The new sports betting industry has been touted as a rousing success story in America. In five years, sporting bets, which were once prohibited in almost every US state, have been legalized in more than half of US jurisdictions. This gives the majority of America’s population the chance to place bets at online casino sportsbooks and at retail casinos with Fair Go casino bonus codes and other promotional giveaways.
Now, a new investigative report by the New York Times casts a shadow over that assumption. In a four-part series of articles, the Times has brought attention to some of the questionable practices that the sports betting industry has used to expand so quickly.
The articles question the tax structures used by the different states, efforts to market to young people, lack of responsibility in the field of advancing responsible gaming practices and lobbying practices that influence new sports betting laws and regulations in a way that may be detrimental to society.
Sports betting’s rapid growth is outpacing the growth of any other type of legalized gambling. To date, 31 states and Washington DC have legalized and regulated either and/or retail and online sports wagering, and five additional states are expected to launch sports betting in 2023.
Pushback
The NYT series is causing some legislative pushback. In New York, legislation has been introduced to restrict some types of advertising. In Kansas, Governor Laura Kelly, who backed online sports legislation for the state, said that “unintended consequences” of sports betting in Kansas have caused her to revisit aspects of the new law.
Administrators and students at several universities are looking at deals that the universities are making with sports betting operators that will allow the operators to promote sports betting on campus.
Gaming regulators in Massachusetts have put an application by Penn Entertainment for a sports betting license on hold because of Penn’s relationship with Barstool sports whose founder has been accused of sexual impropriety.
Lobbying Practices
A significant portion of the article focused on Kansas where gaming operators’ lobbyists showered legislators with gifts and money. Perhaps not coincidently, the sports betting industry was granted a variety of lucrative goodies in Kansas including a provision that sets aside 80% of sports betting tax revenue to pay for the construction of a professional sports stadium in the state.
Real estate developers who owned land near the intended site for the stadium requested that provision which was inserted into the sports betting legislation at the last minute. Brianna Johnson, spokesperson for the governor, said, “Governor Kelly agrees there are aspects of the sports-betting legislation that could be improved, including the stadium fund.”
Sports betting has been operating legally in Kansas for 2 months and already, the NYTs article noted, over $43 million in tax-free bets were gifted to new bettors by the sportsbooks’ operators.
Those risk-free wager offers are deducted from gaming companies’ taxable revenue which has enraged many legislators, not only in Kansas but also in New York where companies have been using “free bet” offers to encourage bettors to set up sports-betting accounts on their sites.
NY Senator Pete Harckham sees those offers as predatory. “You can’t turn on the radio or can’t turn on any sporting event without being inundated with offers of free bets,” Harckham said, comparing such come-ons to handing out free samples of drugs to entice people to buy more.
Universities
Even more troubling was the Times’ revelation that at least eight universities including the University of Colorado in Boulder, Louisiana State University and Michigan State University have partnered with sports betting companies with agreements that allow the operators to reach out to their students and sign them up as customers.
U.S. Senator Richard Blumenthal of Connecticut is urging both the gaming operators and the universities to terminate the contracts. In a letter to Caesars Entertainment, which has partnered with at least 2 universities, Blumenthal wrote, “This potentially addictive activity, aimed at young people, some of whom are not of legal age to participate, is unconscionable. Young people should not be targeted by sports-wagering advertisements, and Caesars’ deliberate marketing towards college-aged students cannot continue.”
Caesars reportedly offered Michigan State as much as $8.4 million for a five-year deal that would allow Caesars Entertainment to promote gambling on campus.
Responsible Gambling
The sports betting operators are taking the accusations seriously. Caesars Entertainment has put a 1-800 helpline number for Gamblers Anonymous on slot machines.
Other casino companies are making information available that describes responsible gaming policies, practices and programs and provides information that explains where people can go for assistance.
The American Gaming Association (AGA) has opened a “Have a Game Plan” sports betting program that involves partnerships with sports leagues and teams to promote responsible wagering habits.
According to the AGA, its research shows that 92% of sports bettors are familiar with responsible gaming tools.
Taken by Surprise
The NYT speculates that part of the problem stems from the fact that the rise of the sports betting industry happened so quickly. Consumers were overwhelmed by choices and opportunities, while states were overwhelmed by the possibilities that the new revenue sources presented for cash-hungry state coffers and the result was that gaming companies have been given free rein to promote and deliver their products with little regard to protections for consumers.
The Times notes that “some states have been so eager to get gambling up and running that they have allowed companies to begin operations before comprehensive reviews of their backgrounds and practices have been completed.”
Punishments for infractions are light or non-existent, as in the case of Iowa and Tennessee where operators allowed bettors to fund their accounts with credit cards even though such transactions had been outlawed by the state.
The gaming operators can’t be expected to police themselves, as demonstrated in Indiana where, an investigation revealed, multiple people who had enrolled in a program that blocks them from placing bets were able to continue to wager.
In Colorado, temporary licenses were granted to sports-betting businesses, even though the required criminal background checks of the operators were never run. And nationwide, calls to a national hotline for people with gambling problems rose 43% between 2021 and 2022. Interestingly, online slots betting in Canada is massively popular just North of the border and companies are being granted licenses in new regions like Ontario.
Today, the sports betting industry uses artificial intelligence and sophisticated targeting techniques to pursue potential and existing customers with offers that are tailored to their patterns of use and to their interests.
Individuals can’t be expected to struggle against this type of aggressive marketing, say critics, and unless some type of regulatory framework arrives, gaming companies will continue to be this game’s biggest winner.