Betting on Disaster:How the Lack of Government Oversight Will Turn Online Sports Gambling into a National Epidemic

Gambling is an old tradition tracing back hundreds of years. With the introduction of the internet, sports gambling is becoming more prominent than it has ever been. In modern history, sports gambling has been restrictive in respect to where you may place your wagers, as well as what you may wager on. In 2018, the Supreme Court overruled a federal ban on Sports Gambling, allowing the tradition to blossom immensely throughout the country. The rapid growth of sports gambling has thus escalated to epic proportions to which the country will suffer as consequence. Without strong government intervention, the explosive growth of online sports gambling will escalate into a public health and financial crisis effecting millions of Americans. 

The impending crisis of online sports betting will be traced back to a decision made by the Supreme Court on May 14^th, 2018. In 1991, the Senate Judiciary Subcommittee held a public hearing on sports gambling and concluded that it was a national problem. As a result, the “Professional and Amateur Sports Protection Act (PASPA)” was created. The Supreme Court stated, “The Professional and Amateur Sports Protection Act (PASPA) makes it unlawful for a State or its subdivisions “to sponsor, operate, advertise, promote, license, or authorize by law or compact . . . a lottery, sweepstakes, or other betting, gambling, or wagering scheme based . . . on” competitive sporting events, 28 U. S. C. §3702(1), and for “a person to sponsor, operate, advertise, or promote” those same gambling schemes if done “pursuant to the law or compact of a governmental entity,” (16-476 Murphy v. National Collegiate Athletic Assn). At the time, certain states like Nevada and New Jersy sanctioned sports betting through casinos. PASPA gave these states one year to file and keep their license of sports betting before PASPA went into action. New Jersy, however, did not file to keep sports betting legal within the one-year period. The states failure to file would lead to PASPA, the act protecting the nation from future turmoil, being overturned.

PASPA was created to stop the spread of sports betting to become nationwide. In 1991 the government had the foresight to identify a potentially devastating issue. Twenty Six years later, PASPA was overturned as Phil Murphy, the New Jersey Governor, began the case against the Supreme Court. In 2018 Phil Murphy won the case on the basis that PASPA conflicted with the 10^th amendment. 

Before 2018, online sports gambling was restricted to the state of Nevada. After PASPA was overturned, over 30 States have legalized sports gambling, with more States being added every year. One of reasons for the expansion of legalization via States is due to the tax imposed on sports betting revenue. Most States impose a 10% to 20% tax on betting revenue(NCSL). With the exponential growth of sports betting, States are inclined to legalize for tax profit. 

According to the American Gaming Association (AGA), “a record $13.71 billion in 2024 revenue, up from 2023's record of $11.04 billion” was reported. AGA issued that in 2024, there were, “$150 billion worth of bets, a 22.2% increase from 2023”(Greenberg). The spread of legalization has contributed to the massive growth of online sports betting, however more importantly, the ease at which one can gamble is one of the main causes of its growth. 

In 1991, when PASPA was put in place, smart phones were yet to exist. Now due to a constant online connection, bets can be placed with ease through betting sites like DraftKings or FanDuel. AGA vice president of research David Forman said, “30% of all commercial gaming revenue came from digital sources in 2024, compared to 25% in 2023 and 13% in 2021”(Greenberg).  States are legalizing more; betting is easier than any other time in history due to advancements in technology. This combination provides staggering numbers that will only grow. The University of California contrasted the money transactions before and after PASPA was overturned. According to their study, the dollar amount of wagers in 2017 (before PASPA was overturned) was “$4.9 billion”, compared to “$121.1 billion in 2023”(Ono). The university found that a staggering “94% of wagers during 2023 placed online.”(Ono).  The influx of people who are now betting on sports is an issue that is both simple and complex. 

