Really appreciate this article. One of the things that has really concerned me with the rise of the mobile gambling industry is just a sheer number of ads that people are getting bombarded with. It's election season so my ad content has changed but for a while during the pandemic especially, it seemed like every other AD I got served on YouTube was for one of the online sports books, FanDuel or DraftKings. Plus there were big billboards with ads for one of those or other sports books. And that kind of wall to wall ad coverage concerns me. It's also something I think about when we moved to legalize marijuana, how many ads for marijuana are we going to be blanketed with? It's a bit of a sticky issue in the us because we have first amendment restrictions and so can't just restrict advertising without cause.
I think the Supreme Court should treat advertising the same way it treats pornography: fine, it's protected by the First Amendment, but you can legislate to prohibit minors from seeing certain types of it. In practice that would kill most forms of obtrusive ads in the categories Congress wanted to ban.
It’s striking how different the ad ecosystems we all encounter are! Probably the biggest difference is that I have a premium YouTube account, so I only get the sponsored content ads, but as a result, basically the only ads I get are for Hello Fresh, Nebula, CuriosityStream, and various VPNs. I definitely haven’t seen any sports betting ads.
It makes me wonder how different and weird someone else’s ad ecosystem might look.
Some of the YouTubers I watch regularly include Adam Ragusea, JJ McCullough, Wendover Productions, Sabine Hossenfelder. I’m pretty sure that almost any video by one of them has a minute somewhere in the video where they take a break to talk about the sponsor of the video. (I’m not linking right now because I’m on my phone and don’t want to start a YouTube video.)
Okay, I think I understand now. So this is just a part of the video itself, is not avoidable, and is not customized based on who is watching it? I was confused because, in addition to not watching these types of videos myself, you had mentioned seeing promos for certain companies and another person replied that they see a lot of ones for gambling. I guess that is just because you both are watching very different videos.
The worst aspect is how sportsbook advertising gets slipped into sports media. You can’t listen to a podcast or radio show without hearing the hosts talk about their favorite prop bets (the fact that they always push prop bets and parlays on social media is how you know they’re doing it at the request of the book.)
Or not…Maybe they’re talking up that prop bet simply because sports betting is in itself a talking sport.
Sports betting odds provide an endless well of content for podcasters and talking heads. Public expectations for game margin, quarter/half margin, specific player stats is a perfect starting point for taking a stance and having a discussion.
100% this, I am uncomfortable the extent to which all sports leagues have gotten into bed with the gambling companies. Maybe banning gambling ads during actual sports broadcasts is the place to start.
In Washington we have full legalization and a booming industry but tight restrictions on ads. Basically folks can pretty much only promote via their name and signage design. By the time my daughter and friends were pretty young they knew exactly what businesses were weed shops because of theri giant 21+ signs which are huge and they started to figure out the weed based puns in the names. Ironically, I think it has made weed seem lamer to her generation that they associate it so much with their middle aged parents and really sad puns.
Sports betting is the controversy du jour, but have we ignored the pervasive harm of all betting, the vast majority being state sponsored lotteries. Since 1945 with the first lottery in New Hampshire, states have gotten in the business of sponsoring lotteries that repeated studies show disproportionately hurt the poor as a form of regressive taxation, where the poor bear the brunt of the 30% cut that the state takes for it.
The argument that people would alternately play the numbers etc. is valid, but what bothers me is the huge advertising budgets that states use to encourage people to do stupid behaviors. Yes, no harm in a reasonably well off person occasionally buying a ticket, but it ignores the fact that poor people spend a large part of their income on this and as a group lose money.
But the state is at least partly responsible for educating people, or at minimum not misleading them, so when it buys advertising saying that buying a motto ticket is a good idea, it’s working against its own telos.
I might have said that if I knew what it meant, but I learned a new word, though the way WIki describes it as more a tax on bad behavior like fizzy drinks or alcohol, though maybe that makes sense. Thanks for a new word https://en.wikipedia.org/wiki/Pigouvian_tax
I only play when the lotto gets over about half a billion because anything less just isn’t worth it. Im not going looking a USED Yacht like an asshole.
This also means I only throw a few bucks at it a couple times a year.
Belisarius's comment here nicely captures what I think is a central difference that tends to separate right and left: the former's avoidance of actual consequences. Whether we call it a form of taxation or we call it a fire hydrant, state lotteries in practice suck money out of the pockets of the less affluent. In a word, they're regressive.
How am I (or the right) avoiding consequences here?
It doesn't suck money out of the pockets of the less affluent by dint of them being less affluent.
It does it because the less affluent tend to repeatedly make bad decisions.
By all means, be paternalistic and (try to) prevent poor people from gambling. Because gambling is usually dumb and tends to have bad consequences. I fully approve.
The difference between right and left here is that:
A) the right generally wouldn't much care about this at all (at least at a societal level) if welfare weren't a factor.
B) the right may be less willing to tolerate general restrictions on everyone when the problem is only with poor people. Just restrict poor people from engaging with this.
OK, call it what you will, but it is a money drain that multiple studies show is particularly damaging to the poor. I think of it like a tax because 30% of the money spent goes to the government and it is regressive in that it reflects a much higher percent of income among the poor. This has that view: https://erlc.com/resource-library/articles/state-lotteries-are-an-exploitative-tax-on-the-poor/
Yup. I don't think the public in general is going to approve of the kind of massive tax increases that MY has in mind, but I also don't think most people object to some level of pigovian tax on alcohol.
You’re missing the point. Both booze taxes and state lotteries function as taxes, even though you can avoid them by voluntarily changing your behavior. See also ACA individual mandate.
The money taken out of the lottery pool before payout is absolutely a tax (even if one just wants to characterize it as a tax on the lottery administrator, although I think it's obviously a tax on the players). There isn't a serious argument that it isn't.
Just like the money taken out from the betting pools at Santa Anita, set by state law, is a tax.
In fact I was in Tennessee when the state lottery passed in 2002. The explicit selling point was the revenue it would bring in for the state in lieu of an income tax.
Except that they know that they are getting some of this revenue from people with addictions. My dad hates the lottery with a passion and when my maternal uncle used to give us scratch tickets in our stockings for Christmas he would make me give them back because they weren't legal for minors. His mom had gambling addiction problems and her wasting money on the lottery that should have gone to food was part of his childhood. She didn't just play the lottery but he viewed the rest as bad people taking advantage of his mother's addiction. The lottery was the state and it landed different.
