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A game changer in sport wagering and betting

This is an excerpt from Social Issues in Sport 4th Edition With HKPropel Access by Ronald B. Woods & B. Nalani Butler.

Generally, gambling is a broad, generic term for placing wages on the outcome of any event with an uncertain outcome. It is based on luck rather than knowledge or skill. Betting or wagering is an agreement between at least two parties where one party makes a prediction and loses or wins money based on that prediction. Although sports betting is a form of gambling, it has a slightly better risk if the bettor has some knowledge or skill at predicting the outcome, and thus it is more acceptable in most societies than simple random gambling (Difference Between 2020).

In 2018, the U.S. Supreme Court struck down a previous ban on sports betting known as the Professional and Amateur Sports Protection Act, which was passed by the U.S. Congress in 1992 to protect the integrity of sports. In effect, the Supreme Court (SCOTUS) ruling allows each state to decide whether to allow sports betting in that state. The state of New Jersey and its citizens had previously approved a law legalizing sports betting primarily to help their ailing casinos, particularly in Atlantic City, and the racetrack industry. State leaders had declared it was time to take back sports gambling from organized crime and offshore operations that were reaping thousands if not millions of dollars from sports wagering. The decision was a major defeat for the National Collegiate Athletic Association and the four major sports leagues that had blocked previous legislation. As the decision neared, the NBA softened its stance considerably with visions of additional revenue generated for their sport (Wolf 2018).

According to the American Gaming Association (AGA), the times have indeed changed as public opinion has swung in favor of more sports betting and politicians at the state and national level are pressured to lift the restrictions. Most Americans now support legal sports betting and the states’ ability to self-regulate it. Sixty-three percent support the repeal of the sports protection act and nearly 8 out of 10 support legalizing sports wagering in their states. About 39 percent of about 100 million adults are current or potential bettors, and 88 percent of Americans view gambling as an acceptable form of entertainment (AGA 2020).

The four major sports leagues have projected that they will generate additional combined revenues of more than $4.2 billion per year in total through sponsorships, TV advertising, media rights, merchandise, and ticket sales due to legal, regulated sports betting. The NFL alone projects additional revenue of $3.28 billion each year (AGA 2020).

Previously, 48 of 50 states allowed some form of gambling, with Utah and Hawaii being the exceptions. But sports wagering was only permitted in the states of Nevada, Delaware, Oregon, and Montana since they had state laws preexisting the previous ban passed in 1992. By 2014, Nevada was the only state to offer a full range of sports gambling, and Delaware offered limited gambling. Oregon and Montana had dropped sports gambling.

By the start of 2020, sports betting began to explode across the nation as one state after another began to work through the process to set up its own program and policies. A look at the state of sports wagering in all states is shown in figure 15.2.

Figure 15.2 Legal sports betting in the United States as of July 2020. Copyright © 2020 American Gaming Association. All Rights Reserved.
Figure 15.2 Legal sports betting in the United States as of July 2020. Copyright © 2020 American Gaming Association. All Rights Reserved.

Sports Wagering on College Campuses

The NCAA has taken a strong stand against legalized gambling in order to preserve the integrity of their games. Colleges are particularly sensitive to sport betting, and they mete out harsh penalties to students, athletes, coaches, and administrators who violate NCAA rules against gambling. At the heart of their concern is that almost all gambling profits have traditionally benefited organized crime. Those profits are funneled into other illegal activities, such as prostitution, loan shark operations, and drug trafficking (NCAA 2017).

In the early 2000s, college student involvement in gambling was relatively overlooked because campus communities focused attention on binge drinking and how it overlapped with use of other drugs. Midway through the decade, however, as legalized gambling grew throughout the United States, colleges began paying more attention to student gambling behavior. The prevalence of gambling among college students is about three times higher than it is among the general population. The most popular forms of gambling by college students are the lottery at 41 percent, card games at 38 percent, and sports betting at 23 percent. Approximately 75 percent of college students gambled during the past year, with about 18 percent gambling weekly or more frequently. About 6 percent of college students in the United States have a gambling problem, compared to about 1 percent in the overall U.S. adult population (International Center for Responsible Gaming 2020a, b).

A 2008 study of gambling among college students in Florida showed that 77 percent of males and 60 percent of females reported gambling at least once in the previous year. They gambled primarily for entertainment, to win money, and to socialize. The study also revealed that about 25,000 college students in Florida are likely experiencing gambling and gambling-related problems. In addition, nearly 15 percent of Florida college students were deemed at risk for gambling problems, whereas that was the case for just 7 percent of Florida adults and 8 percent of Florida adolescents. Moreover, the number of college students classified as pathological gamblers more than doubled the number reported for adolescents and quadrupled the number for adults (Florida Council on Compulsive Gambling 2008).

Here are some additional statistics about gambling by college students (Engwall, Hunter, and Steinberg 2004; Florida Council on Compulsive Gambling 2008):

  • Male college students (78 percent) are more likely to gamble than are females (60 percent).
  • In one study, the most frequent type of gambling among college students was sport-related—26 percent on professional sport, 18 percent on nonprofessional sport, and 18 percent on sport pools—thus accounting for 62 percent of gambling on campus. The next most popular form of gambling was the lottery at 39 percent.
  • College athletes are more likely than nonathletes to bet on sport, games of skill, and card games. Nonathletes are more likely to bet at casinos, play the lottery, or use slot machines. College athletes tend to be at a higher risk for sports gambling because of their competitive personalities, need for action and excitement, perception of norms, and sense of entitlement.
  • College students who gamble tend to show higher than normal tendencies to engage in drug and alcohol abuse, high-risk sexual behavior, and eating disorders and to have a grade point average below 2.0. Their debts from gambling range from $100 to more than $5,000 and are usually spread across several credit cards.