In society, certain acts are seen to be taboo if done to excess. For example, alcohol and cigarettes. People drink alcohol in social settings, to unwind or to enhance food. However, alcohol has an addictive property that may cause someone to use it excessively. Once the scale has tipped from enjoyment to abuse for an individual, alcohol for sed person, is seen as detrimental. It is a net negative on the persons overall life. There is, however, undefined parameters on when this may occur. A daily drinker may be completely unaffected by the habit, while another who drinks daily, may suffer significantly. The ambiguity of what is and is not a problem for the individual makes consuming alcohol a subjective issue. Cigarettes are seen as a net negative to whomever is consuming them. Through medical research, cigarettes have been deemed as undeniably unhealthy for those smoking. As a result, cigarettes have been banned from advertising for over 50 years as the government saw smoking as a public health issue. Cigarettes also come with the U.S. Surgeon General’s warning, providing the consumer the knowledge of its health risks. Nicotine, the addictive compound found in cigarettes, does provide a calming effect on the individual consuming. There are inconsistencies with how both alcohol and cigarettes are regulated and why. Both provide a sensation to the consumer, while also providing a potential risk. However, alcohol is advertised with regularity, while cigarettes are federally banned from doing so. The issue of online sports gambling draws similar dilemmas and complications. 

In 2023, according to Scaleo, FanDuel spent “over $1 billion annually on marketing”. DraftKings in the second quarter of 2023 spent “$197.5 million on advertising”(Sramek). Caesars, newer to the sports betting application spent “$1 billion on a market push”(Sramek). Advertising comes in the form of TV and radio, online advertising and sponsorships. Celebrities like Kevin Hart and athletes like LeBron James are notable partners that help advertise sports betting applications. Much like the sale of alcohol, companies are spending enormous amounts of money on promoting their applications to facilitate sports betting. Another parallel is that most advertising is targeting a younger audience, with the evidence of celebrity endorsers like Erik Andre. There is a sinister difference, however, in the tone of online sports betting advertising versus alcohol.

Companies such as Carona or Budweiser often push a narrative of social drinking. A message implying that with their product, people can have an enjoyable heightened time together. In 2024, FanDuel set out to advertise on TV with a campaign centered around “The Hunch”. The idea of the advertisement was that someone would have a “hunch” about how a certain game would go and would use FanDuel to place their bet. With several advertisements on TV, “The Hunch” would be personified by a celebrity, enticing you with scorelines and parlays. For example, the gambler would open his freezer and see Eric Andre in there suggesting a bet. Then the gambler would open the drawer too see Eric Andre suggest another bet. Sometimes “The Hunch” would be played by another celebrity, yet there was a commonality. Usually, the gambler who was being persuaded by “The Hunch” was alone, in either their apartment or house. Unlike alcohol, gambling is targeted to those who are isolated. Alcohol’s advertising message is to enhance the experience with others around you. Gambling’s advertising message is to enhance your time in isolation. An alcoholic may drink alone; however, alcohol companies steer away from this portrayal. Gambling companies on the other hand, unapologetically embrace this. The life of a gambling addict is painful. With a growing sports gambling industry and a cart blanch on advertising to its consumer, an increasing number of people suffer the pain. 

Rob Wile, a writer for NBC News, came across two studies that explored the impact of legalized sports gambling on American households. Wile writes, “In separate papers released this month, academics have found that households in states where gambling was legalized saw significantly reduced savings, as well as lower investments in assets like stocks that are generally considered more financially sound… states that legalized sports betting saw their residents’ aggregate credit scores decrease, while bankruptcies increased.”(Wile) PASPA was overturned 7 years ago, and the ramification financially has already taken place. Scott Baker, an associate professor of finance at Northwestern University’s Kellogg School of Management, is associated with one of the studies. Baker found, “Using datasets showing deposits and withdrawals into and out of online sports betting platforms like FanDuel and DraftKings, as well as to and from equity brokerage accounts like Charles Schwab, E-Trade, Vanguard and Fidelity, Baker and his co-authors found that legalization has led to higher credit card balances, lower access to credit, a reduction in longer-term and higher-yield investments, as well as an increase in lottery play — with the effects particularly pronounced among financially constrained households.”(Wile) Citizens are free to spend their money however they please, however, Baker points out that the effects of online sports gambling have a stronger effect on “financially constrained households”. As many states do tax gambling between 10 to 20 percent, the money is coming out of the pockets of those who need it most. Just like many addictions, those who suffer most prominently, are those with financial issues. The New York State Gaming Commission noted a “26% increase in problem gambling-related calls to the Office of Addiction Services and Supports from 2021 to 2022”(Wile). The University of California San Diego found, “internet searches for help with gambling addicting, such as “am I addicted to gambling”, have cumulatively increased 23% since Murphy v. NCAA [overturn of PASPA] through June 2024. This corresponds with approximately 6.5 to 7.3 million searches for gambling addiction help-seeking nationally, with 180,000 monthly searches at its peak”.  Due to an increase in the amount of people sports betting, those of who are prone to addiction, are accumulating. Gambling addiction not only effects the person gambling, it also can tear apart families and those around the gambler. 