The thing is, the amount of enjoyment people get out of buying a lottery ticket - despite being poor, or perhaps even *because* of it - exceeds the price of the ticket.
I think that is fine if you are middle class or above and occasionally buy a ticket for fun, no problem. But like all forms of gambling you have people spending a large amount that cant afford it. The study below shows that the harmful behavior is disproportionately hurting the poor.
This from the article:
"An example of what Thornton is referring to is a 2008 report from the Federal Reserve Bank of St. Louis on the relationship between income and lottery revenue. That study found that a large portion of lottery profits come from people who receive some financial subsidy from the government. Other studies have found that people who played the lottery with an income of less than $20,000 annually spent an average of $46 per month on lottery tickets. That comes out to more than $550 per year, and it is nearly double the amount spent in any other income bracket.
“A person making $20,000 spends three times as much on lottery tickets on average than does someone making $30,000,” says Jordan Ballor. “And keep in mind that these numbers represent average spending. For every one or two people who spend just a few bucks a year on lotteries, others spend thousands,” Ballor adds.
What enjoyment is there in a lottery ticket? I at least get the appeal of sports betting. The lottery is just picking a bunch of numbers or scratching a ticket.
I don’t disagree / but it’s not for you or me to judge others’ pursuit of happiness.
I’m guessing that although it’s easily demonstrated that poorer people pay more into the state lotto, what’s not researched with such interest is that they also probably gain far more utility from doing so than other folks do, because it is a rare glimmer of hope for a better day or for upward mobility regardless of the odds being stacked against them. After all - they’re not getting a 20x on that NASDAQ flyer they bought last week. They’re not likely to get an annual bonus at work, and they don’t have a rich aunt who might leave them some dough. But what they *do* have is those scratch off tickets and - hey you never know… and did you hear that so-and-so’s cousin won $5000 last month? I could finally fix my roof and take a long weekend in Gulf Shores…could finally be my lucky day.
So yes - poor folks participate more, but that’s because they actually get more value out of it. That’s my theory at least.
My wife has some friends that love to play. When I ask it is because they love the romanticism and escapism of the possibilities. They also like to talk with each other socially about what they’d do if they win. Plenty of people like to indulge in fantasy of various forms which is very different than a rational investment.
While I agree that you have correctly identified why the poor enjoy the lottery, I feel obliged to point out that you don't actually need to buy a lottery ticket to daydream about how you'd spend a $5k windfall.
Same with table games at a casino. I think slot machines are depressing af, but roulette can be fun for the social interaction aspect. Just stick to the minimum bet lol
The few times I have bought one the enjoyment is in imagining what I might do with the money and a bit of anticipation of "did I get insanely lucky" One ticket covers that quite nicely.
My only real critique of state-run lotteries is allowing them to run advertising for scratch-off games promoting the largest prizes when those prizes have already been won.
My real critique of state-run lotteries is that waiting in line at a store behind some idiot that's purchasing 19 different tickets is Literally Genocide
I would want to see if, as with casino gambling, revenues for lotteries dropped during the Great Recession. If poor people are spending money on the lottery instead of food, we wouldn’t see much of a drop. If it’s disposable income, we’d see a drop in line with other forms of gambling.
“Poor people spend too much money on this thing I disapprove of” isn’t in and of itself a good argument; it reeks of paternalism, in fact.
When poor people waste there money to such an extent that they become even more dependent on welfare, then paternalism is perfectly justified.
Especially if we want to move towards welfare being direct cash payouts, then it is going to be a big problem if the public perceives more and more poor people waste their welfare money on gambling or other clearly counterproductive activities.
“From the Black Sox to Pete Rose, professional athletes have always dipped their toes into the forbidden world of sports gambling. … The real scandal isn’t about the players, it’s about the fans who bet on them.”
This strikes me as totally wrong. First, the *whole reason both of the cases you named were scandals* is that both were out of the ordinary …the Black Sox because no one had ever been accused of throwing the World Series before (less significant regular season games, yes), and Pete Rose because he was the first major betting scandal in MLB since the Black Sox! The sentence I quoted makes it sound like some endless parade of players betting when it’s anything but: players have long understood that betting risks getting them drummed out of the sport, though that understanding may be fading.
Which leads to the second wrong thing, “the real scandal isn’t about the players.” Anyone who reads the comments of these gambling posts knows I’m firmly in agreement with the idea that gambling addiction is a serious problem. But the reason a revelation that Shohei was betting on sports (especially baseball) would be a disaster if it happened is that gambling has a *uniquely* damaging effect on athletes, officials, coaches, etc.: it undermines the whole spirit of fair competition. Knowing Pete Rose was a gambler while managing the Reds, we could never be sure that he wasn’t, say, overusing a pitcher in order to win a bet on a given day. We could never be sure that he wouldn’t get in hock to a gambler and manipulate the lineup as the gambler wanted. Baseball learned in 1919 that there can be no tolerance of betting in a sport because it warps the whole institution.
I’m against broadly legal sports betting. But let’s not minimize the specific impact betting has when it’s done by athletes, particularly since the growing legality of betting is going to lead to more athletes betting, which is one more bad thing about it!
I understand your sentiment here. Legalized sports gambling could open the door to the potential corruption of the sport. Although, I really think, depending how this Jontay Porter situation plays out, that players will see that it's really not worth it.
But the reason why I led the piece with that is because those scandals got ESPN talking heads, sports bloggers, etc. to really start talking about this. They never really paid attention to the headlines about gambling addiction increases among the population at-large. That's a problem.
Agreed, I've never understood how that could be legal. It's not just online sportsbooks- any casino can ban you for winning too much. The implication is that you can only lose money gambling, which makes the industry a lot less sympathetic to me. There should be Fair Play laws where casinos are not allowed to ban too-frequent winners
This isn't popular, but no, you have no right to win. If a casino bans card counting and you count cards, they don't have to take your action. Indeed, the casino that took all the card counters' action would go out of business, which means that if you don't allow casinos to back off card counters, they either get rid of blackjack tables altogether (punishing ordinary players who just want to have some fun) or they go out of business.
A sports book is making a bet against you. If you are betting the 49ers minus 6 points, that means the book is betting the 49ers' opponent plus 6 points. And like any other gambler, they have the right to refuse to take that bet.
For gambling to work (other than peer-to-peer gambling like poker or horse racing), the house has to always win, long term. Otherwise the whole thing shuts down.
