Sports Betting’s Expanding Economic and Social Impact
Online sports betting has expanded its reach in recent years. Not that long ago, sports bettors had to travel to locations where gambling on games was legal, such as Las Vegas. Or they could visit bookies who were often connected to organized criminal organizations. That all changed in the United States in 2018, when the U.S. Supreme Court struck down a federal law that banned states from authorizing sports betting.
The ruling opened an avalanche of state governments rushing to get in on the action. This gambling gold rush presumably put pressure on the Canadian government to legalize bets as well. Parliament passed C-218 in the spring of 2021, paving the way for provinces to allow sports betting. Ontario and Alberta plan to approve sports bets within the next few months.
Online sports betting has become a big business almost overnight. New York, one of the most recent U.S. states to legalize sports wagers, saw 5.8 million geolocation pings, showing where bettors were placing bets, in the first 12 hours after betting opened. The first weekend sports bets were legal in New York, gamblers pinged 17.2 million total bets. The wagering volume easily surpassed second place Pennsylvania, with 2.3 million pings. With online sports gambling being a $40 billion a year industry, other states are also planning to come on board. 11 of them legalized sports gambling in the wake of the Supreme Court ruling, seven have since joined the list and 24 states have gambling legalization legislation pending.
Sports betting proponents point to the industry’s huge economic impact and increased revenue for state and provincial governments. A recent study estimated that legalizing sports wagering in Florida could create 20,000 direct jobs, $1.1 billion in direct added domestic product and $264 million in potential tax revenue.
However not everyone believes jumping on the sports betting bandwagon is a good idea. 10 of 23 economists in an Ohio gambling study believed the benefits of legalizing sports books outweighed the costs, four felt the opposite and nine were uncertain. Critics argue that making it easier for gamblers to wager on sports will lead to more gambling addictions, especially among lower income people who can ill afford to spend money on bets.
Sports betting opponents state that wagering through smart phones will lead to more gambling addicts at a younger age. Only 1% of adults in the U.S., have compulsive gambling addictions. However, that’s still 6-8 million people. The British government, which legalized sports gambling in 2005, has recently restricted it. Credit cards are banned, and ads are limited. A U.K. parliamentary study of gambling businesses described how most of the industry’s profits came from a small number of problem gamblers.
The report stated that some gambling operators used ingenuity, including unscrupulous methods to hook new customers, especially children. It remains to be seen if U.S. and Canadian governments will also rethink their views on sports betting in the years to come.
-Jeff Dahlberg
Twitter: @JeffDahlberg3