SEPT 12, 2024 | OPINION | By Thomas Nielsen
Sports betting has gone too far. Now legal in 38 states and the District of Columbia, sports betting grossed $11 billion in 2023, and the industry continues to grow.
Sports betting is a relatively new enterprise that has generated a lot of tax revenue for the states that have legalized it. However, it also has the potential to destroy lives and has been a negative factor for the financial stability of many young adults.
According to a poll conducted by Siena College, one in five Americans have a sports betting account. Of these gamblers, 18% lost money that was needed to meet financial obligations.
Proponents of legalization believe legal betting allows the practice to be regulated and taxed – a process that has brought a large amount of tax revenue into states. New Jersey, for example, made over $414 million in taxes from online wagering and gambling in 2023.
However, opponents will tell you that the ease of use has allowed gamblers to destroy their own lives. Scott Baker, a professor at Northwestern’s Kellogg School of Business led a study that found that legalization has led to higher credit card balances, lower access to credit, and a reduction in longer-term investments, with the effects concentrated among financially-constrained households.
It’s contentious what the net impact of legalization has been, but it is frightening how intertwined sports and betting have become.
During many live sporting events, major celebrities and retired athletes endorse sportsbooks in advertisements. Mobile betting apps allow gamblers to make bets easily and quickly from their home, with the NBA even incorporating betting features into its League Pass Service.
This ubiquity raises questions about league legitimacy. Fans have previously questioned, mostly jokingly, whether the NFL and other professional sports leagues are scripted. Betting transforms this previous debate of jest into a more serious issue. Biased refereeing issues are worsened when money is on the line, even if it truly is just a bad call.
Athletes also endure negative side effects. The NCAA released a report revealing that one-third of high-profile athletes have received abusive messages from gamblers. Many professional athletes have also revealed abusive or threatening messages regarding gambling.
J.B. Bickerstaff, head coach of the Cleveland Cavaliers, shared during a press conference last March that sports bettors have threatened him and believes something has to be done.
“There’s no doubt about it that it’s crossed the line,” Bickerstaff said. “The amount of times where I’m standing up there, and we may have a 10-point lead, and the spread is 11, and people are yelling at me to leave the guys in so that we can cover the spread — it’s ridiculous. But again, I understand the business side of it and the nature of the business of it. But I mean, it is something that I believe has gone too far.”
On top of verbal abuse, legal gambling has also gotten athletes in trouble. Jontay Porter, former power forward for the Toronto Raptors, was banned from the NBA for life over a betting scandal. Other controversies have popped up, notably with L.A. Dodgers star Shohei Otahni’s former interpreter who placed bets using Otahni’s bank account (Otahni has denied knowledge of these bets).
The aftereffects of legalization are myriad, and largely leaning negative. A study led by associate professor Brett Hollenbeck from UCLA’s Anderson School of Management has found that states with legalized gambling saw credit scores drop by a statistically significant amount and bankruptcies increase by 28%.
Now is the time for lawmakers to start to regulate the industry before it becomes too ingrained for change.
The SAFE Bet Act currently proposed to Congress would ban sportsbook advertising during sporting events and programming aimed at inducing gambling with bonus bets or similar deals. This could lead to sports gambling being treated like cigarette advertisements with similar restrictions. This bill would also place restrictions on the number of deposits placed in a 24-hour period, and require operators to conduct “affordability checks” before accepting large wagers.
We need to take a look at the impacts of sports betting to see if it is worth the demonstrated cost, but in the meantime, sensible restrictions would reduce the danger of the industry and prevent the growth of gambling addiction.