No one's saying you have a 'right' to win, I'm looking at the industry from a public policy perspective. They don't have a 'right' to exist and be licensed by the state. If participants can only lose and never win, then logically they're not a game of chance, right? In which case why should the state allow them to exist.
Imagine if the games were rigged and the sports books were blatantly cheating to make sure gamblers could never profit. Conceptually that's inching quite close to 'we don't allow winners!'
Participants can only lose and never win in house banked games, because nobody's in the business of giving their money away.
And the reason these games should exist is because the public wants to be able to gamble. At some point you run into the same problems that Prohibition presented-- you can't flat ban stuff that enough people like to do.
So the public should be able to gamble if it wants to gamble, and the only way gambling can be offered outside of a few peer-to-peer games like poker and horse racing is if the house wins long term. These are facts of life you can't change.
Rigging is different. Rigging is fraud-- the player has the right to have the real odds be whatever the odds presented to them are.
I don't find the Prohibition analogy very useful. Before the recent SC decision, there was a small amount of illegal gambling out there, but really not a ton. I agree that prohibition hasn't really prevented say illegal drug usage, but I think it was working just fine with gambling. And it absolutely worked with mobile gambling from one's phone! I find libertarian mad lib arguments to be shallow and not very persuasive, the state prohibiting lawn darts and thalidomide and Ford Pintos with exploding gas tanks seems to work just fine in practice. Same thing with illegal gambling.
I also think the % of continuously profitable gamblers is very very small, so I don't agree that they're going to bankrupt casinos or sportsbooks. Casino profit margins are extremely high, apparently in the 40s to 50s- if they can't handle the occasionally profitable gambler then they can go out of business, the state doesn't owe them a living
Actually, before the legalization of sports betting we had the Tim Donaghy crooked referee scandal, we had a gigantic crackdown on online poker, and we had plenty of prosecutions of organized crime figures for running gambling and bookmaking rings.
So no, you don't get to fully ban this thing that the public likes. This is a democracy. We have to find a way to rationally regulate it.
And as for your last point, one reason it is very difficult to be an advantage gambler is the casinos back you off. If they didn't, there'd be a lot of them, the casinos would have to shut down, and the people who you morally disapprove of who want to play these games with the house advantage for fun would be denied their fun because you're offended that some sharpies get backed off.
Not parimutuel - but sports betting is also not fully house banked like Blackjack. It’s more like a poker table at a casino where you’re bringing gamblers together to bet against each and the Vig is equivalent to a rake in poker.
In the real world, bets aren’t perfectly balanced, but there’s a portfolio effect where if you have 500 roughly balanced bets you have very little exposure…
Not all books ban or restrict winners. Good ones incorporate the information provided by sharp bettors’ wagers in order to tighten up the lines being offered. And it provides a guide for where the book can allow more unbalanced action (if a known sharp bets $50,000 on team A, the book will consider $60,000 in public action on team B to essentially be balanced…
The remedy is healthy competition. More supply is better. Bookmakers who are known treat winners more fairly will ultimately chase the others out of the market if given a chance. I live in a state where a single vendor was given sports betting monopoly and it is widely acknowledged they can and will do anything they want…
It's true that certain books sometimes make business decisions to take certain action, and that can help advantage players, but it is totally at their discretion and they can also protect themselves and refuse it because it isn't a parimutuel pool.
The house wins by taking the vig. Everyone is ok with that, it’s effectively a fee for service.
But the idea that the house can say “you’re too good at this so I lose money even after the vig” does seem fundamentally unfair. Only bad gamblers should be allowed to gamble?
It's not. Any more than it is "unfair" that any business can't exist unless it makes a profit.
They are entitled to offer, or not offer, their product on any terms that produce profitability. Allowing sharpies to take all their money and put them out of business does not allow that to happen, so they have every right to refuse to do that.
I sort of agree with this, but at the same time it's kind of logical from a "res ipsa loquitur" standpoint (to use a legal term) -- res ipsa loquitur allows a plaintiff to hold a defendant liable for a tort in the absence of actual evidence of wrongdoing by the defendant if the circumstances are such that you would not expect the bad outcome to have occurred without tortious action on the part of the defendant. (Effectively, it shifts the burden of proof to the defendant to bring forth evidence that it didn't do something tortious.) Banning too-frequent/too-large winners is effectively a means of dealing with undetectable cheating schemes. So, I think that such a hypothetical "Fair Play Law" needs in some manner to address that risk.
Hmmmm. That's worth thinking about, but it could probably also be handled just be limiting the size of the bets across the board.
A cheating scheme in sports betting is quite different from a cheating scheme in Blackjack or Roulette for example, because it's not repeatable. If you're counting cards you can do it again and again, but it's going to be much harder to fix NBA games night after night. - and even if you did that, the Sportsbook typically have action on both sides.
“Paternalism” is a pejorative but not an argument. What are your feelings about the rising rates of gambling addiction? Do they not intersect with the public interest at all?
Yeah, rational self-interest is a decent model of human behavior most of the time, but the gambling compulsion— like addictive drugs— is a well-known bug that breaks it.
What is the evidence for rates of gambling addiction?
Separately, paternalism is basically an argument, because it describe a specific "we think we know better than you (but we actually don't)" style of government rule. Being treated like children is something that adults almost universally don't like.
I take the increased calls to gambling problem helplines to be evidence. I guess it's possible that the same number of people are addicted but now they're gambling more, but to me that's a distinction without a difference.
If paternalism is an argument in the way you suggest, then any pejorative can be an argument on similar grounds. "Negligence," used to describe "we knew this would have bad consequence but we did nothing to stop them," is also something adults almost universally don't like. So if you say "Regulations are paternalism," and I say "lack of regulations is negligence," are we having an argument? Or are we just slinging invective?
I would actually describe your example as an argument and the words paternalism and negligence carry enough information that it's a meaningful one. Both describe a particular sort of situation and frame it as "too much of a particular thing", like the difference between being confident and being cocky.
So we'd be disputing whether regulations have gone too far or not enough. The arguments wouldn't have a huge amount of information content and would rely heavily on our own personal judgements, but that's what a lot of legitimate disputes boil down to.
Sure, so maybe it’s just a disagreement over the meaning of “argument.” But since everyone except the most hardcore ancaps agrees that *some* amount of restrictions in citizens’ best interest is appropriate, saying something is paternalism is just a way of saying “I think this is too restrictive,” which we already knew—that’s the premise of the disagreement!
