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Sports betting — a hugely popular, multibillion-dollar industry — is poised to become an American epidemic

The country is all in on gambling, but the health and financial risks are bigger than ever.

That number will only increase when the MLB playoffs, NBA and NHL seasons get underway later this month into October.

It’s the sports betting industry’s favorite time of year: when America’s four biggest sports are all warming TV screens. Last year, the industry generated $4.29 billion in revenue on $57.22 billion wagered.

Through June 30 of this year, $3.04 billion in sports betting revenue was totaled — a pace that will shatter last year’s record. By 2025, according to Morgan Stanley, revenue could eclipse $7 billion. Other industry projections land in a similar ballpark, between $6 billion and $10 billion.

But there’s only so much track for this runaway train before the industry is forced to decide what to make of itself, said Timothy Fong, co-director of the Gambling Studies Program at the University of California, Los Angeles.

Sports gambling’s future, experts say, is irrevocably tied to public health, the economy, technology and sporting culture in America — a tenuous intersection of power and passion that, left unchecked, could have irreversible consequences.

LEGAL: In 2018, The Supreme Court reversed a decades-old law leaving a clear path for states to legalize sports betting

The floodgates for the sports betting industry opened in May 2018 when the Supreme Court overturned the Professional and Amateur Sports Protection Act (PASPA), which since 1992 had made sports betting — on the professional and collegiate levels — illegal in the United States, outside of Nevada.

In the four years that followed, sports betting became legal and live in 31 states. Five more states have voted to legalize sports betting, but the law has yet to take statewide effect. In Ohio, for example, the betting market is set to open Jan. 1, 2023.

Nearly $60 million has been spent — much of it by large Indigenous tribes — to support campaigns for Proposition 26, which, if enacted, will allow only tribal casinos to offer in-person betting. California casinos make up much of the $50 million campaign against Prop 26.

In contrast, BetMGM, FanDuel and DraftKings have spent over $160 million on campaigns in support of Proposition 27, which would legalize mobile sports betting in the state. $150 million has been spent in opposition.

There remain a few nuances with respect to the legal side of mobile betting. Though sports betting is legal in 31 states, mobile betting is legal in only 21 states. In Washington state, for example, sports betting is legal only in person on tribal casino property. In Montana, mobile betting can take place only when the user is physically inside a casino. Washington, D.C., has similar geographical restrictions — usage of the BetMGM app, for example, is restricted to within a few blocks of Nationals Park, the city’s MLB stadium.

ECONOMY: From TV commercials to superstar endorsements the jersey sponsors — sports betting advertising is lucrative and ubiquitous

As more states move to make sports betting legal, there has been no legal action to protect bettors or limit its growth, said Lia Nower, director of the Center for Gambling Studies at Rutgers University. This has been especially noticeable in the advertising industry.

In 2018, all eyes were on the NFL — “the big one” of America’s four biggest sports leagues — to see how it would integrate sports betting ads, said Adam Armbruster, a partner with ESA & Company who specializes in TV ad consulting. And unsurprisingly, he added, the league has become the most profitable and dominant in the American sports betting arena.

Over the 2020-2021 season, when it seemed like regulations would be set at a minimum, if at all, the top sportsbooks of FanDuel, DraftKings and Caesars Entertainment combined for over $1 billion in sponsorship revenue for the NFL. BetMGM, Fox Bet, PointsBet and WynnBet also signed commercial deals with the league.

The only regulations set were interestingly from the league itself, which capped the amount of in-game commercials advertising sports betting at six — a “good television marketing model that ensures you have a message every 20 to 30 minutes,” Armbruster said.

There have been limits placed on advertising in the past. Though technically legal by federal standards, alcohol commercials showing people actually drinking are subject to restrictions by television networks, Armbruster said. And American federal law continues to prohibit television commercials for cigarettes.

And when it comes to betting in general, federal law has, in the past, regulated how to talk about gambling. Because of the addictive element, Armbruster said, “in casino advertising, for a long time, you couldn’t say ‘win,’ you had to say ‘play.’”

There are no federal regulations on sports betting advertising, though states do have some power. Ohio, for example, will soon prohibit the phrase “risk-free” unless the sportsbook can actually back up that claim.

But many states haven’t yet acted — which is especially dangerous, Fong said, because these advertisements promote instant gratification, rather than a specific product.

“On social media, they will show a $10 parlay that made $180,000 and say that ‘this could be you, this is life-changing money,’” Fong said. “But in reality, this isn’t going to be you.”

Connor McDavid and Auston Matthews, the NHL’s two most recent MVPs, have deals with BetMGM and Bet99, respectively. Wayne Gretzky is an ambassador for BetMGM. Michael Jordan, NFL Hall-of-Famer Jerry Rice, U.S. Open champion golfer Bryson DeChambeau and race car driver Bubba Wallace have deals with DraftKings.

Some leagues promote these partnerships in increasingly conspicuous fashions. This week, NHL teams have begun revealing their jerseys for the upcoming 2022-2023 season, which, for the first time in league history, can include any advertisement — a 3-by-3.5-inch patch on the upper right chest, adjacent to their team logo.

Of the league’s 32 teams, at least three so far have revealed partnerships affiliated with gambling: the Arizona Coyotes and Gila River Resorts and Casinos; the Washington Capitals and Caesars Sportsbook; and the Vegas Golden Knights and Circa Sports.

The NBA, which approved jersey sponsorships beginning in the 2017-2018 season, has continued to prohibit bookmakers from participating in these deals. But money talks, Armbruster said, and every league is watching the others “wade into the water, judging the opportunity and public pushback.”

HEALTH: Is this the beginning of a gambling addiction crisis?

