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The number of states with legal sports betting has surged from one to 38 since the repeal of the Professional and Amateur Sports Protection Act on May 14, 2018. The expansion has radically altered the gambling industry, but it has also caused an upswell of support for responsible gambling policies and problem gambling funding.
Gambling.com spoke to National Council on Problem Gambling (NCPG) executive director Keith Whyte to get his thoughts on the changes in the responsible gambling space since the repeal of PASPA.
Gambling.com is doing a multi-part series on the fifth anniversary of the repeal of PASPA, which opened the door for each state to consider online gaming. Today, we look at responsible gambling.
Take the Good
According to Whyte, the expansion of sports betting has been a mixed bag on the responsible gambling and problem gambling fronts.
“We’re closer than ever to looking at gambling and gambling addiction as a national issue,” Whyte said. “For the longest time, most Americans have looked a gambling as a state discussion, as has the industry, as most operators are regulated on a state-by-state basis.”
Whyte believes it’s a larger national issue, and that view is catching on elsewhere. “One of the positive impacts of the massive expansion of sports betting and national gambling advertising is that more and more people are now realizing, finally, belatedly, that this is truly a national issue.”
Another positive highlighted by Whyte is the ongoing efforts to destigmatize addiction. “Americans have always gambled, and we’ve always had a lot of gambling. But most people are unsure and uncomfortable about gambling addiction,” Whyte said. With the pervasiveness of sports betting, it is no longer taboo to talk openly about gambling.
Take the Bad With the Good on Gambling
But it hasn’t been all sunshine and puppy dogs.
“The flip side of this massive expansion of gambling is we do see increases in risk for gambling problems,” Whyte said. “Our big telephone surveys, of 28,000 people, show risk has increased by about 30% between 2018 and 2021 alone.”
According to Whyte, the bulk of the increase is among a single cohort, young male online sports bettors.
The risk rate isn’t zero among other segments, but among young male bettors, who were already high risk, “we think risk grew even greater.”
According to Whyte, the increase in risk may not be entirely attributable to sports betting, as these are multi-channel bettors who dabble in everything from online poker to daily fantasy sports, but it’s likely a contributing factor. “Most of these young male online sports bettors also gamble in other verticals, so we want to be very careful and not assume the increase in risk for gambling problems is all associated with their sports betting.”
“There’s a collision of a lot of different things, but risk is additive,” Whyte said. “And when you increase the advertising in this segment, when you increase the bonusing, you raise the stakes even higher.”
COVID’s Role in Gambling
It’s hard to discuss the previous five years without discussing the pandemic.
“It had broad impacts across the industry, and certainly it increased risk factors among gamblers,” Whyte said. “Our ongoing research will tell us a lot more about whether or not that increase in risk was temporary.”
Not Every Idea Is a Good Idea
“I think a lot more people are trying to figure out what good, responsible gambling really means,” Whyte said. “On the good side, there’s a lot more people talking about it. On the bad side, some of the people that are talking about responsible gambling have absolutely no idea what they’re doing.”
Whyte counted politicians and “frankly, more than a few regulators” into that group, pointing to “odd responses” to issues the NCPPG and others have been working on for decades.
“Rather than working with us, there’s a lot of people that are just jumping in… and a lot of them don’t really understand gambling and particularly problem gambling. As a result, they’re not focusing on things that would really meaningfully cause change.”
Reimagining How People Interact with Gambling
The repeal of PASPA and the spread of legal sports betting has dramatically increased marketing, with the public constantly bombarded by sports betting advertisements. And because nobody really knows what is working, operators are blanketing every medium with advertisements about their sites and bonuses.
“There’s a lot of increased advertising, and there’s that old adage, only half of advertising works, but we don’t know which half that is,” Whyte quipped. “I think that’s where the sports betting industry is.”
Whyte believes the main goal is recruiting new customers but pointed to bonusing and loyalty programs as tangible rewards that may incentivize people to gamble more. The third prong Whyte brought up was in-play betting, which now accounts for the slight majority of bets placed in the U.S. market.
“I think increases in advertising, accessibility, bonusing, and in-play betting for people who are already gambling may push them to gamble more and push them into the at-risk problem category,” said Whyte. “That’s only part of the story. But that’s some of what we’re looking at.”
New Bettors Coming in With More Accessibility
One of the topics broached was my own experience with the launch of sports betting in Massachusetts.
“I played in a home poker game right after Massachusetts legalized sports betting, and 12 of the 15 were talking about the bets they had on the college basketball games,” I explained to Whyte. “I’m curious to hear your reaction to this other segment of the population that I don’t think a lot of people talk about.”