"..centers for problem gambling are noticing an alarming rise in calls...according to the directors of five problem gambling centers, a gambling researcher and an addiction counselor...directors say...We believe...executive director of the National Council on Problem Gambling, a nonprofit organization devoted ...We have every reason to believe...The issue has gained renewed attention in recent weeks after the Los Angeles Dodgers fired Shohei Ohtani’s interpreter...Experts on problem gambling said that despite the companies’ efforts, there’s still a higher risk of addiction..."
At the very least it would be good if this were much more widely known. It's almost hilariously hypocritical when contrasted with their ads (although I could say the same about Charles Schwab or Etrade).
But anyways, refusing to do business with customers who are successful seems really wrong. ad it would be great if it were prevented. It would have large indirect benefits for regular customers, too, because. it would cut into profits and ad-spending.
Uh, no? First, no one is forced to give you money. Just because I am a bookie doesn't mean I have to give you action.
Second, if somehow you succeeded in passing such a terrible law, the logical consequence would just be an increase in rake such that any such possible edge disappears.
Edit: Having said this, a smart bookie or sports book won't do this anyway. They will just keep moving the line one way or another such that they have equal money on both sides, such that, no matter the outcome, they win because of the rake. The only reason to turn anyone down, no matter their likelihood of winning, is to prevent risk of ruin by having too much money on any one side.
I wonder if a Pigouvian tax is the best tool in this case. Compulsive gambling isn't like air pollution, where one self-interested party imposes harms on other people. In this situation people are primarily harming themselves: it's a problem of akrasia, not a coordination problem.
What if the federal government maintained a list of US citizens who were legally prohibited from gambling? Casinos and credit card companies that enabled gambling transactions by those people would be fined. And any adult who felt she had a gambling problem could sign up for the list.
The self-listing wouldn't be irreversible; you could take your name off at any time. But it would cost $100 and take a week to process.
I've always thought this would work well for alcohol and tobacco sales as well. It wouldn't be perfectly enforced but why has it not even been tried?
You can do that on a state level already. But they're free (i think because people who are wanting to self limit are likely to be really in the hole already
Read my book, ‘Sports Betting for Dummies’ (Wiley, 2020).
States who legalized also funded big increases in problem gambling resources. Are we sure there are actually more people with problems? Or is it just the same number of people but we have better ability to detect them? (I’m not claiming one or the other is true - just asking the question…)
Banning mobile gaming is absurd. Here’s a better idea: make apps smarter. Force bettors to set deposit limits in size and frequency. Start new accounts with lower deposit and betting limits, let them work their way up. Force a 24 hour waiting period between deposit and availability. Make it like lottery tickets (in some states at least) where deposits can’t be made on credit. Check credit scores for bigger deposits. Have sports books share transaction data and have AI identify problem gambling patterns. Have a national registry of gamblers that’s shared by sports books, send deposit notices to bettors’ spouses. There are dozens of ways to cut risk down without ruining it for the rest of us.
Sports betting is popular because people like to do it (duh!) Even before legalization it was still an 11 or 12 figure industry in the United States, largely unregulated. Bringing the industry into the daylight means more resources available for problem gamblers and it actually reduces the chances and scale of gambling scandals. (The industry really only works if bettors believe games are fair).
We could ban recreational swimming to reduce drowning deaths to near zero. The world would survive if we filled in every swimming pool and made lakes and beaches off limits. We don’t do that because swimming provides tremendous utility to billions people. So we accept some downside and do our best to mitigate risks…
What Ben fails to do is make any attempt to balance cost and benefit. Like any recreational activity sports betting provides utility in the form of enjoyment/pursuit of happiness…just as there is some non zero risk of harm. If you make the goal ‘zero harm’ you wipe out much of the benefit. If 1000 people have a healthy relationship with mobile betting for every one that has an unhealthy one…I think it’s worth a conversation to see if there’s something better than just shutting the whole thing down.
Interesting and creative policy ideas here. Part of what I like about Ben’s writing on this subject is that he avoids getting too deep into the hyper-moralizing rhetoric, and favors a more light-hearted and funny approach. It’s a serious subject, but it’s still important to entertain the reader!
Not sure I like the progressive tax for betting frequency idea—it doesn’t seem problematic to place frequent small wagers if all the bets are small, say $50. The most problematic situation are addicts who lose all of their savings, so perhaps just making sure people aren’t able to bet more than some fraction of their gross income on a yearly basis would be reasonable? Perhaps hard to enforce but maybe this could be assessed by analyzing tax returns and casino betting logs, and putting any violators on a banned list for a year. I do like the idea about taxing gambling winnings at a higher rate—getting rid of the gambling loss deduction is appealing but it would be useful to track losses so encouraging people to report their losses seems good to keep. With regard to disincentivizing illegal betting, how about confiscating winnings from illegal bettors? If a would-be illegal gambler knew he might lose all winnings when the illegal-book eventually got busted, perhaps he would reconsider?
Agree that taxing frequency is not the way to go. People who make 100 or even a 1000 small bets over the course of a year are not a problem even if their losing over half of them. People who make 10,000 small bets and break even are not a problem.
When you set up an investment or brokerage account they ask you all sorts of questions about your income, savings and investment experience, and then they decide what sorts of trade you're allowed to make. Seems like that's a good way to start here. There are probably other questions they could ask and stats they could track to prevent big losses from compulsive gamblers, if they were required to.
2. Gambling provides a useful information service. It's better to focus on stopping people who lose too much from gambling rather than making gambling in general difficult. To do so distorts prices. Thi isn't such an issue in sports gambling but if poltical gambling is ever legalised accuracy will matter.
3. Gambling is a more accurate information source than many. It is useful to have gambling content in sports shows because it's better analysis than many other places. Taxing this has a cost.
4. Tax the ads rather than banning them. Until gambling orgs sort their act out, tax them.
5. People should be able to do things, even harmful things. As a liberal I don't want to ban people from engaging in trades with other consenting adults (which is what gambling is). I like the idea of on location only gambling, but I'm wary of banning people entirely from consensual activity. It seems better to tax forms or methods of gambling which have the worst outcomes.
Gambling provides useful information about important things like election outcomes, which is inherently a niche market for bettors. The social value of getting a much more precise estimate of who’s gonna win the NBA finals isn’t worth exposing a much broader market to addiction risks. And in sports the uncertainty is part of the fun.
