Monday, June 17, 2024

As Sports Betting Proliferates, Incidence Of Gambling Disorder Rises

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As gambling on sports proliferates across America, there are record-breaking profits for the betting companies and a tax revenue windfall for state governments. But at the same time the number of people with a gambling disorder is rising.

Since a Supreme Court ruling in 2018, legal sports betting has taken off in the U.S. Thirty-eight states have passed laws to allow gambling on sports while another six are considering it. More than two-thirds of American adults (roughly 164 million) now live in a legal sports-betting market.

The American Gaming Association earlier this year released a report on the industry’s financial performance for 2023. For the third consecutive year, the commercial gaming industry has set a new revenue record. Total revenue from casino games, sports betting and iGaming reached $66.52 billion, a 10% increase over the previous record set in 2022.

The sports betting frenzy is fueled by partnering ventures, which include celebrity influencers, sponsorships in professional sports and sporting events, as well as television networks, radio and online media outlets.

Advertising and marketing campaigns are ubiquitous. They blanket the airwaves and social media sites. Commercials often flaunt “risk-free” bets, with former athletes promoting gambling companies.

Access to gambling has been facilitated by online apps. Practically all betting nowadays can be done from a person’s smartphone. And a money line bet is perhaps the most popular and certainly simplest forms of sports wagers as it’s placed on a game’s outcome: Which team or competitor will win a given game, match or race. With this particular kind of bet there is no point spread or other factors involved.

Increase In Incidence Of Gambling Disorder

While many people, young and old, like to bet on sports and are increasingly able to do so legally the incidence of gambling disorder is hitting an all-time high. The National Council on Problem Gambling estimates that approximately 2.5 million adults in the U.S. are severely addicted to gambling, and another four to six million people have mild to moderate gambling problems.

The American Psychiatric Association and the American Medical Association recognize pathological (or “compulsive”) gambling as a diagnosable mental disorder, characterized by a preoccupation with wagers, not being able to cut down or stop, gambling repeatedly beyond one’s means, borrowing money to finance the habit or chasing after losses by betting more.

Like any other addictive condition, a gambling disorder can impact a person’s physical and mental health.

Newsweek reported last year that the ease of access to new gambling options has corresponded with an enhanced risk of a person experiencing serious gambling problems, including addiction.

This appears to disproportionately afflict young male adults. Compulsive gambling habits can lead to mounting loans, credit card debt, and pressure to borrow or steal. Worse still, among addiction disorders, gambling has a comparatively high suicide attempt rate.

Several statewide surveys have shown increased numbers in the incidence and prevalence of gambling disorder since 2018. And nearly every state in the U.S. has seen increased demand in recent years for treatment services related to problems caused by gambling.

Currently there is no federal funding to treat gambling disorders. But Senator Richard Blumenthal of Connecticut wants to change that. In January, he introduced the Gambling Addiction Recovery, Investment, and Treatment Act which sets aside federal funds to help prevent, treat, and study gambling addiction. On Twitter, he spoke of companies’ “exploiting their troves of real time data and algorithms to hook vulnerable users.”

Congressman Tonko’s Crusade

Senator Blumenthal isn’t alone in trying to address issues related to gambling. Congressman Paul Tonko of New York was the first lawmaker to formally raise concerns when he introduced the Betting on our Future Act in February of last year. This legislation would ban all online and electronic advertising of sports gambling.

Though state laws do not allow advertising to target audiences under the age of 21 in sports wagering, gaming or related activities, Tonko asserts that ads pose a particularly dangerous “threat to young adults unaware of the risks involved in gambling, and to individuals prone to addiction.”

Moreover, despite most jurisdictions requiring advertisements to include messages that encourage responsible gambling and helplines for problem gamblers, Tonko believes that the sports betting industry has been operating since 2018 in a “Wild West, largely unregulated environment,” which is creating a “massive and growing public health crisis involving a known, addictive product.”

Tonko also announced this spring that he intends to introduce another piece of legislation soon that, if passed, would place severe limits on the way online sports betting companies market to and interact with their customers. Though not formally introduced yet, Tonko has dubbed his planned proposal the SAFE Bet Act. It would ban sportsbook advertising during live sporting events, not allow language in advertisements that includes terms like “bonus” or “no sweat” bets, cap the number of deposits to a gambling operator from a single customer to five within a 24-hour period and prohibiting the use of artificial intelligence to track a player’s gambling habits.

Given the vested interests that state governments have in tax revenue, Tonko’s proposals may not garner a lot of support among colleagues. Many politicians on both sides of the aisle have said that the legalization of gambling provides states with much-needed additional income.

Moreover, critics of the legislation introduced last year maintain that it infringes upon “speech,” arguing that sports gambling advertising is protected as a First Amendment right.

This said, there is precedent for (selectively) banning advertising. In fact, Tonko’s 2023 proposal is modeled after the Federal Cigarette Labeling and Advertising Act, which prohibited tobacco advertisements on certain media, beginning in the 1970s.

Lessons From European Situation?

For now, Tonko’s proposed law from 2023 and his intention this year to establish another piece of legislation are still far from being enacted.

Interestingly, as the U.S. advertising blitz is in full swing many nations in Europe are moving to place strict limits on promotions or abolish gambling ads altogether. Perhaps the experiences of other countries with legal gambling offer clues to where the U.S. could be headed at some point. Throughout Europe government authorities are clamping down on gambling commercials, sponsorships, and the participation of celebrities in ad campaigns.

In the U.K., which has a long tradition of legal gambling, mobile betting became legal in 2005. But very recently the U.K.’s Committee of Advertising Practice banned betting advertisements that feature former sports stars and social media influencers. In addition, betting firms are now prevented from including teams’ official uniforms and stadiums in ad campaigns, as well as showing video game content. These rules apply to broadcast media, online and in print publications, as well as billboards and posters.

Beginning in 2021, members of the Dutch Parliament started calling attention to the potential dangers of gambling addiction, particularly in young adult men. In the Netherlands, all advertising and sponsoring of online gambling is now prohibited. Furthermore, in 2022 the Dutch Parliament barred (former and present) sports celebrities from taking part in promotions for online betting.

Belgium is cracking down on gambling ads as it seeks to prevent what government officials deem is the “normalization and trivialization of gaming and betting.” The decision came amid what the Justice Minister called a “tsunami of advertising.” The government has banned gambling ads from television and radio and from websites and social media platforms.

As an increasing number of European nations aim to corral gambling promotion and address the pastime’s underside, it remains to be seen if there will be a similar movement in the U.S. Will proposals, such as the ones Representative Tonko and Senator Blumenthal are sponsoring, get sufficient support for passage?

The rise in opportunities for sports betting appears to have contributed to a surge in people suffering from gambling addictions. It’s unclear whether this will lead to legislative changes to curb advertising practices and offer federal assistance to help treat problem gamblers.

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