“There’s so much more accessibility, and although there’s still some stigma there, over the past several years, people are openly talking about the bets and the apps they have,” Whyte answered. “So, I think that’s both good and bad, but there’s a lot more social acceptance now of gambling in general and sports betting in particular, and almost to the point where among certain segments, and probably your home poker game’s a pretty relative example, it would be weird if you weren’t betting.”
Whyte offered his own anecdote for underage bettors, a presentation he gave to 17-year-old members of a local youth league.
“I went out there, and I said, how many of you have a sports betting app on your phone? And of the forty, thirty-five raise their hands,” Whyte said. He noted that some might be using DFS apps, prediction apps, and offshore sportsbooks, but noted: “Some of them may actually have accounts with legal sportsbooks as many sites don’t do KYC until you deposit.”
“What that means is a bunch of these 17-year-olds that I’m talking to already have DraftKings and FanDuel accounts, and they’re getting — I use this word very rarely — they’re basically getting groomed,” Whyte said. “While we may know the legal differences between these apps or why a site may not do KYC until deposit, parents, and kids do not. The general public sees sports betting exploding. They see basically unlimited access because a kid can sign up and get an account, even if they can’t use it.”
More Attention on Responsible Gambling Is a Good Thing
The increased attention to responsible gambling has been a significant benefit. The goal is to ensure it’s a longstanding trend and not a flash in the pan that lawmakers, regulators, and the public lose interest in.
“We have to prove the economic benefits of responsible gambling,” Whyte said. “There’s a lot of evidence from Europe and some from the United States that if you offer your product responsibly if you try and create sustainability, you’ll have higher lifetime value.”
Once again, data is not our friend, as there is scant evidence on the ROI of responsible gambling policies. Whyte hopes that changes as more data from online gambling becomes available.
Whyte also believes a constant reminder of the situation in Europe will keep responsible gambling in the spotlight. “The backlash that we’re watching in real-time in the UK can come here as well because as far as I know, it’s happened in every single other jurisdiction that has liberalized or expanded online sports betting.”
These backlashes are driven by advertising, integrity, and addiction concerns and usually appear around five years after gambling expansions.
Whyte’s final point was “the social license to operate sports betting and partner with the leagues.” As he notes, that is predicated on public acceptance, which is “a hard thing to measure, and you don’t know what will change that usually until too late.”
“As I look back at the last five years, I think sports betting sponsorship deals with colleges have generated the biggest negative public reactions,” said Whyte. “That’s one of the first things we hear when we are on Capitol Hill.”
The solution is to have systems in place. “Operators would do well to have as many responsible gambling programs and policies and procedures in place as an affirmative defense,” Whyte said.
The Future of Gambling
In a perfect world, what does sports betting and the online gambling space five years from now, and what is an achievable wish list? That’s a question I asked Whyte.
Whyte’s biggest ask is a national minimum standard on responsible gambling, where “finally every jurisdiction that regulates gambling — 48 states, some 200 tribes, 47 state lotteries — can have a common consumer protection framework with the same general protections.”
Whyte noted everything from national self-exclusion to a central helpline number and minimum age standards. “There’s so much risk for gambling problems that could easily be mitigated by just getting some harmonization of these regulations,” he said. “I think if we did that on the responsible gambling side, there’s a lot of benefit.”
Time for the Feds to Step In?
Achieving that goal won’t be easy and will take the formation of a cohesive industry group setting the standards or federal action. Whyte leans towards the latter, not out of desire but rather out of practicality.
“I’ll show my hand a little bit,” Whyte said. “We’ve spent 50 years encouraging the industry to get together and do this themselves. They’re the folks with a lot of power who reap enormous profits. But to date, there has not been much progress on the national level.
“I think they’re changing a little bit because they realize achieving compliance across the hundreds of jurisdictions in the US is almost impossible. But I think the time for the industry to take the lead has probably passed.”
“It might well take national level, federal level action. That’s not our first choice. That’s not our second choice. But we may have to try something else different.”
A Glimmer of Hope for Problem Gambling
Whyte did note progress, pointing to the national 800-GAMBLER helpline number that was recently announced. The number works in all 50 states by referring callers to all the existing local contact centers. “It’s like 9-1-1,” Whyte said. “You call once, and you get routed to the correct place.”
The number doesn’t have 100% buy-in. “We’re not there yet,” Whyte said. “There are still some obstacles, but I think by the end of this year, a majority of states will have signed off, and then in five years, I would hope that we’re everyone is using the national problem gambling number.”
“If we can do that with a national number, maybe then we can start to roll out a common self-exclusion process or agree to a nationwide minimum age,” he said. “It’s doable. It’s just going to take a revolution in responsible gambling.”
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