It does, actually. Indeed, in the stock market (where we actually think an important societal end is being served), the gambling aspect of it is actually crucial to producing an efficient market that provides good information.
However, that doesn't mean you should have tons of unregulated, legal gambling just to obtain information. The harms can outweigh it.
In math class we were taught that insurance essentially is gambling—an insurance policy is a bet you hope never to win. The insurance company's expected value from the policy is higher than yours (or else they wouldn't sell it to you), but the potential losses from a disaster are greater than you can afford to replace, making the "bad bet" of insurance the safest option. (Of course, that's very different from regular gambling, which has a much more dubious social benefit.)
Professor Sunstein coined "sludge" as "making something harder to do" as a contrast or even a special case of "nudge" that alters the choice architecture.
Gambling companies engage in a variety of "dark nudges" [PDF]
Is there a dollars and cents cost to society for gambling addicts that outweighs the tax receipts and entertainment value for the large majority of us? Your New Jersey to Delaware comparison is maybe more apt than the Nevada/Utah juxtaposition.
I think it’s like any sort of addiction - we are all better off if our society is full of people living up to their own goals for themselves rather than with people that keep falling short because they get distracted by something momentarily appealing.
The difference as i see it is that drug and alcohol addicts cause more collateral damage to the rest of us than does gambling. Car accidents the most obvious.
When you say the large majority of us, I assume you mean the large majority *of gamblers*? Because if you’re talking about the large majority of society, that majority gets zero benefit from gambling and many of us find the ads, etc. obnoxious.
I think people getting addicted to anything has a public cost, as Kenny suggested, even aside from the small but rising number of people getting into real financial trouble (with downstream effects on their family, their productivity, etc.)
Where the US finds itself now, is where we were in Australia 10 years ago, and let me tell you its going to get a lot worse. Mobile betting is super easy, and it is everywhere! What you call prop bets are called multis and they are very popular. So many providers trying to separate themselves from other, offering more and more persuasive offers, that are obviously very enticing.
Government regulation and involvement exists but does not appear to be very successful to date.
Taxes are collected on turnover, so some governments are conflicted. Too much is left to self-regulation and anti-gambling organisations,
I'm usually down for Pigouvian taxes, but I'm not sure this is the best case because the whole hazard with gambling is losing your money, and this basically guarantees it. I'd be more open to an annual limit of losses. I like the idea of only having it available at brick and mortar casinos or sports bars, and then maybe like a $1,000 loss limit or 2% of your income per year, whichever is greater. Something like that.
I like sports betting and poker. If I have vices, those are them. Then again, I'm pretty good at both, so I'm up on net across my whole life of betting, which is probably different than most addicts...
Really appreciate this article. One of the things that has really concerned me with the rise of the mobile gambling industry is just a sheer number of ads that people are getting bombarded with. It's election season so my ad content has changed but for a while during the pandemic especially, it seemed like every other AD I got served on YouTube was for one of the online sports books, FanDuel or DraftKings. Plus there were big billboards with ads for one of those or other sports books. And that kind of wall to wall ad coverage concerns me. It's also something I think about when we moved to legalize marijuana, how many ads for marijuana are we going to be blanketed with? It's a bit of a sticky issue in the us because we have first amendment restrictions and so can't just restrict advertising without cause.
I think the Supreme Court should treat advertising the same way it treats pornography: fine, it's protected by the First Amendment, but you can legislate to prohibit minors from seeing certain types of it. In practice that would kill most forms of obtrusive ads in the categories Congress wanted to ban.
It’s striking how different the ad ecosystems we all encounter are! Probably the biggest difference is that I have a premium YouTube account, so I only get the sponsored content ads, but as a result, basically the only ads I get are for Hello Fresh, Nebula, CuriosityStream, and various VPNs. I definitely haven’t seen any sports betting ads.
It makes me wonder how different and weird someone else’s ad ecosystem might look.
I have YouTube Premium and like half of the sponsored content I get is for gambling.
"...half of the sponsored content I get is for gambling"
You can toggle the "Degenerate" tag under Advanced Preferences. Or at least I can.
YouTube Premium has ads? I never see these. Maybe because my watch history is off.
No actual ads - just the minute of “sponsored content” within the video.
Maybe I'm just watching different videos but I still don't know what you're referring to. Can you post a link to an example?
Some of the YouTubers I watch regularly include Adam Ragusea, JJ McCullough, Wendover Productions, Sabine Hossenfelder. I’m pretty sure that almost any video by one of them has a minute somewhere in the video where they take a break to talk about the sponsor of the video. (I’m not linking right now because I’m on my phone and don’t want to start a YouTube video.)
Okay, I think I understand now. So this is just a part of the video itself, is not avoidable, and is not customized based on who is watching it? I was confused because, in addition to not watching these types of videos myself, you had mentioned seeing promos for certain companies and another person replied that they see a lot of ones for gambling. I guess that is just because you both are watching very different videos.
God bless Sabine for always putting the ads at the end.
The worst aspect is how sportsbook advertising gets slipped into sports media. You can’t listen to a podcast or radio show without hearing the hosts talk about their favorite prop bets (the fact that they always push prop bets and parlays on social media is how you know they’re doing it at the request of the book.)
Or not…Maybe they’re talking up that prop bet simply because sports betting is in itself a talking sport.
Sports betting odds provide an endless well of content for podcasters and talking heads. Public expectations for game margin, quarter/half margin, specific player stats is a perfect starting point for taking a stance and having a discussion.
No, lots of them pretty openly announce that it’s sponsored by a sportsbook.
100% this, I am uncomfortable the extent to which all sports leagues have gotten into bed with the gambling companies. Maybe banning gambling ads during actual sports broadcasts is the place to start.
In Washington we have full legalization and a booming industry but tight restrictions on ads. Basically folks can pretty much only promote via their name and signage design. By the time my daughter and friends were pretty young they knew exactly what businesses were weed shops because of theri giant 21+ signs which are huge and they started to figure out the weed based puns in the names. Ironically, I think it has made weed seem lamer to her generation that they associate it so much with their middle aged parents and really sad puns.
Sports betting is the controversy du jour, but have we ignored the pervasive harm of all betting, the vast majority being state sponsored lotteries. Since 1945 with the first lottery in New Hampshire, states have gotten in the business of sponsoring lotteries that repeated studies show disproportionately hurt the poor as a form of regressive taxation, where the poor bear the brunt of the 30% cut that the state takes for it.
