered with sport leagues too.
All of the major sports leagues have “official betting partners,” which dominate television broadcasts and saturate the airwaves with commercials for sports-betting apps. A recent study found viewers of the NHL and NBA games were exposed to an average of 2.8 gambling-related messages per minute during broadcasts.
The NFL partners with DraftKings, FanDuel, and Caesars Entertainment; NBA, FanDuel; WNBA, FanDuel; MLB, FanDuel; NHL, ESPN Bet in the US and TheScore Bet in Canada; PGA, ESPN Bet; and the LPGA, BetMGM. There are also official betting partners for players, teams, states, and events like The Kentucky Derby.
“The Kentucky Derby has broken its own handle record the past two consecutive years,” Andrew Moore, general manager of racing at FanDuel, told the Courier Journal ahead of the May 4 race. “Given the excitement around the 150th anniversary and the increased reach via online sportsbooks like FanDuel, we expect another record year in handle,” he said.
Last week, DraftKings, the United States’s largest sportsbook by market capitalization, joined Caesars Sportsbook and began offering odds on the U.S. Olympic swimming trials. Many more betting sites are expected to follow suit once the games officially kick off in Paris next month.
During the NBA finals, players were not only able to place wagers on the winning team, the margin of victory, and the number of combined points, they were also able to bet on every play imaginable.
Online sports betting surged this year at the Super Bowl, too, according to GeoComply, a company that tracks the location of internet gamblers. The company said it processed more than 122 million checks in 28 of the 29 states that offered online sports betting at the time, excluding Florida.
GeoComply makes sure gamblers are where they say they are before allowing their online bets to go through, a process known as geolocation, which is the foundation of online betting in the U.S.
The Washington Examiner found multiple websites that gave step-by-step instructions on how to circumvent GeoComply’s monitors and make online wagers.
Sports betting and athletes
Sports and gambling were in the spotlight last year after the Los Angeles Dodgers fired Ippei Mizuhara, the interpreter and close friend of star player Shohei Ohtani. Mizuhara’s dismissal came after he allegedly stole nearly $17 million from Ohtani to pay off sports gambling debts that he racked up with an illegal bookmaker.
Earlier this month, MLB announced the suspension of five players, including San Diego Padres player Tucupita Marcano, who was banned for life.
In the NFL, at least 15 players have been suspended by the league for gambling violations, most recently wide receiver Calvin Ridley. Ridley, then a member of the Atlanta Falcons, placed several bets during November 2021 when he was on the non-football illness list.
Responsible gaming?
While states have been slow to invest in education and ways to help problematic gamblers, the country’s top sports betting companies have picked up the slack.
“While most of our customers play for fun and entertainment, we leverage our advanced technology to attempt to detect potentially problematic behavior and try to engage with those customers who may need additional help and resources,” Lori Kalani, DraftKings Chief Responsible Gaming Officer, told the Washington Examiner.
Kalani said DraftKings provides customers with “access to education about what it means to play responsibly and provide them with tools to help them play within their means and to not spend more time or money than they can afford.”
In fact, eight of the top sports betting sites now go above and beyond to self-regulate and protect their own players. Gaming companies like FanDuel, DraftKings, BetMGM, Penn Entertainment, bet365 and more have joined forced to create a trade group that promotes responsible gaming.
Called the Responsible Online Gaming Association, it gives players new data-driven approaches and cutting edge support tools to prevent what happened to Jodi from reoccurring. The members have collectively pledged more than $20 million to fund ROGA.
Jennifer Shatley, executive director of ROGA, told the Washington Examiner that “the online space does provide more opportunities around responsible gaming.”
“Traditionally in a bricks and mortar, we encourage limit setting for players to set the right time limits, monetary limits, frequency limits to manage their play and now on the online sites, the tools are actually there for them to do that on the site itself,” she said.
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Shatley added that responsible gaming is a “shared responsibility” that is “very collaborative.”
“It’s customers, it’s the gaming industry, the providers,” she said. “It’s also governments, it’s researchers, and academics working together as well to find out what are the effective best practices. It’s clinicians, health organizations. It’s best done collectively then we can amplify each other’s messages and programs and really protect the well being of customers.”
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