In December of 2024 the World Health Organization published details about the effects of gambling on health. They deduced, “Gambling can lead to serious harms to health. These include financial stress, relationship breakdown, family violence, mental illness and suicide. The legacy of gambling harm can endure throughout one’s life and transmit intergenerationally.”. The World Health Organization also cited as study done in Sweden that states, “study estimated that those with a gambling disorder were 15 times more likely to die by suicide than the general population”. The people who suffer the most from gambling are those who usually are already suffering, “Easy accessibility of gambling products increases the risk of uptake. Opportunities to gamble are often disproportionately located in areas of higher disadvantage” according to the World Health Organization. This is the nature of addiction. Lower income neighborhoods have a disproportionate amount of liquor stores compared to higher income neighborhoods for example. These are the patters of a capitalistic driven society. What makes gambling in the form of online sports bets more alarming is the precise simplicity. Just with access to the internet, a person has the potential of being victim to a sportsbook company. With data being shared through companies, gambling sportsbooks are dangerously targeting those who are weakest. The principal of “quick money” or “easy money” is a con that precedes 2018. However, now it is on a national scale, being pitched to everyone. The United States government is not passive to the growing issue, they are actively letting it grow.

According to NBC News Robe Wile, states are unlikely to crack down on these issues as states see gambling as a “cash cow”. The growth of online sports gambling is a moving train gaining speed year by year, with no resistance to slow it down. The frightening truth is the growth is exponential and without interference, the problem will worsen.

The majority of states in the US, since PASPA was overturned, have legalized online sports betting. California and Texas are not among those who have legalized. California and Texas are powerful in both population as well as economic strength. The tax placed on gambling makes legalization for both these states increasingly appealing. Another factor that may contribute to these large states legalizing, is that sportsbooks such as DraftKings, FanDuel or BetMGM are all publicly traded companies. Shareholders nationwide as well as the rest of the world, are eager to see an increase in growth and profit. Both California and Texas are the pathways for these shareholders to see their investments multiply. The protection that PASPA provided to those suffering from the sports gambling boom, is only 7 years removed. The US is relatively in its infancy state of legalization. With the current trend, lack of restrictions from the government, and the pressure from the private sector of investors, a legalization in California and Texas will lead to a full-fledged crisis. The mentality of preventing an epidemic is insufficient. Even if California and Texas do not legalize online sports betting, does not mean there is a victory against the impact of gambling. The status quo is insufficient. The US government must dampen its growth immediately and set a goal to decrease the amount of online gambling occurring. Although the inverse is happening, there are examples of health issues by which government intervention not only flattened the growth, it decreased overall use. 

In the 1940s and 1950s, multiple studies found the cancerous properties of cigarette smoke. In 1967 the first anti-smoking campaign aired on television and radio. It was not until January 1970 the federal government made it illegal to advertise tobacco. According to too American Lung Association, “smoking rates have fallen 73%” (Ibrahim)from 1965 to 2022. Online sports betting must follow a similar, aggressive strategy. Currently, when advertising, sportsbooks will have a disclaimer bellow the advertisement reading, “Gambling Problem? Call 1-800-GAMBLER”. An issue with this method is addiction is not always evident to the person who is gambling, especially after seeing a 30 second advertisement glorifying potential winnings. A person must know they have an issue before seeking help. The campaign against cigarettes was aided by an outside movement that would push the government to take action against tobacco. An increase in advertisement against smoking, would not be competing against pro tobacco advertisement. Currently with online sports gambling, it is a one sided assault against the public on the part of wealthy sportsbooks. The government should push not only ban advertisement of sports betting, but there should also be a coinciding push on bringing awareness to the issues caused by online gambling. While states may argue against banning online sports betting, as many receive profit from taxes, awareness of the public is crucial. Cigarettes and tobacco were also heavily taxed, yet advertisement showing the damage it caused on the public, hampered politicians’ ability to champion a “pro-tobacco” cause. Ideally, the “application” that sportsbooks use should also cease to exist. 