The argument that people would alternately play the numbers etc. is valid, but what bothers me is the huge advertising budgets that states use to encourage people to do stupid behaviors. Yes, no harm in a reasonably well off person occasionally buying a ticket, but it ignores the fact that poor people spend a large part of their income on this and as a group lose money.
Also true.
States restricting the advertising for gambling makes sense, as it does incentive bad behavior.
But I really don't like the framing of state lotteries as 'taxation', much less 'regressive taxation'.
No one is being forced to participate. And it isn't something required to live like food or shelter.
If it -were- any kind of taxation, it would be a stupid tax.
It's a Picouvian tax on stupidity.
But the state is at least partly responsible for educating people, or at minimum not misleading them, so when it buys advertising saying that buying a motto ticket is a good idea, it’s working against its own telos.
Oh. I'm not a fan of the lotto if that wasn't clear.
This is definitely a thing we agree on. Life taxes stupidity enough without the government stepping on the scale
I might have said that if I knew what it meant, but I learned a new word, though the way WIki describes it as more a tax on bad behavior like fizzy drinks or alcohol, though maybe that makes sense. Thanks for a new word https://en.wikipedia.org/wiki/Pigouvian_tax
I only play when the lotto gets over about half a billion because anything less just isn’t worth it. Im not going looking a USED Yacht like an asshole.
This also means I only throw a few bucks at it a couple times a year.
Yeah, I don't mean to imply that everyone that engages with gambling or the lotto is stupid.
Just that stupid people are more likely to get in trouble with gambling.
I never said I wasn’t stupid : D
Belisarius's comment here nicely captures what I think is a central difference that tends to separate right and left: the former's avoidance of actual consequences. Whether we call it a form of taxation or we call it a fire hydrant, state lotteries in practice suck money out of the pockets of the less affluent. In a word, they're regressive.
How am I (or the right) avoiding consequences here?
It doesn't suck money out of the pockets of the less affluent by dint of them being less affluent.
It does it because the less affluent tend to repeatedly make bad decisions.
By all means, be paternalistic and (try to) prevent poor people from gambling. Because gambling is usually dumb and tends to have bad consequences. I fully approve.
The difference between right and left here is that:
A) the right generally wouldn't much care about this at all (at least at a societal level) if welfare weren't a factor.
B) the right may be less willing to tolerate general restrictions on everyone when the problem is only with poor people. Just restrict poor people from engaging with this.
OK, call it what you will, but it is a money drain that multiple studies show is particularly damaging to the poor. I think of it like a tax because 30% of the money spent goes to the government and it is regressive in that it reflects a much higher percent of income among the poor. This has that view: https://erlc.com/resource-library/articles/state-lotteries-are-an-exploitative-tax-on-the-poor/
I don't disagree. Just objecting to it being framed as a tax, and especially a regressive tax.
Usually when that framing is accepted, people propose all kinds of counterproductive things to try to remedy the regressiveness.
I think “end state lotteries” is a one-and-done solution.
And nobody is being forced to participate in alcohol taxation—just don’t drink!
Yup. I don't think the public in general is going to approve of the kind of massive tax increases that MY has in mind, but I also don't think most people object to some level of pigovian tax on alcohol.
You’re missing the point. Both booze taxes and state lotteries function as taxes, even though you can avoid them by voluntarily changing your behavior. See also ACA individual mandate.
The money taken out of the lottery pool before payout is absolutely a tax (even if one just wants to characterize it as a tax on the lottery administrator, although I think it's obviously a tax on the players). There isn't a serious argument that it isn't.
Just like the money taken out from the betting pools at Santa Anita, set by state law, is a tax.
I guess you could call a "rake" a "tax."
In fact I was in Tennessee when the state lottery passed in 2002. The explicit selling point was the revenue it would bring in for the state in lieu of an income tax.
Except that they know that they are getting some of this revenue from people with addictions. My dad hates the lottery with a passion and when my maternal uncle used to give us scratch tickets in our stockings for Christmas he would make me give them back because they weren't legal for minors. His mom had gambling addiction problems and her wasting money on the lottery that should have gone to food was part of his childhood. She didn't just play the lottery but he viewed the rest as bad people taking advantage of his mother's addiction. The lottery was the state and it landed different.
A stupid tax perhaps, but a tax on stupidity definitely
The thing is, the amount of enjoyment people get out of buying a lottery ticket - despite being poor, or perhaps even *because* of it - exceeds the price of the ticket.
You could say the same for heroin and yet that is illegal due to the risk of addiction.
It's possible heroin has other downsides. You can't OD on lottery tickets to start.
But you can still go broke. The negative externality is the fallout of a person financially ruining themselves
"You can't OD on lottery tickets to start."
https://xkcd.com/1827/ seems relevant.
I think that is fine if you are middle class or above and occasionally buy a ticket for fun, no problem. But like all forms of gambling you have people spending a large amount that cant afford it. The study below shows that the harmful behavior is disproportionately hurting the poor.
This from the article:
"An example of what Thornton is referring to is a 2008 report from the Federal Reserve Bank of St. Louis on the relationship between income and lottery revenue. That study found that a large portion of lottery profits come from people who receive some financial subsidy from the government. Other studies have found that people who played the lottery with an income of less than $20,000 annually spent an average of $46 per month on lottery tickets. That comes out to more than $550 per year, and it is nearly double the amount spent in any other income bracket.
“A person making $20,000 spends three times as much on lottery tickets on average than does someone making $30,000,” says Jordan Ballor. “And keep in mind that these numbers represent average spending. For every one or two people who spend just a few bucks a year on lotteries, others spend thousands,” Ballor adds.
Article : https://erlc.com/resource-library/articles/state-lotteries-are-an-exploitative-tax-on-the-poor/
What enjoyment is there in a lottery ticket? I at least get the appeal of sports betting. The lottery is just picking a bunch of numbers or scratching a ticket.
I don’t disagree / but it’s not for you or me to judge others’ pursuit of happiness.
I’m guessing that although it’s easily demonstrated that poorer people pay more into the state lotto, what’s not researched with such interest is that they also probably gain far more utility from doing so than other folks do, because it is a rare glimmer of hope for a better day or for upward mobility regardless of the odds being stacked against them. After all - they’re not getting a 20x on that NASDAQ flyer they bought last week. They’re not likely to get an annual bonus at work, and they don’t have a rich aunt who might leave them some dough. But what they *do* have is those scratch off tickets and - hey you never know… and did you hear that so-and-so’s cousin won $5000 last month? I could finally fix my roof and take a long weekend in Gulf Shores…could finally be my lucky day.
