The dark side of the sports betting boom

Nathaniel Meyerson, CNN

The gambling gold rush is expensive.

In 2018, the Supreme Court struck down a federal ban on commercial sports betting across much of the country. Thirty-three states have legalized sports gambling since the decision. A record 50.4 million American adults are expected to enter Sunday’s Super Bowl game.

The booming sports betting industry, legislators and even the professional sports leagues themselves are making it easier, faster and more enticing for people to bet on games — and causing gambling problems, gambling researchers and addiction specialists say.

A flood of ads, one-click betting technology at home, and almost unlimited betting options during games collided. There has been a spike in inquiries to state gambling hotlines, according to states.

The last five years have seen an explosion of online sports betting apps from the likes of DraftKings, FanDuel and Caesars. These apps often replace illegal betting sites. At the same time, they also attract an influx of new players who have never been to a casino or know how to bet at a bookmaker.

During the Super Bowl, advertisements featuring the most famous sponsors and athletes will be raining down, designed to encourage new signups and capture market share. DraftKings will play a commercial featuring Kevin Hart and David Ortiz, while Rob Gronkowski will attempt a live field goal in a FanDuel commercial. (Any customer who places a Super Bowl bet of five dollars or more on FanDuel will win a share of $10 million in “free bets” if Gronkowski does so.)

Sports teams and leagues once vehemently opposed gambling. Now they cooperate with bookmakers.

These days, players can also do much more than bet on the outcome of a game. In the game, you can bet on each quarter, player and event.

Resources for gambling addiction programs in the United States have long been depleted, and they have increased even more due to the current wave of sports betting. According to a nationwide survey conducted by the National Association of Gambling Service Administrators, there were 5.7 million Americans with a gambling addiction in 2020.

According to Timothy Fong, a psychiatrist and co-director of the UCLA Gambling Research Program, attention to gambling disorders has historically been minimal in the United States.

Part of the reason for this, he says, is that gambling addicts are seen as stupid or lacking willpower. “We equate the ability to hold money and win money with success, and losing with greed.”

There is also meager federal oversight of the gambling industry, and there are currently no federal funds earmarked for the treatment or research of gambling addiction, unlike federal funding for alcohol, tobacco, and drug addiction programs.

A patchwork of state legislation, a lack of strong consumer protection in many states, and limited advertising restrictions exacerbate the problems.

“Many states have naively or otherwise gone into legalizing sports betting without adequately assessing the costs of problem gambling resources,” said John Holden, an assistant professor of management at Oklahoma State University who studies sports gambling regulation.

“State legislators can do a lot more within the limits on advertising,” including allowing additional funding to combat false and misleading advertising, Holden said.

In-game bets

Sports betting can be a way for some people to develop, maintain, or accelerate gambling addiction.

There are several features of sports betting that make it different from other forms of gambling and can lead to addiction.

The researchers say that many sports bettors tend to think that their gaming wages are safer and based more on their own experience and skills than luck. This can give them a false illusion of control.

In addition, real-time betting in games reduces the delay between risk and reward, as well as increases the speed and frequency of betting, experts say.

“I was involved in a lot of real-time betting,” said one 24-year-old man with a gambling addiction who spoke to CNN on condition of anonymity. He started betting on sports seven years ago through a bookmaker, but increased his rates as soon as he started using the apps.

During football matches, he bet on the outcome of shots and on which team would score the next touchdown. Since he lost more during the game, he tried to win it back in the next game.

“You see the game going on and you think you know,” he said. “It’s not like it used to be where the bookmaker was betting on who would win.”

He said he lost $100,000 in sports gambling, including money from student loans. He is currently undergoing treatment at Beit T’Shuva Hospital in Los Angeles, which provides inpatient and outpatient services to people suffering from gambling addiction.

Casey Clark, senior vice president of the American Gaming Association, a gambling industry trade group, said the legalization of sports betting has moved the black market for sports gambling to regulated markets, which has benefited states.

The gambling industry and sports betting operators are partnering with regulators, professional sports leagues, media companies and advocates to set standards, educate consumers about gambling and fund recovery efforts for people seeking treatment, Clark said.

“We have had a very rapid escalation and movement towards giving American consumers the legal market access they clearly want. And so we must continue to develop this market,” he said.

doing my best to keep up

Advocates for gambling addicts say the demand for help and treatment has grown with the rapid spread of legal sports betting.

According to Felicia Grondin, the organization’s chief executive, requests to the New Jersey Board of Gaming Helpline for sports gambling have increased 60% since it became legal in the state in 2018.

Grondin feels helpless in the face of a constant barrage of ads encouraging betting on games.

“We consider this to be predatory advertising because it is relentless and embellishes gambling,” she said.

Clark of the American Gaming Association said the group has created a responsible marketing code to set industry-wide advertising standards.

But self-enforcement by the industry cannot compensate for strict oversight by regulators, said Keith White, executive director of the National Council on Gambling.

“Self-regulation seeks to dumb itself down to the lowest common denominator, not the highest,” he said. “Some carriers are definitely taking advantage of the weak regulatory framework in some states.”

Free bets

Every state where gambling is legal has a regulatory body that oversees it.

But few have “really done more than the minimum amount to increase funding for gambling addiction treatment,” Holden said. According to him, the sports gambling industry is most similar to financial markets, but financial markets are much more regulated than banks.

Most states require sports betting ads to include a minimum gambling age, as well as responsible gambling messages such as gambling hotlines. These messages are short and usually come at the very end.

Regulators fear how severely they can restrict messages in gambling ads without violating the First Amendment’s protection of commercial speech.

“A lot of government regulators have big concerns about the First Amendment,” Holden said. “No one wants to fund a lawsuit or lose a Supreme Court case over gambling.”

In most states, the legal age for sports betting is 21. But advertising at games, in stadiums and at sponsors of star athletes is normalizing sports betting for kids and teens, critics say. Last year, the UK banned top athletes and celebrities from appearing in ads endorsing or promoting gambling in an attempt to curb underage gambling. This is unlikely to happen in the United States.

In addition, researchers are concerned about the incentives and promotions that some sports betting apps often provide to users, such as signup and referral bonuses, promo codes and bonus bets. One 2017 study of gambling addicts found that messages offering risk-free bonuses had a big impact.

The Ohio Casino Control Commission fined DraftKings, Caesars and BetMGM $150,000 in January for advertising promotions or bonuses as “free” or “risk free” when in reality users had to lose money or risk their own money to get a promotion. .

“I have more incentive to gamble with these apps that give you free play and match your deposit,” said the former Los Angeles sports bettor, now in recovery. He recruited friends to sign up to receive referral rewards and looked at those enticements as free money. “You have to be an idiot to refuse it.”

The-CNN-Wire
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