The Hidden Costs of America's Sports Betting Boom

Sports betting has been around, arguably, since sports began, going back to the original Greek Olympics and the Roman Coliseum activities. Fun fact: the first lottery in the UK helped fund the expedition that founded the Jamestown Colony. Bookies have been around since the late 18^th Century. Among the famous is “Lefty” Rosenthal, born and bred in Chicago and Wrigley Field; his life story was the subject of Casino. And Victor Chandler, the first to make sports betting “legal” using the Internet and offshore accounts. 

However, the prohibition on sports betting can be traced back to this moment.

"One of the game's greatest players has engaged in a variety of acts which have stained the game, and he must now live with the consequences of those acts. By choosing not to come to a hearing before me, and by choosing not to proffer any testimony of evidence contrary to the evidence and information contained in the report of the Special Counsel to the Commissioner, Mr. Rose has accepted baseball's ultimate sanction, lifetime ineligibility." 

– A. Bartlett Giamatti, Major League Baseball Commissioner

Shortly thereafter, the Professional and Amateur Sports Protection Act (PASPA) was introduced, backed by the NCAA, major professional sports leagues, and Senator Bill Bradley, formerly of the NBA. It passed overwhelmingly and was signed into law in 1992 - prohibiting states from legalizing sports betting by forbidding them from altering their gambling laws.

In 2018, the US Supreme Court ruled on PASPA’s constitutionality, finding that PASPA violated the anti-commandering doctrine of the 10^th Amendment - that the federal government cannot require, “commander” state resources and officials to achieve federal objectives. The practical result was to allow states to determine their policies on sports betting. The number of states allowing sports betting and the District of Columbia rose from 2 to 38. $1.39 billion was bet on the 2025 Super Bowl. However, the flood of money to the states, bettors, and “books” has a downside explored in a new study in JAMA Internal Medicine, gambling addiction. 

The researchers’ proxy for gambling addiction were searches on Google for several keywords. [1] Information on sports gambling came from the American Gaming Association; the researchers identified the eight largest states with sports betting for at least 12 months – Massachusetts, Michigan, New Jersey, New York, Ohio, Pennsylvania, and Virginia.

Sports betting has grown quite a bit since 2018, from $6.6 billion to $121 billion in 2023, and those wagers are increasingly using the “book” or platform we frequently carry around online betting apps. (Victor Chandler was on to something!) Here is a bit of what they found.

• Except for the time around the COVID-19 pandemic, national searches seeking help for gambling addiction increased following Murphy v. NCAA
• Searches from 2021 onwards have risen by more than 20% higher than expected annually
• Approximately 6.5 to 7.3 million searches for gambling addiction help-seeking occurred
• The states with the eight largest statistically significant increases were led by Pennsylvania, with a 50% increase, and Virginia’s 30% increase was the smallest. The findings in the early part of 2024 show those increases continuing to rise.
• New York and Pennsylvania recorded their highest monthly search volumes after the introduction of online sportsbooks, 50% and 61%, respectively.

The researchers suggest that these rising numbers of gambling help searches are a reasonable proxy for problematic gambling, making this a public health issue. They argue that problem gambling shares a neurobiology with substance use disorders and is accompanied by depression, bipolar disorders, and suicidal behavior. There are additional social impacts, fractured personal relationships, and higher rates of bankruptcy, unemployment, and homelessness. 

Channeling a common refrain when discussing sin taxes, “the delayed regulation of the tobacco industry … as a cautionary tale,” the researchers note that despite the massive revenue generated by legalized sportsbooks, states rarely earmark a meaningful portion of the tax revenue to address the ensuing health costs. Most states allocated less than $1 million, with 20 states spending under $400,000 despite collecting ample revenue from sports wagers. 

The researchers draw from the usual public health playbook recommending:

• Preventive education, especially targeting high-risk groups, e.g., young men.
• Advertising restrictions
• Age limit increases from 18 to 21. Of course, it is difficult to tell your age on the Internet.
• Online Interventions: Integrate and expand effective online help resources into sportsbook platforms. But can we count upon businesses to safeguard our interests when studies have shown those at most risk for problem gambling are among their best customers?

Who is at risk?

Data from the National Council on Problem Gambling, the oldest NGO dedicated to this topic, indicates that gambling problems among sports bettors are at least two-fold greater than gamblers in general. And for online sports gambling, the rates are even higher, with one study of online sports gamblers indicating that 16% met clinical criteria for gambling disorder. 

A study surveying 311 college students (68% males, average age 20.8 years) found that 75% had previous experiences with sports gambling. The survey looked at several areas of behavior regarding sports gambling, including their attitude, motivation to respond to peer pressure, perceived ability to control their behavior, impulsivity, and problem sports betting behavior. They found that an individual is more likely to engage in sports betting:

• If they have a positive attitude towards sports betting, a critical feature as generally, people find loss harder to emotionally manage than gain, making betting, with its potential downside, a significant negative. Younger adults tend to find betting “fun” and frequently overestimate their chances of winning. Overestimation of winning is a critical predictor of problem gambling.
• They are surrounded by significant others who are supportive of sports betting. These young adults remain susceptible to the peer pressures they have recently left, not so behind, in high school.
• And believe they can control their betting behavior. Some also evidence more impulsive behavior, “chas[ing] their losses and bet more than they can afford, especially when they bet online.”

The combination of youth, a bit of impulsivity, and a mobile app that focuses your attention on betting is the perfect storm. Perhaps we should focus on regulatory efforts on those apps requiring them to verify, in a real way, the age of the users. Or, better yet, since money is moved from online bank accounts to apps, banks can do the heavy lifting and verify the age of the account holders. Maybe, and this is conjecture on my part, the Know Your Customer banking regulations [2] would be a ready tool. 

The meteoric rise of sports betting has transformed it into a multibillion-dollar industry that touches nearly every corner of society. Yet, as states reap vast tax revenues, the investment in mitigating the associated harms—ranging from gambling addiction and mental health issues to social instability—remains woefully inadequate. Bridging this gap requires new public health strategies that protect its most vulnerable participants, ensuring that the thrill of the game does not come at an unsustainable human or societal cost.

[1] For example, gambling and addiction, am I a gambling addict, or gambling addiction hotline.

[2] Financial Industry Regulatory Authority (FINRA) Rule 2090, in response to money laundering and concerns over terrorism funding, requires financial institutions to use due diligence to identify and retain the identity of every customer or person acting on behalf of those customers. 

Source: Growing Health Concern Regarding Gambling Addiction in the Age of Sportsbooks JAMA Internal Medicine DOI: 10.1001/jamainternmed.2024.8193