So yes - poor folks participate more, but that’s because they actually get more value out of it. That’s my theory at least.
My wife has some friends that love to play. When I ask it is because they love the romanticism and escapism of the possibilities. They also like to talk with each other socially about what they’d do if they win. Plenty of people like to indulge in fantasy of various forms which is very different than a rational investment.
While I agree that you have correctly identified why the poor enjoy the lottery, I feel obliged to point out that you don't actually need to buy a lottery ticket to daydream about how you'd spend a $5k windfall.
Same with table games at a casino. I think slot machines are depressing af, but roulette can be fun for the social interaction aspect. Just stick to the minimum bet lol
The few times I have bought one the enjoyment is in imagining what I might do with the money and a bit of anticipation of "did I get insanely lucky" One ticket covers that quite nicely.
My only real critique of state-run lotteries is allowing them to run advertising for scratch-off games promoting the largest prizes when those prizes have already been won.
My real critique of state-run lotteries is that waiting in line at a store behind some idiot that's purchasing 19 different tickets is Literally Genocide
Well, yes, that's obnoxious too. Especially when the person stands there and scratches them off and the cashier doesn't tell them to move to the side.
but at least in this case the money is flowing to the state. with sports gambling the money largely flows to fanduel and draftkings
I would want to see if, as with casino gambling, revenues for lotteries dropped during the Great Recession. If poor people are spending money on the lottery instead of food, we wouldn’t see much of a drop. If it’s disposable income, we’d see a drop in line with other forms of gambling.
“Poor people spend too much money on this thing I disapprove of” isn’t in and of itself a good argument; it reeks of paternalism, in fact.
When poor people waste there money to such an extent that they become even more dependent on welfare, then paternalism is perfectly justified.
Especially if we want to move towards welfare being direct cash payouts, then it is going to be a big problem if the public perceives more and more poor people waste their welfare money on gambling or other clearly counterproductive activities.
"...to such an extent that they become even more dependent on welfare, then paternalism is perfectly justified"
A very neat tautology.
I mean, that's what happens when you get more and more welfare in place.
It acts as a ratchet for more govt restrictions, because suddenly I'm having to pay for your screw ups.
I'd rather just limit welfare, but I know that's not a popular take here.
"I'd rather just limit welfare..."
Clearly you hate the poors.
“From the Black Sox to Pete Rose, professional athletes have always dipped their toes into the forbidden world of sports gambling. … The real scandal isn’t about the players, it’s about the fans who bet on them.”
This strikes me as totally wrong. First, the *whole reason both of the cases you named were scandals* is that both were out of the ordinary …the Black Sox because no one had ever been accused of throwing the World Series before (less significant regular season games, yes), and Pete Rose because he was the first major betting scandal in MLB since the Black Sox! The sentence I quoted makes it sound like some endless parade of players betting when it’s anything but: players have long understood that betting risks getting them drummed out of the sport, though that understanding may be fading.
Which leads to the second wrong thing, “the real scandal isn’t about the players.” Anyone who reads the comments of these gambling posts knows I’m firmly in agreement with the idea that gambling addiction is a serious problem. But the reason a revelation that Shohei was betting on sports (especially baseball) would be a disaster if it happened is that gambling has a *uniquely* damaging effect on athletes, officials, coaches, etc.: it undermines the whole spirit of fair competition. Knowing Pete Rose was a gambler while managing the Reds, we could never be sure that he wasn’t, say, overusing a pitcher in order to win a bet on a given day. We could never be sure that he wouldn’t get in hock to a gambler and manipulate the lineup as the gambler wanted. Baseball learned in 1919 that there can be no tolerance of betting in a sport because it warps the whole institution.
I’m against broadly legal sports betting. But let’s not minimize the specific impact betting has when it’s done by athletes, particularly since the growing legality of betting is going to lead to more athletes betting, which is one more bad thing about it!
I understand your sentiment here. Legalized sports gambling could open the door to the potential corruption of the sport. Although, I really think, depending how this Jontay Porter situation plays out, that players will see that it's really not worth it.
But the reason why I led the piece with that is because those scandals got ESPN talking heads, sports bloggers, etc. to really start talking about this. They never really paid attention to the headlines about gambling addiction increases among the population at-large. That's a problem.
ESPN, which literally has a show called the Daily Wager.
The Barstoolification of sports media has been terrible all around.
If you're exceedingly successful betting an online sportsbook can ban you for simply being too good.
I'd rather us regulate against that practice than this proposed paternalism.
Agreed, I've never understood how that could be legal. It's not just online sportsbooks- any casino can ban you for winning too much. The implication is that you can only lose money gambling, which makes the industry a lot less sympathetic to me. There should be Fair Play laws where casinos are not allowed to ban too-frequent winners
This isn't popular, but no, you have no right to win. If a casino bans card counting and you count cards, they don't have to take your action. Indeed, the casino that took all the card counters' action would go out of business, which means that if you don't allow casinos to back off card counters, they either get rid of blackjack tables altogether (punishing ordinary players who just want to have some fun) or they go out of business.
A sports book is making a bet against you. If you are betting the 49ers minus 6 points, that means the book is betting the 49ers' opponent plus 6 points. And like any other gambler, they have the right to refuse to take that bet.
For gambling to work (other than peer-to-peer gambling like poker or horse racing), the house has to always win, long term. Otherwise the whole thing shuts down.
No one's saying you have a 'right' to win, I'm looking at the industry from a public policy perspective. They don't have a 'right' to exist and be licensed by the state. If participants can only lose and never win, then logically they're not a game of chance, right? In which case why should the state allow them to exist.
Imagine if the games were rigged and the sports books were blatantly cheating to make sure gamblers could never profit. Conceptually that's inching quite close to 'we don't allow winners!'
Participants can only lose and never win in house banked games, because nobody's in the business of giving their money away.
And the reason these games should exist is because the public wants to be able to gamble. At some point you run into the same problems that Prohibition presented-- you can't flat ban stuff that enough people like to do.
So the public should be able to gamble if it wants to gamble, and the only way gambling can be offered outside of a few peer-to-peer games like poker and horse racing is if the house wins long term. These are facts of life you can't change.
Rigging is different. Rigging is fraud-- the player has the right to have the real odds be whatever the odds presented to them are.
