Will Online Sports Betting Kill America?

In the 1989 science fiction film Back to the Future II, the character Biff uses a 50-year sports almanac of future outcomes to gamble his way to wealth and power. In doing so, he created a world that appeared lawless, filthy, and materialistic.

Is sports betting, especially online, leading our nation down a similar path?

It’s almost impossible to follow a professional sport or even a college sport online without being graced with opportunities to place a bet.

ESPN, the leading sports media company, offers odds for all professional and collegiate games on its website. It also offers support for fantasy sports and gives information and tips to fantasy athletes. The CBS Sports and Fox Sports websites offer similar information and opportunities.

Sports bettors lure people in with offers of free bets to win their business. However, there is no “free lunch” in any type of gambling, and anything offered as “free” gives the companies a positive net return or they would not offer it.

Sports betting companies are profitable not by picking teams that win games, but by balancing the bets on each team. When bets of $100,000 are placed on each team in a game, their profit is made up of the spread taken from the winners. If they even the bets in each game, they emerge victorious. This requires them to manipulate the points given to the underdog to maintain that balance and increase their winnings.

For the majority of the population, gambling receives little attention or is used for casual entertainment. Still, such people cannot increase betting volume to keep online sports betting companies in business and profitable. What is needed are gambling addicts who gamble frequently.

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The mission of the National Council on Problem Gambling is to mitigate the harm caused by gambling. In the United States, there are on the order of 10 million Americans with gambling addiction, or about 4 percent of the adult population. Online sports bettors have a vested interest in increasing this number by encouraging young people, particularly young men in college, to gamble. Creating a culture that normalizes sports betting will nurture a generation of potential gambling addicts.

Gambling companies support publicly responsible gaming. But such support rings hollow when sent to people with gambling addictions.

Colleges working with online sportsbooks are part of the problem.

In 2020, PointsBet partnered with the University of Colorado. Their five-year contract creates bridges between the two entities and gives the company visibility on campus when recruiting potential employees. This is something other companies are looking for. The problem is that PointsBet’s business is gambling, making their presence on campus an easy transition to being the sportsbook of choice at the university and even the state.

In December 2021, SportsBet initiated a marketing agreement with the University of Maryland, although state legislatures are working to end such an agreement.

In contrast, FanDuel takes a different approach by not partnering with college campuses. You also protect yourself from legal liability in the event of future lawsuits.

Online sports betting has become ubiquitous. The ease with which bets can be placed using smartphones makes them accessible 24/7 to anyone interested. This means that gambling addicts have the “drug of choice”, namely bets, available around the clock.

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Is there a solution?

Legislation won’t work. Some states have attempted to limit what can be played online. Unfortunately, such efforts are like using an umbrella in a hurricane.

Any solution must come from the online sports betting providers themselves. Expecting personal restraint from gambling addicts is not only unrealistic, it is also naïve.

Given the huge profit potential at their disposal, online sportsbooks are unlikely to take such action on a large scale. The position that FanDuel has taken is a step in the right direction.

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What is needed is a consortium for such companies in which they can act as one. Although Americans with gambling addictions find other ways to satisfy their addiction, online sportsbooks can at least create headwinds for such behavior.

Without such efforts, the world Biff created could become the future that serves nobody’s best interests.

Sheldon H. Jacobson, Ph.D., is a professor of computer science at the University of Illinois Urbana-Champaign. As a data scientist, he applies his expertise in data-driven risk-based decision making to assess and inform public policy. He is also the founder of the Bracketodds website, a STEM learning lab at the university.

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