Rein in Sports-Betting Profiteers

Legalization has wrested control of sports betting from organized crime. But with few federal regulations in place and almost no public education on the newly sanctioned activity, many working-class people are now falling prey to another group of predators.

With proper oversight and guardrails, American sports betting can shed its pitfalls to become a safe and enjoyable part of our culture. (Budrul Chukrut / SOPA Images / LightRocket via Getty Images)

Speaking over excited whispers and the rapid-fire shutters of watching cameras, the man placed two bets: the New Jersey Devils to win the 2019 Stanley Cup, and Germany to win the 2018 World Cup. Turning triumphantly to the crowd, the gambler, New Jersey governor Phil Murphy, presented his tickets as proof that legal sports betting had come to New Jersey.

The date was June 14, 2018. A month prior, the Supreme Court’s Murphy v. National Collegiate Athletic Association decision struck down the national ban on sports gambling, opening the floodgates for what is now an inescapable industry. In the five years since Governor Murphy’s inaugural bets (both of which lost), sports betting has transformed from a once-illicit vice into a popular hobby. It’s now legal in thirty-three states, sports books sponsor every major sporting event, and sixty-four million Americans, myself included, have collectively wagered over $220 billion on everything from the Super Bowl to South Korean table tennis.

As a recreational bettor myself, I have enjoyed the hobby (and the extra pocket change it has provided), but I have also witnessed the dark sides of legal betting, which are seldom acknowledged by the booming industry.

One cannot discuss the shock-doctrine introduction of legalized gambling without acknowledging the financial situation in which it has been legalized and popularized. According to a study published in the National Library of Medicine, the working class is most likely to gamble — especially construction workers, vehicle drivers, and those who perform “monotonous manual indoor work.” At a time when the cost of living is rapidly rising and wages are remaining stagnant, workers appear to be turning to sports gambling as a way to supplement their meager incomes.

But just like playing the lottery or trying to win next month’s rent at the roulette wheel, sports gambling rarely guarantees economic salvation. Casino and sports-book revenue is on the rise, while bettors’ fortunes are not. In the first eleven months of 2022, gambling companies collected 113.5 percent of the revenue they did the year prior, signifying the increasing rate at which Americans were willing to wager. Given the increasingly dire financial state of the American working class, it’s more crucial than ever to examine the state of American sports betting to see what elements are worth preserving, and which need immediate correction.

Much like the end of the prohibitions on alcohol and cannabis, the legalization of sports betting has made it safer, prone to regulation, and taxable. Prior to the Murphy decision, sports betting had to be done illegally, unless there was a permitted casino nearby. Bets were placed either at an offshore book, which are known to not always honor winning bets, or with an illegal bookie, many of whom were tied to organized crime. In 2013, the FBI found that the notorious Gambino crime family made over $1.7 million in illegal online sports gambling in just nine months.

In this regard, legalization has been an unequivocal good, as it cuts off revenue from nefarious organizations and protects bettors from exploitation and physical harm. (As predacious as legal books can be, DraftKings won’t send a goon to break your legs for unpaid debts.) Additionally, much like the legalization of cannabis, sports betting has been a net positive for state budgets. In 2022, American states received over $1 billion dollars in taxes from sports wagering, which could fund education, health care, and infrastructure. Finally, there is the question of personal enjoyment. Though gambling is a vice that comes with some risks, that is not a reason to justify an archaic, religiously motivated prohibition. As socialists, we should seek to end ineffective government constraints, letting informed adults decide for themselves which activities they wish to pursue.

But as a half decade of legal wagering has shown, while Murphy was a net benefit, there is a dire need for increased government oversight of the gambling industry. As a consequence of the defunct American legislative system, the legalization of sports betting didn’t come from robust debate, public voting, or even an act passed by the legislative body. It was legalized by the Supreme Court, catching off guard those who weren’t avid court-watchers or already involved in betting. Suddenly, a potentially destructive activity was legal and being pushed on the American public by unrelenting capital.

