May 23, 2018 by

At Least 20 States Ready to Legalize Sports Betting

The biggest news in the world of gambling continues to be the Supreme Court decision rendering PASPA void on constitutional grounds.  That has released the sports betting genie and commentary ranges from the effect of free games being streamed and the resulting loss of revenue for cable sports networks to an increased worry of problem gambling fomented by legal sports betting.

Great Britain

Although the new legal sports betting tsunami will occur in the United States, it is educational to see the difficulties legal online gambling sites in Great Britain have had with a program there called GamStop.  This program is in the category of a self-exclusion chance for gamblers who know or suspect that they have a problem.

The UK Gambling Commission warned the operators of online gambling sites that the commission had found serious defects in the GamStop system.  Gamblers whose telephone number, and email and home addresses were already on record at gambling sites could override GamStop simply by changing the name on the registration.

This indicates that self-exclusion is likely not the best solution to rein in problem gambling.  If self-exclusion doesn’t work, then either the gambling sites themselves or the regulatory bodies would have to step in and police the sites for problem gamblers.

Extrapolating the British experience with problem gamblers to the situation now developing in the United States we find that American sports bettors are already used to betting on sports illegally.  That was one of the results of PASPA which sought to protect professional and amateur sports from the pressures they would naturally face from legal sports betting.

If the legal sports betting sites or the regulatory agencies set up by the states that legalize sports betting try to eliminate problem gamblers from betting on sports, it will simply send these gamblers back to the illegal bookmakers they had used all along.  In other words, legalizing sports betting in the US, might result in an illegal underground of illegal problem gamblers.

FOBT

Fixed odds betting terminals have become pervasive in Britain and the government saw them as an attraction that led many players into problem gambling.  The government has thus shut them down.  This has united political forces that are almost always opposed to each other.

The fact that left and right wing politicians are united against the government in this issue means that problem gambling, despite being recognized as a serious public matter, is less important to than allowing gambling to continue and to thrive.

Sports Betting

In the United States, the individual states still have a great deal of political and regulatory power and the Supreme Court decision was based on that simple constitutional fact.  One big question for every state that decides to permit sports betting will be whether to allow it only at land based venues such as existing casinos, or to allow it online as well.

GamStop was created as a way to stop problem gambling online and especially via one’s mobile device.  Mobile allows us access to virtually anything we want whenever we want it.  That convenience and accessibility includes gambling.  So, GamStop was developed to combat problem gambling on mobile devices.  But the report as mentioned above is that GamStop is not stopping enough problem gambling.

States that are well on their way to legalizing sports betting are talking about allowing it only at land based venues.  This leads inevitably to the observation that most sports betting will remain illegal simply because gamblers can’t always get to a land based betting establishment so will bet by telephone as they do now.

Taxes

This is ironic because the real reason US states want to legalize sports betting is because there is so much tax revenue to be had from legal gambling that is today not paid to the government from illegal sports betting.  So, by allowing legal sports betting only at land based sites, governments would be, essentially, giving up on millions of dollars of potential tax revenue because they don’t know how to collect it from online sites.

Doomsday Scenario

An American gambling addiction counselor, Arnie Wexler, who fifty years ago cured himself of a gambling addiction and has not placed a bet since, worries that the new easing of restrictions on sports betting will cause an “epidemic” in new cases of problem gambling.

He cites the change in gambling behavior before New Jersey passed a state lottery law and after.  He says that the number of people betting on illegal lotteries before they were legalized was about 30%.  The percentage of people betting on legal lotteries came to about 80%.  His fear is that legalized sports betting will attract many gamblers who had never placed an illegal sports bet but now, with sports betting legal, will bet and become addicted.

The American Gambling Association, an industry organization, estimates that if sports betting is allowed online, there are about 28 million Americans who today don’t bet on sports but would be drawn to it.

No one knows for sure but the number of gambling addicts in the US today is estimated as between three and five million.  An influx of 28 million new gamblers could double the number of problem gamblers in such a short time that neither private nor governmental institutions whose role is to help people deal with and overcome gambling addiction would be overwhelmed.

Political Problem

Americans may be more zealous in protecting their personal freedoms than people in other countries.  On the other hand, Americans are also “addicted” to government intervention in social and personal problems.  So, we may see vast, strict regulations of sports betting in many American states.

That they would be effective is far from certain.  They may recreate the underground multi-billion dollar illegal sports betting “industry” even as it wants to raise needed tax revenue.