An Unsafe Bet

You can’t turn on a game, of any professional sport, at any time, and not be immediately inundated with the betting line. Open the ESPN or other sports app and you’ll be greeted with the spread for upcoming games. Pull up a podcast about sports and you’ll hear about prop bets, parlays, and daily options. “Risk-free” first bets invite first-time users to dip a toe in with the promise of free money and the ability to not just watch a game, but be “part of the action.”  

Five years after online sports betting was legalized by a Supreme Court decision, advertisements are ubiquitous, and growing. In 2023, one of the largest online sports betting websites, DraftKings, spent over $1 billion in ads. Many of their competitors aren’t far behind.

Those ads appear to be working: In 2023, Americans wagered a whopping $119 billion in online sports gambling, earning the industry nearly $11 billion in annual revenue. One estimate has that number increasing to $37 billion by 2025. A poll conducted earlier this year found that nearly 40% of people aged 18-49 had placed an online bet on a sports competition. Roughly the same percentage of men, along with 20% of women in the poll, have an online betting account. 

For millions of those Americans, sports betting has become like many other pastimes: Sure, it may cost some money, but it isn’t much, and you get the rush of having more skin in the game. And maybe you’ll even win it big.

But for a sizable and growing number of Americans, sports betting is no harmless affair. A recent study found that, when states legalize sports betting, credit scores drop, while auto loan delinquencies and bankruptcies increase. Calls to Michigan’s gambling helpline more than doubled in just two months after the state legalized the practice.

The consequences of legalization are especially harmful for those with lower incomes. As a study recently highlighted by the author Aaron Renn notes, online sports betting is correlated with a significant reduction in household savings. “These effects concentrate among financially constrained households,” the study’s abstract explains, “who become further constrained as credit card debt increases, available credit decreases, and overdraft frequency rises.”

Young people are particularly susceptible to getting in over their skis. A recent survey of 18-22 year olds highlighted by Time found that “nearly 60% have bet on sports, and 4% do so daily. Almost 6% reported losing more than $500 in a single day.” The National Council on Problem Gambling estimates “that nearly 6% of college students also have a gambling problem,” a figure “nearly double the national average for U.S adults.”

And the dangers of sports betting aren’t just to the bettor. Writing in the Atlantic, Charles Fain Lehman cites new research that suggests legalizing online sports betting has led to an uptick in domestic violence: 

A third recent paper, from the University of Oregon economists Kyutaro Matsuzawa and Emily Arnesen, shows another, perhaps more surprising—and certainly more harrowing—harm of gambling legalization: domestic violence. Earlier research found that an NFL home team’s upset loss causes a 10 percent increase in reported incidents of men being violent toward their partner. Matsuzawa and Arnesen extend this, finding that in states where sports betting is legal, the effect is even bigger. They estimate that legal sports betting leads to a roughly 9 percent increase in intimate-partner violence.

One reason the current incarnation of online sports betting has so many consequences is the ease of access. Across numerous apps, users can bet with a single click, from the comfort of their couch, as many times per game as they choose, for as much money as they have available on their credit card.

And that isn’t helped by the omnipresent nature of sports betting ads. Reams of psychological research shows that ads, particularly targeted ones, work. That’s especially true for betting. A study of addictive gamblers from 2017 found that they were particularly likely to respond to ads.

But what can be done about online sports betting? Is the genie out of the bottle, at least in the majority of states who have legalized it?

Given America’s reluctance toward morality laws or prohibition, it’s politically unlikely that online sports betting will be outlawed where it has already been legalized. But even lacking a digital prohibition, there are steps we can take to rein in the practice.

States can increase enforcement against the legal abuses of some of the major sports betting companies. That includes deceptive ads around “risk-free” first bets that aren’t, in fact, risk-free. “Free bets” can’t just be withdrawn from the app by the bettor. The amount must be wagered again on a new bet before it can be converted into U.S. dollars. In response, Ohio sued DraftKings and other apps who were blanketing the airwaves with these deceptive offers. Numerous other states, including Massachusetts and New York, have filed similar suits. More laws to crack down on these deceptions could go a long way.

But given the patchwork of state laws, a better long-term solution might be federal action. A new bill in Congress, the SAFE Bet Act, would rein in ads: banning in-game advertisements and “bonus” and “no-sweat” bets while restricting how AI can be used to track and generate targeted ads. It would bar the use of credit cards for online sports betting sites, a commonsense approach considering most casinos don’t accept credit cards, thereby preventing someone from incurring new debt to make bets. And the bill would limit the amount of money one person can place in online bets within a 24-hour window.

Thus far, Democrats have taken the lead on reforming online sports betting, but conservatives would be wise to pay the cause more attention. While the “Barstool” contingent of the Republican Party is focused on appealing to young men’s most base instincts, a conservative movement worth its name would be interested in directing that energy to something—anything—more constructive.

In addition to keeping young men from emptying their wallets in a digital casino, reforming online sports betting and its associated advertising would improve the fan experience, decluttering screens and commentary both oversaturated with betting content. It would also help break the growing normalization of connecting sports and gambling, particularly for younger Americans. 

Sports like football and baseball are great American pastimes. Gambling will always be part of the story, but that doesn’t mean that viewers should feel frog-marched into a digital DraftKings casino every time they turn on their favorite team.