With few federal regulations in place and almost no public education, many bettors were caught up in the predatory marketing, gamification, and hype of sports betting, losing thousands overnight. While researching this article, I asked bettors to share their experiences. Most responses involved people having fun with their friends online, working together to find good bets. Two respondents even claimed that they’d used winnings to buy houses. But for every few positive experiences, there was a heartbreaker. “It ruined my life,” said one man. Sports betting forums are populated with posts of addicts, begging for “locks” (the term for sure-win bets) so that they can pay their rent or get back the thousands lost. Perhaps most infamously, one bettor considered selling plasma to raise cash for their gambling habits.

With few federal regulations in place, sports books have accelerated this despair with predatory behavior, such as promoting bets to underage college students and misleading players with false promises of “risk-free bets.” This term is banned from gambling advertising in the UK, yet it is common in the United States, where sports books imply that new bettors can wager “risk-free,” up to $7,500 in some cases. Some states ban the use of the “risk-free” term, such as Ohio, which fined three prominent books for using it earlier this year, and Massachusetts, which investigated the Barstool Sportsbook for using the term “can’t lose” in its marketing. (Barstool’s lawyers defended the term, claiming that it was no different than the saying “buffalo wings.”)

There have also been several instances of sports books marketing to underage individuals, most notably on college campuses, where there is a thin line between encouraging betting on games played by underage college kids and encouraging underage college kids to bet themselves. You must be twenty-one to gamble in Louisiana, and yet Louisiana State University partnered with Caesars’ sports book to send marketing promotions to the school emails of underage students. Sports books are also known to limit, or even ban, bettors who win, while encouraging those who lose to keep playing. This practice is dubious at best, and should immediately be reviewed and outlawed by the federal government.

But the most devastating consequence of the shock introduction of legal betting is the severe lack of preparedness to deal with Americans’ gambling addictions. Without public education, like that surrounding drugs and alcohol, many Americans have gotten in over their heads. Caught up in the excitement, they soon find themselves down thousands of dollars, throwing good money after bad as they place huge sums on Chinese table tennis or Brazilian e-sports in desperate hopes of recouping their losses. Unlike alcohol and drug addiction, there’s no federally-funded research into or support for sports betting addiction, leaving states struggling to provide adequate assistance. The 1-800-GAMBLER number addicts are told to call is a private nonprofit that can only direct the caller to the nearest state resource, which might not even be in their state of residence. Since legalization in 2018, calls to New Jersey’s gambling addiction hotline have increased by 60 percent, overwhelming the system. Today, an estimated 2 percent of Americans struggle with some form of gambling addiction, a number that is sure to rise as sports betting grows in popularity.

There’s no denying that, like other forms of gambling, sports wagering can be devastating to those who are prone to addiction. And thanks to the disjointed, state-by-state oversight of legal sports betting, the United States as a whole is unprepared to deal with the tidal wave of capital encouraging more and more Americans to place their first bet. That is why it is imperative that sports betting be legalized and regulated by the federal government so that it can remain safe and legal, while adequate support can be provided to those caught in its addictive grasp. At a bare minimum, regulation is necessary to eliminate deceptive marketing, prevent underage gambling, and limit sports-book advertising, just as is done with tobacco. Additionally, there must be federal funding (paid for by the sports books, ideally) into the causes and cures of gambling addiction, as well as a nationally funded and readily available hotline for those who require help with their addiction.

It is natural for many, especially those who do not enjoy wagering, to look at the above problems and think that sports gambling should be banned entirely. But as this country has learned, prohibition seldom works. The short-lived Eighteenth Amendment birthed organized crime, the war on drugs has enabled mass incarceration and the formation of a police state, and the previous prohibition on gambling pushed bettors into the dangerous underworld. The challenges that American sports betting faces aren’t inherent to wagering, but rather the consequences of an ineffective legislative system that implemented change before the country was ready. With proper oversight and guardrails, American sports betting can shed its pitfalls to become a safe and enjoyable part of our culture.