By: Brandon McCoy
Prior to Super Bowl Sunday, one of the most popular gambling days of the year, Massachusetts opened sportsbooks in its three brick-and-mortar casinos: Encore Boston Harbor, MGM Springfield, and Plainridge Park Casino. The state joined 32 others and the District of Columbia in offering sports betting, either online or in person. Soon after the projected biggest betting event of all time, Massachusetts will join 23 states plus D.C. in offering online wagering.
Sports betting, both online and in person, has been an activity that, until recently, has been restricted to places like Las Vegas and Atlantic City. However, the industry has exploded in popularity since the 2018 Supreme Court case Murphy v. NCAA. In this case, the Court held that the Professional and Amateur Sports Protection Act, which prohibited states from passing laws legalizing sports betting, violates states’ sovereignty under the Tenth Amendment.
Many states champion new sports betting laws as a method of generating tax revenue. The industry was a wedge issue in many state elections in 2022, as politicians on both sides of the aisle looked for a position that is simultaneously popular and would benefit a state’s coffers. U.S. Senate candidate Stacey Abrams (D-Georgia) urged voters to support her legalization efforts to provide a steady source of revenue that can be used to support education. While Republicans have largely positioned themselves as opposed to gambling legalization efforts, Kentucky and Minnesota Republican lawmakers have introduced bills this year to bring online sports betting to their states.
However, the rollout of sports betting has not been a completely positive story. As expected, the rise of gambling has resulted in the rise of problem gambling— “gambling behavior patterns that compromise, disrupt or damage personal, family or vocational pursuits.” In 2022, the National Council on Problem Gambling reported a 43% rise in calls to the gambling addiction hotline in the previous year. Approximately 2 million Americans suffer from severe expressions of problem gambling, and another 4-6 million have mild or moderate gambling problems. Gambling addictions not only devastate individuals and families financially, but oftentimes result in those afflicted with addiction developing other mental illnesses or committing suicide.
Gambling companies already provide some resources to prevent problem gambling, as required by many state laws. Many states require gambling companies to list a gambling addiction hotline on advertisements. Some states review television advertisements before they hit the airwaves. Others bar gambling sites from allowing patrons to use credit cards to place wagers, restricting customers’ abilities to bet money they do not have. Gambling companies also provide ways for those struggling with addictions to block themselves from their websites. These regulations have had varying success and inconsistent applications. There have been instances, for example, where the gambling hotline number was not placed on an advertisement. Furthermore, many operators have allowed wagers to be placed with credit cards, with some facing fines for violations.
Still, states can and must do more to protect consumers. One option states have is to ban “whistle-to-whistle” advertisements—gambling advertisements that occur during a televised sporting events. While this restriction is the norm in the United Kingdom, no state has adopted such a provision. In Massachusetts, although the regulation was introduced in its initial sports betting bill, the regulation was stricken. States are incentivized to permit unrestricted advertisement to capture a wider base for tax revenue, especially to drive out usage of offshore gambling websites. However, research shows a correlation between gambling advertisements and gambling addictions.
Even if in-game restrictions on sports betting advertisements are untenable, states can restrict the content included in gambling advertisements. To curb the damage tobacco products imposed on Americans, the government limited how cigarettes could be presented in advertisements. For example, rules imposed from a massive settlement with tobacco companies banned the usage of tools such as paid brand product placement and cartoons to promote their products. New online sports betting advertisement have relied on celebrity endorsements, including athletes, to attract new consumers. While it is likely unnecessary to suggest that celebrity endorsements in sports betting ads are harmful per se, betting companies and our public figures can do more to present a more measured understanding of gambling in advertisements. To draw again from the tobacco industry, warnings about tobacco usage must occupy at least 20 percent of the area of visual advertisements. Heightened requirements of warnings for gambling ads may serve as a compromise that does not unduly slow the market’s momentum.
States can also require online gambling operators to place in-app or in-website activity reminders as a measure to reduce a consumer’s proclivity into problem gambling. For example, social gameplay website Global Poker gives hourly activity reminders, which pause your session and indicate how much a player has won or lost. In the context of sports betting, reminders could come in the form of “loss limit” notifications, or notifications on the amount of time spent on an application. Currently, loss limit notifications are presented as a responsible gaming option by major operators such as DraftKings and FanDuel. While there is some evidence that these notifications decrease the likelihood of players gambling beyond their means, research has also indicated that most players find them irritating and inconvenient.
Sports betting is a fun activity in which millions of Americans regularly participate. Expansions of legal sports betting sites is an excellent method for states to generate large amounts of revenue and drive out black markets. Nevertheless, states and stakeholders must take important measures to ensure Americans play safely and responsibly.