According to the NCAA, in 2016, about 24 percent of male athletes and 5 percent of female athletes admitted wagering on sporting events within the past year, while 9 percent of men and 1 percent of women reported doing so once a month or more. Students who were identified as problem gamblers were more likely than other students to be heavy drinkers and regular users of tobacco and marijuana. Problem gambling was also related to binge drinking, marijuana use, cigarette and illicit drug use, unsafe sex after drinking, driving under the influence, and a low GPA (International Center for Responsible Gaming 2020b).

The NCAA opposes all forms of legal and illegal wagering at any level (college, professional, and amateur) on sports in which it conducts championships. This stance includes Division I Football Bowl Subdivision games and emerging sports for women. The NCAA believes that sport wagering has become a serious problem that threatens the well-being of student-athletes and the integrity of college sport. Here are some salient facts highlighted by the NCAA (2020):

  • The Internet has made it easier than ever for student-athletes to place bets in virtual anonymity and with no supervision. Thirty-two percent of male athletes and 15 percent of female athletes placed their wagers electronically.
  • Student-athletes are viewed as easy marks by organized crime and organized gambling.
  • Student-athletes who gamble are breaking the law and jeopardizing their athletic eligibility and that of other team members.
  • When student-athletes become indebted to bookies and can’t pay their debts, they are at risk of being forced to undermine the outcome of an athletic contest or shave points.
  • NCAA rules prohibit athletes, athletic department staff, and all conference and national staff from engaging in any type of sport wagering.

Some progress is being made, according to a 2012 NCAA survey of student-athletes whose results were compared with the results of similar surveys completed in 2004 and 2008. The most recent survey noted a decrease in frequent wagering by Division I men’s basketball players—one of the target groups for education about the risks and consequences of gambling. It also found a decrease in the incidence of Division I men’s basketball and football players sharing information (such as injury status) with outsiders. The survey found that men still greatly outnumber women as social, frequent, and heavy gamblers in all three divisions. Indeed, up to 26 percent of males compared with only 10 percent of females across all divisions reported that they gambled on sport during the past year—a violation of NCAA rules. Perhaps surprisingly, the highest incidence of gambling occurs among male athletes in Division III.

The majority of sports wagering by college student-athletes is focused on just a few sports, with the NFL being the top wagering target for both men (65 percent) and women (44 percent), followed closely by college basketball, NBA, and college football, in that order.

Men’s golf poses a particular problem across all three divisions because 20 percent of male golfers report wagering on sport at least monthly. No other sport even shows a percentage that reaches double digits. In Division I, for example, 19 percent of male golfers reported social levels of wagering, as compared with just 6 percent of Division I male basketball players and 5 percent of football players. The NCAA is taking steps to address this anomaly in golf through aggressive education and publicity throughout the collegiate golf community (NCAA 2013).

Changing attitudes and behavior among college student-athletes has improved as a result of increased education and emphasis from the NCAA and individual institutions, but discouraging sports wagering is not an easy sell. Most student-athletes—76 percent of males and 61 percent of females—believe that sports betting is a harmless pastime. Nearly half of males (49 percent) and nearly a quarter of females (23 percent) who bet on sports think they can make a lot of money doing so (NCAA 2013).

Pros and Cons of Sports Betting

The strongest justification for legalizing sport wagering comes from those who suggest that it can provide a bailout for local and state governments, which are searching for new revenue streams. When the government promises to channel gambling profits into education or youth sport programs, some public officials and many citizens are tempted to embrace sport wagering as a revenue stream. Proponents point out that, without legalized sport gambling, the profits gambling generates go to illegal operations and organized crime, whereas this money could be used for worthier causes. They also point out that in spite of laws making sports gambling illegal, people have simply shifted their behavior to online betting, with a boost from improved electronic access, or have placed their bets offshore. Those in favor argue that regulated sports betting will be fairer to bettors when regulated by states that minimize tax rates and eliminate “handling fees.” They also want to protect the integrity of games by monitoring and eliminating betting fraud, setting limits, and helping those addicted to compulsive gambling (AGA 2020).

Those opposed to sport gambling believe that it corrupts youth, allows organized crime to become directly involved in sport, and takes money from people who can’t afford to lose it. They say that the benefits of legalized gambling have typically gone to bookies, a few gamblers, and offshore Internet betting sites. The risks outweigh the benefits when people bet more than they can afford, fall into debt, and become susceptible to loan sharks who charge exorbitant fees to bail them out.

From a moral point of view, gambling goes against traditional core values based on a strong work ethic and controlling your own destiny that has been the backbone of American society. Most religious organizations reject gambling as an acceptable activity and have grave concerns about its effect on the elderly and the lower socioeconomic class who can least afford to lose money.

The United States is in the top group of countries worldwide where a huge part of the population has a gambling addiction problem. Statistics from the North American Foundation for Gambling Addiction Help (NAFGAH 2016) show that 2.6 percent of the population, or almost 10 million people, has a gambling addiction problem. Furthermore, gambling has by far the most harmful effects on people at the lower end of the income ladder. While they may spend the same amount of money to gamble as those at higher income levels, the amount they lose is a much higher proportion of their total incomes and often affects normal household expenditures for themselves or their families (Whitehead 2014). Once people have a serious gambling addiction, public monies have to be allocated to assist them for basic expenses such as housing and food, which offsets the income governments may realize from taxes on gambling.

Meanwhile, student-athletes may feel pressured to throw games or shave points, fans may lose faith in the legitimacy of games, and coaches who feel pressured become deceitful about their team’s chances of winning, especially if affected by injuries to key players. Eventually some fear that the U.S. system of sport could lose any semblance of integrity of outcomes and lose the fans that have made it so successful.