This summer, Dylan, a 22-year-old trainee lawyer from the Jersey Shore, made the brave decision to confess his shameful secret to his family and friends: he had borrowed and gambled $50,000 in just over a year. His journey into gambling began with a promotional deal on the DraftKings betting app during last year’s Super Bowl. By betting $5 on the eventual champion, Dylan won $300 thanks to a last-minute touchdown by the Los Angeles Rams. This initial success sparked his interest, and he went on to quadruple his winnings by playing online blackjack. However, Dylan’s bets soon became riskier, leading him to max out four credit cards and place bets of up to $5,000 on various sports matches, even obscure tennis fixtures in China and Venezuelan women’s volleyball matches, using apps like FanDuel and Barstool Sportsbook. He eventually realized he needed help and turned to Gamblers Anonymous to overcome his addiction. Opening up to his family was a pivotal moment for Dylan, and he believes it was the best decision he could have made.
Dylan’s story is just one example of the growing number of problem gamblers emerging alongside the booming regulated online betting industry in the US. Since a landmark Supreme Court ruling five years ago that overturned the ban on sports betting, online gambling has skyrocketed, generating over $12 billion in revenue in 2022. Advertising for these platforms has become increasingly pervasive in American cultural life, with even Disney-owned sports channel ESPN planning to launch a sportsbook. Currently, people in 34 states and Washington DC can legally bet on sporting events, and 25 jurisdictions allow online betting. In total, Americans have wagered $245 billion on sports since 2018. However, as the industry thrives, there is a hidden underbelly of addiction of unknown proportions. Limited nationwide data suggests that 6% of people in New Jersey, the first state to approve sports betting and online gaming, are problem gamblers, and up to 20% exhibit signs of problematic play. Similar findings have been observed in Pennsylvania, where 36.7% of online bettors reported experiencing at least one problematic element of their gambling habits in the past year. This surge in addiction is evident in the increased traffic to helplines, such as the National Council on Problem Gambling, which experienced a 21% year-on-year rise in calls and texts in March.
The current landscape has left experts concerned about a potential “regulatory Groundhog Day” similar to what occurred in the UK after the liberalization of gambling laws coincided with the rise of smartphones nearly two decades ago. The UK quickly became the world’s largest regulated online gambling market but experienced a surge in problem gambling and related suicides, leading to a regulatory crackdown and hefty fines for operators. Now, the US has surpassed the UK as the largest regulated online gambling market, and there is a risk of repeating the same mistakes. Lawmakers, like Rep. Paul Tonko, warn of a looming “public health crisis” unless the federal government intervenes, even comparing it to the response to smoking as a public health issue. Tonko has proposed a bill to ban all electronic and online sports betting advertising.
Currently, the online betting industry in the US operates under a patchwork of state regulations, with little federal oversight and limited consumer protections. For example, most of the states with regulated online sports betting have no restrictions on using credit cards for gambling, and there are minimal requirements for operators to provide tools for self-limiting deposits, wagering amounts, or gambling time. Only a handful of states offer self-exclusion programs for problem gamblers, and some jurisdictions require the bettor to self-exclude in person. Despite the potential harms, state authorities often grapple with the conflict of generating tax revenue from sports betting. For instance, New Jersey, a state that has been viewed as a model for regulation, recently became the first to mandate operators to monitor user data for signs of problematic play. However, the approach varies from state to state, with some prioritizing consumer protections and others neglecting them.
The aggressive promotional strategies employed by betting companies have also come under scrutiny. DraftKings, for instance, was fined $500,000 in Ohio for various offences, including mailing adverts to underage individuals and using the term “risk-free” in their marketing materials. Barstool faced scrutiny over a gambling promotion titled “Can’t Lose” in Massachusetts, prompting its withdrawal. Sports leagues such as the NBA and NFL have formed a coalition to advocate for limitations on betting commercials, given their ubiquitous presence. However, proponents of the industry argue that concerns about advertising are based on unfounded assumptions about underage gambling. They believe that the backlash against advertising is exaggerated and fail to acknowledge the existing safeguards against underage gambling.
To prevent further harm, some states, like Ohio and Massachusetts, have taken action against misleading advertisements and implemented stronger consumer protections. However, there is a clear divide between states that prioritize resources for preventing and mitigating problem gambling and those that do not. It is crucial for the US to learn from the UK’s experience and avoid repeating the same mistakes. With the potential for the industry to become a public health crisis, calls for federal intervention and stricter regulations are growing louder. Without appropriate measures in place, the US gambling industry risks spiraling out of control.
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