It took about a decade of physical and economic evidence from all across America — medical research, economic studies and pharmaceutical data — to attribute the opioid crisis of the 1990s to the introduction of Oxycontin to the market, Fong said.

With hindsight’s benefit, in 10 years’ time, he said, the legalization and growth of sports betting may very well be seen as the precipice for yet another national epidemic.

“It’s no different from air quality, water quality, tobacco or alcohol control,” he adds. “Gambling disorder is a public health crisis.”

When gambling is made more accessible, more people will participate. And with more people participating, it follows that more people will develop gambling addictions.

But compared with other types of gambling, like slots or table games, sports bettors tend to start younger, Fong said, and develop addictive gambling behaviors much quicker.

What remains to be seen, he said — especially as betting is easier than ever — is the severity of these new addictions, how sweeping their effects might be without proper treatment and how difficult it will be to pinpoint gambling as their root cause.

And a gambling addiction is not just about a person losing their paycheck and savings, said Fong. There are other health conditions that go along with it.

Those with gambling addictions are more likely to binge drink and smoke, Fong said, which will be difficult to attribute to gambling addiction, because they are addictions unto themselves. Suicide rates are also up among gambling addicts — a cause of death that is contained unto itself and not officially attributed to the root causes in one’s personal life.

So how will such a public health crisis, caused by gambling, be recognized? The “canary in the coal mine,” Fong said, will be socioeconomic depression.

“When you drive up financial difficulties from gambling, that affects your individual, family and community functioning,” Fong said. “More bankruptcy, more financial crimes, more financial debt.”

Those who enter treatment programs tend to be white, in their mid-40s, have about $25,000 in debt and smoke and drink more than the average person — the stereotypical demographic when many envision a gambling addict, Fong said. But in reality, he said, they represent only a fraction of the gamblers who actually need help.

“When you get down to it, the profile of someone with gambling disorder is anyone who’s human,” he said. “Like cancer, it cuts across the human scope and is a concern for all ethnic and cultural groups, multimillionaires and poor people.”

TECHNOLOGY: Mobile sports betting, though more restricted, means easy access

Experts agree that the easiest and most addicting form of sports betting is via mobile apps — DraftKings, FanDuel, etc. — which lure customers in with introductory deals (”First bet up to $200 free” and the like), offer customizable bets that in-person sportsbooks can’t provide (parlays or prop bets) and save users’ financial details for quick transactions.

“There is a real disconnect between you and your money,” said Nower. “A majority of these bets are funded through something like PayPal, or e-payments, so there’s even another barrier between you and actually understanding how much you’re spending.”

In New Jersey — which spearheaded the overturning of PASPA and is constantly battling with Nevada and New York as the highest-grossing state in sports betting dollars — 60 percent of all bets are placed on mobile phones. In most other states with unrestricted mobile betting, mobile bets make up between 70 percent and 90 percent of all bets placed, and between 50 percent to 85 percent of them lose, said Nower.

Much of the discourse on mobile betting comes down to the average age of sports bettors. Because sports bettors skew younger than other gamblers, the connection between the dopamine rush of gambling and those pleasure receptors that are activated by using mobile devices is “the top-priority issue in our research field,” according to Fong.

There is an argument that mobile betting could amount to nothing more than a fad, just as same-day fantasy sports — online, for-profit fantasy sports competitions that were most popular before 2018 and often flirted with illegality, with many saying that the platforms were, effectively, gambling methods — or especially internet poker, which has also waned in the public interest.

But Nower doesn’t think that the industry will be slowing anytime soon, thanks to the growing technological infrastructure and monetary incentive for states to allow — not restrict — mobile betting. This year, New York, the highest-grossing state for mobile betting, is on pace to generate $650 million in state tax revenue from these apps alone.

In her research, Nower has observed the behavior and betting relationships of those under the age of 35 — parents and their underage kids who share accounts; the broadcasts, halftime show scripts and on-screen tickers with betting odds that “are now inextricably linked in the minds of young people who are being primed to gamble,” she said.

In August, Jake Paul, the popular YouTuber and social media influencer, announced a new app called Betr, which pledges to “TikTok-ify” sports betting for younger generations. His vision entails combining social media content — including cameos and advice from athletes themselves — with wagering.

With a reported $50 million in seed money already for Betr, and Paul’s voracious online following — over 20 million YouTube subscribers, 17 million TikTok followers and a net worth of $30 million — it’s likely that some version of the platform will get off the ground and reach millions of young people around the country.

CULTURE: The rise in betting is changing how young fans engage with sports

Another reason why Nower thinks that sports betting, and mobile betting in particular, is here to stay: how ingrained and participatory it has become within the culture of American sports.

“There’s so much family history, pride and loyalty embedded in people for different sports teams, that when you superimpose this potentially addictive activity over your loyalty, it isn’t going to be easy to shake,” Nower said.

The rise of live, in-game betting facilitated by mobile apps is driving this impulsivity, Nower said. Betting lines are now still active, and changing, in the middle of games — something that in the past could only have been done illegally.

“We’ve created a world where we can enhance that experience of watching sports by adding in money, adding participation and capturing our attention because there’s more dopamine riding on it,” Fong said.

But will society ever reach a breaking point — where gamifying sports games starts to ruin what makes them fun in the first place?

A possible reaction, Fong said, is that more people — who lose their bets — will begin to think that sporting events are fixed — a reaction to the gambling industry rather than the opposite — and potentially stop watching.

“Gambling is not a reliable way of making money; it is not a solution,” Fong said. “At its core, it is supposed to be about entertainment. At its best, it makes watching games with your friends and family fascinating. At its worst, you’re pouring money and driving up debt, in isolation, and creating more emotional pain.”

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