In the last decade, sports gambling has grown tremendously in popularity, becoming hugely successful due to a reduced stigma, the rise of the internet, and changes in policies that allow companies like DraftKings to proliferate. In the midst of this growth, it is easy to forget that sports gambling is just as dangerous as traditional forms of gambling, destroying lives and families while garnering huge profits for its owners and their conspirators. In order to stop the growth of such a dangerous industry, it’s important to maintain awareness of the dangers of sports gambling and addiction.
The booming industries in the last 10 years are those that produce decade-defining products like artificial intelligence, electric vehicles, or vaccines. However, there is a category of unexpected dark horses: online betting companies like DraftKings, FanDuel, and BetMGM. Over the last five years, DraftKing’s revenue has increased by nearly 50 to 70% per year. This is an unbelievable growth rate. In 2017, the company was valued at $200 million, and in 2024, it is valued at nearly $3 billion, with a market cap of nearly $21 billion. For reference, Apple had an average growth rate of 12.75% over the last 3 years. This is an incredible jump for just seven years, a growth rate that makes Apple seem like a family-run Mom-and-Pop business.
The huge success of sports betting companies like DraftKings is in part due to changes in law. In 2018, a ruling by the Supreme Court, Murphy vs. NCAA overturned the Professional and Amateur Sports Protection Act, a law that effectively outlawed sports gambling. The official justification for the ruling was that state’s rights prohibited the federal government from directly interfering with sports gambling laws, but the real reason may be that sports betting is a lucrative industry with large amounts of tax revenue for the government, as we’ll investigate later. Before 2018, sports gambling was illegal in 49 states with the exception of Nevada. However, in the last six years, 38 states have legalized online sports betting and eight states have announced sports gambling as fully legal. The remaining four states, including California, have some form of ambiguous “dead laws” that prevent in-person sports betting but permit online sports betting.
In addition, sports gambling has managed to overcome the social stigma surrounding the practice of gambling, where the activity is seen as less harmful and more “fun” compared to traditional gambling. In 2023, nearly 63% of Americans had a positive opinion on sports betting.
This was not the case in the past, especially in the era of horse race betting. Classic novels like Anthony Trollope’s “The Kellys and the O’Kellys” show the negative archetype of a family man running his family into poverty due to a horse race betting addiction. But somewhere around the 21st century, this stigma towards sports gambling started to fade. Short-form videos across social media platforms show gamblers hitting it big, or internet memes so popular they inspired templates like the tongue-in-cheek “90% of gamblers stop before they hit it big” sparked this transition of sports gambling away from a life-ruining addiction towards a fun, trendy new thing.
Furthermore, a change in legality contributed to the rise of sports gambling. These policy changes were likely due to the fact that the state earns a hefty portion of revenue since all winnings are taxed as income — which can range up to almost 37% if payouts are high enough. On the other hand, sports betting companies like DraftKings only have an effective tax rate of about 5%, since they do count as a corporate entity. Sports gambling generated nearly $14.3 billion for the government in 2023. It’s also important to recognize this tax revenue partially comes at the cost of the average betting American’s loss. For example, the public has lost about an average of 40 billion dollars per year since 2018, whereas the government gained 14.3 billion. The individual greed of lawmakers also plays a role in the passing of these policies as well, as the American Gaming Association lobbied over 1.8 million dollars in the year 2023 alone. These are only the official statistics from OpenSecrets, and we can only imagine the sheer amount of money that gets passed through underground, possibly less-legal channels like campaign donations and political action committee money.
It might seem as if sports gambling is genuinely less dangerous than traditional gambling; if it’s so dangerous, why would lawmakers legalize it? Why would it blow up on social media? However, this is a myth that is simply not true.
Traditional gambling is dangerous because of two factors: it is addictive, and most players are mathematically guaranteed to lose money in the long run. Similar to normal gambling, “sports gambling stimulates the brain’s reward system in a similar way that substances can,” according to the Mayo Clinic. This process involves the release of dopamine on a scale similar to that of alcohol, tobacco, or even heroin, and has the same effects, including compulsive behaviors, loss of control, tolerance, and withdrawal.
Furthermore, the expected value of a blackjack hand is –4%, which means that on average, players lose $4 per $100. One common misconception about sports gambling is that the expected value is not negative, since both teams have an equally likely chance of winning, but companies can alter their betting lines and payouts. Typically, the expected value per bet is around -10% meaning for every $100 you bet, you lose $10, an even lower expected value than blackjack.
Americans have lost about $245 billion to sports betting since 2018. This huge amount of money might seem abstract, but it translates to lost mortgages, college funds, life savings, or simply hard-earned paychecks. Even the rich and famous are not exempt from the dangers of sports betting. Shohei Ohtani, a popular baseball player for the Los Angeles Dodgers, was recently involved in a gambling scandal where his translator was unveiled for betting on games that Ohetani was playing using Ohtani’s own bank account, a strictly prohibited move since betting on games a player is in would compromise the integrity of the sport. While Ohtani himself was not officially the one directly placing the bets, he is still under scrutiny for his gambling activity, as he met his translator over a table in Vegas. Jontay Porter, formerly of the Toronto Raptors, was recently sentenced to a life-long ban from the National Basketball Association for betting on his own games, losing his livelihood over his gambling habits.
The point of this is that gambling addiction is something that anyone can fall prone to, even the rich and famous. These are not just stories that happen to “other people”, but to people around us every day, and at an increasing rate, as nearly one in five Americans have bet on some form of sports in 2022, and while many of them don’t suffer catastrophic losses, they all lose in some form or another.
Sports gambling has taken a surprising and dangerous leap in the last 10 years. In order to stop the rise of such a dangerous industry, the general populace needs to recognize that sports gambling is no different from traditional gambling. As much as it sounds like a public service announcement, sports gambling is a serious threat to anyone, rich and poor, and people must be aware of the consequences, because underneath the illusion of safety or casual fun is a dangerous, life-ruining vice.