Scott Baker, a leading research expert on online sports betting, says, “If we’re worried about people acting impulsively, then one lever that would move the needle would be to make all sports betting take place on premises somewhere,”. Before 2018 when sports betting was only legal in Nevada, people went to casinos to place wagers. Although smartphones have been accessible well before PASPA was overturned, the legalization of many states have given power to sportsbooks to create and fine tune their applications. Legalization of sports betting in states is a major decision, however, aiding it through technology makes it volatile. Banning sports betting apps are the best way to quell the damage, however, if politicians do not want to, they must have oversight of the applications themselves.   

The government should mediate how sports betting apps interact with their customers. Lia Nower, a leader of studies at the Center for Gambling Studies at Rutgers University, explains that gabling “activates the brain’s reward system”(Parshall). Nower explains a 3 phase pattern that gamblers go through. She says, “First, a person starts to overemphasize their wins, leading them to gamble more. As they play more, they will inevitably enter the losing phase and may begin “chasing losses”—gambling more in the hopes of recouping those lost funds. This then causes a downward spiral into desperation and hopelessness, which can lead to financial or even physical harm for the person and those around them.”(Parshall) Nower describes a difference in the way people gamble at casinos, as not all forms of gambling carry the same levels of risk. A game of poker with friend, for example is less dangerous than playing a slot machine, according to Nower. Slot machines are a casino’s greatest moneymaker due to their addictive nature. Jamie Torrance, a psychologist studying gambling at Swansea University in Wales describes the difference, “machines’ incredible pace—unlike in a game of poker or blackjack, only seconds pass between placing a bet and winning or losing. This makes the experience more immersive, leading some slot players to enter a trancelike state called “dark flow” in which they become completely absorbed by the game”(Parshall). Sports betting was seen more as poker or blackjack, as Torrence refers to it as a “slow form of gambling”. Most sports betting wages were placed on the outcome of a game, or the spread of a certain match. However, with apps, people can place a bet anytime they would like on smaller events. These could include, first person to make a basket, or how many 3 point shots a player will make during a certain quarter or period of time. The quick, 24/7 pace, makes sports betting online more like a slot machine rather than a slow paced game of poker. If applications are going to continue to exist, there must be intervention on how live and frequently you can place bets. Sports betting apps also corner the market of gamblers who do prefer to play it slow through a feature called “parlay”.

A parlay is a string of different betting outcomes that can be strung together for larger winnings. However, with bigger winnings, the odds of losing are greater as well. Sports betting apps are very aware of this and push their consumers to parlay as many outcomes as possible by providing “parlay boosts”. Essentially, this makes it as though sports books are cutting you a deal to increase your payout, however, it is only to entice you to place a bet that most likely will not hit. Parlays must be prohibited as this essentially bleeds the gambler faster of their money. Once a bet is placed and lost, the application will only show you how much you placed and hide the amount you potentially could have one. There must be full transparency on apps if they continue to exist. The quick action of sports betting as well as parlays is putting people at risk, however, the darkest part about sports betting apps are the precision they have in tracking their user. 

Heather Wardle, a policy researcher studying gambling at the University of Glasgow, explains how sports betting apps are able to use information about how and when someone bets and what that person bets on to determine what offers they send. Wardel says, “Imagine what the tobacco companies would have done if they had known every single time you took a cigarette out of a pack—if they’d have known exactly how much you smoked, when you smoked, how often you smoked, the circumstances around your smoking,”(Parshall). Information is an important asset, and as it stands today, the sports betting applications are privy to all of it while the consumer helplessly has none. 

People in the US are fighting a war against large sports betting platforms. Sportsbooks have the finances, the data, a movement of growing expansion, and most importantly the nature of human tendencies all in their arsenal. Meanwhile, victims of the online sports betting world are equipped with nothing. A lack of information about a potential dark future is hidden from them. As online gambling continues to grow, the US government has a decision to make on which team they would like to be part of. With new lucrative indictments being invented, there will always be hardship. Although it may be unfair for people to expect elected officials of government to prevent future crisis, it is imperative that when crisis emerges, action follows.