Cool the ‘gamblification’ of U.S. sports

The 2024 Super Bowl set records in sports betting, with an estimated 68 million adults saying they would place wagers on the game. In the two weeks preceding that event, nearly 1.8 million people signed up for online betting accounts – which are now legal in 30 of the 38 states, plus D.C., that allow sports betting. And now the NCAA men’s and women’s basketball tournaments are upon us. If history is any guide, there will be even more betting on March Madness than there was on the Super Bowl.

These events confirm the importance of Murphy v. NCAA, the Supreme Court ruling half a dozen years ago that permitted states other than Nevada to legalize sports gambling. And the lull between the Super Bowl and March Madness provides a moment to ponder that decision’s impact, for good and for ill. On balance, the causes for concern outweigh reasons to celebrate. The lightly regulated legal sports betting business needs more, and smarter, government supervision.

No doubt it’s one of the nation’s faster-growing industries. In 2023, legal sports betting generated $10.92 billion in revenue, a 44.5 percent increase over 2022, according to the American Gaming Association. The upside, of course, is that bettors who can’t afford a trip to Las Vegas no longer have to resort to the black market, with its potential for violence and corruption. Indeed, with sports betting now taking place in the open, states can tax it; in the third quarter of 2023, sports betting yielded $505.96 million in much-needed revenue, a 20.5 percent increase from the same quarter in 2022, according to the Census Bureau.

The downside is that spectator sports have been quickly and pervasively “gamblified,” as scholars of the phenomenon put it. Access to an addictive experience has been expanded, and legitimized, in a nation already experiencing multiple crises related to addictive behavior. Like nicotine or cocaine, sports betting – which is especially prevalent among young men – offers a transitory high and leaves the brain craving more. According to Charles O’Brien, a University of Pennsylvania psychiatrist specializing in gambling disorders, brain imaging studies strongly suggest gambling “activates the reward system in much the same way that a drug does.” Research indicates that nearly 6 million Americans struggle with a gambling disorder.

Thanks to smartphones, gamblers can easily use sports betting apps that often keep them hooked. With detailed real-time data of user habits – when they gamble, how they react to wins and losses – the apps can nudge users to keep going when they are most likely to do so. DraftKings and PointsBet employ VIP hosts who develop personal relationships with bettors and give out thousands of dollars of credits to help customers get going again after a losing streak. As the Wall Street Journal recently reported, VIP customers at PointsBet were 0.5 percent of the overall user base but the source of 70 percent of company revenue during a recent two-year interval.

Such practices cry out for greater scrutiny at the national level. Since 1968, Britain has had a national Gambling Commission with considerable powers. In recent years, the country has prohibited the use of credit cards in both online and offline gambling. It has banned celebrities and social media influencers from lending their cachet to gambling advertisements. And the commission has significantly curbed VIP programs. Those are good ideas, from which the United States could learn, paying special attention to online betting sites.

And yet the United States lacks anything comparable to the British national regulator. The job of supervising gambling belongs to the states, which have mixed incentives, given how much they depend on tax revenue and given the competition among them for gambling industry investments. At one time, pro sports leagues themselves acted as a powerful check on “gamblification”; fearing the taint of possible scandals, they were vocal opponents of legalized betting. Now, pro leagues have gone all in on betting boosterism, establishing lucrative sponsorships and partnerships with sportsbooks.

Influential though the gambling industry and its lobby might be, two of the largest states – California and Texas, representing just over 20 percent of the nation’s population – still don’t allow legal sports betting. That’s partly because California’s voters rejected it at the polls in 2022, when it was the subject of two ballot propositions. The public’s apparent attitude – pragmatic acceptance of sports betting, with misgivings – bolsters the case for tougher regulation. More than five years after Murphy v. NCAA, it’s probably too late to call off the nation’s experiment with legalized sports betting, but not to prevent the damage it might cause.