I don't find the Prohibition analogy very useful. Before the recent SC decision, there was a small amount of illegal gambling out there, but really not a ton. I agree that prohibition hasn't really prevented say illegal drug usage, but I think it was working just fine with gambling. And it absolutely worked with mobile gambling from one's phone! I find libertarian mad lib arguments to be shallow and not very persuasive, the state prohibiting lawn darts and thalidomide and Ford Pintos with exploding gas tanks seems to work just fine in practice. Same thing with illegal gambling.
I also think the % of continuously profitable gamblers is very very small, so I don't agree that they're going to bankrupt casinos or sportsbooks. Casino profit margins are extremely high, apparently in the 40s to 50s- if they can't handle the occasionally profitable gambler then they can go out of business, the state doesn't owe them a living
Actually, before the legalization of sports betting we had the Tim Donaghy crooked referee scandal, we had a gigantic crackdown on online poker, and we had plenty of prosecutions of organized crime figures for running gambling and bookmaking rings.
So no, you don't get to fully ban this thing that the public likes. This is a democracy. We have to find a way to rationally regulate it.
And as for your last point, one reason it is very difficult to be an advantage gambler is the casinos back you off. If they didn't, there'd be a lot of them, the casinos would have to shut down, and the people who you morally disapprove of who want to play these games with the house advantage for fun would be denied their fun because you're offended that some sharpies get backed off.
Not parimutuel - but sports betting is also not fully house banked like Blackjack. It’s more like a poker table at a casino where you’re bringing gamblers together to bet against each and the Vig is equivalent to a rake in poker.
In the real world, bets aren’t perfectly balanced, but there’s a portfolio effect where if you have 500 roughly balanced bets you have very little exposure…
Not all books ban or restrict winners. Good ones incorporate the information provided by sharp bettors’ wagers in order to tighten up the lines being offered. And it provides a guide for where the book can allow more unbalanced action (if a known sharp bets $50,000 on team A, the book will consider $60,000 in public action on team B to essentially be balanced…
The remedy is healthy competition. More supply is better. Bookmakers who are known treat winners more fairly will ultimately chase the others out of the market if given a chance. I live in a state where a single vendor was given sports betting monopoly and it is widely acknowledged they can and will do anything they want…
It's true that certain books sometimes make business decisions to take certain action, and that can help advantage players, but it is totally at their discretion and they can also protect themselves and refuse it because it isn't a parimutuel pool.
The house wins by taking the vig. Everyone is ok with that, it’s effectively a fee for service.
But the idea that the house can say “you’re too good at this so I lose money even after the vig” does seem fundamentally unfair. Only bad gamblers should be allowed to gamble?
It's not. Any more than it is "unfair" that any business can't exist unless it makes a profit.
They are entitled to offer, or not offer, their product on any terms that produce profitability. Allowing sharpies to take all their money and put them out of business does not allow that to happen, so they have every right to refuse to do that.
I sort of agree with this, but at the same time it's kind of logical from a "res ipsa loquitur" standpoint (to use a legal term) -- res ipsa loquitur allows a plaintiff to hold a defendant liable for a tort in the absence of actual evidence of wrongdoing by the defendant if the circumstances are such that you would not expect the bad outcome to have occurred without tortious action on the part of the defendant. (Effectively, it shifts the burden of proof to the defendant to bring forth evidence that it didn't do something tortious.) Banning too-frequent/too-large winners is effectively a means of dealing with undetectable cheating schemes. So, I think that such a hypothetical "Fair Play Law" needs in some manner to address that risk.
Hmmmm. That's worth thinking about, but it could probably also be handled just be limiting the size of the bets across the board.
A cheating scheme in sports betting is quite different from a cheating scheme in Blackjack or Roulette for example, because it's not repeatable. If you're counting cards you can do it again and again, but it's going to be much harder to fix NBA games night after night. - and even if you did that, the Sportsbook typically have action on both sides.
Fair point about the distinction between sports betting and casino games!
“Paternalism” is a pejorative but not an argument. What are your feelings about the rising rates of gambling addiction? Do they not intersect with the public interest at all?
Yeah, rational self-interest is a decent model of human behavior most of the time, but the gambling compulsion— like addictive drugs— is a well-known bug that breaks it.
What is the evidence for rates of gambling addiction?
Separately, paternalism is basically an argument, because it describe a specific "we think we know better than you (but we actually don't)" style of government rule. Being treated like children is something that adults almost universally don't like.
I take the increased calls to gambling problem helplines to be evidence. I guess it's possible that the same number of people are addicted but now they're gambling more, but to me that's a distinction without a difference.
If paternalism is an argument in the way you suggest, then any pejorative can be an argument on similar grounds. "Negligence," used to describe "we knew this would have bad consequence but we did nothing to stop them," is also something adults almost universally don't like. So if you say "Regulations are paternalism," and I say "lack of regulations is negligence," are we having an argument? Or are we just slinging invective?
I would actually describe your example as an argument and the words paternalism and negligence carry enough information that it's a meaningful one. Both describe a particular sort of situation and frame it as "too much of a particular thing", like the difference between being confident and being cocky.
So we'd be disputing whether regulations have gone too far or not enough. The arguments wouldn't have a huge amount of information content and would rely heavily on our own personal judgements, but that's what a lot of legitimate disputes boil down to.
Sure, so maybe it’s just a disagreement over the meaning of “argument.” But since everyone except the most hardcore ancaps agrees that *some* amount of restrictions in citizens’ best interest is appropriate, saying something is paternalism is just a way of saying “I think this is too restrictive,” which we already knew—that’s the premise of the disagreement!
"the increased calls to gambling problem helplines to be evidence"
What "evidence"? Ben's claim?
https://www.nbcnews.com/news/amp/rcna145539
"..centers for problem gambling are noticing an alarming rise in calls...according to the directors of five problem gambling centers, a gambling researcher and an addiction counselor...directors say...We believe...executive director of the National Council on Problem Gambling, a nonprofit organization devoted ...We have every reason to believe...The issue has gained renewed attention in recent weeks after the Los Angeles Dodgers fired Shohei Ohtani’s interpreter...Experts on problem gambling said that despite the companies’ efforts, there’s still a higher risk of addiction..."
That's not evidence. It's barely journalism.
"Being treated like children is something that adults almost universally don't like"
https://thehill.com/homenews/campaign/4569394-hillary-clinton-voters-upset-biden-trump-choice-get-over-yourself/
I don't believe it is fair to sacrifice the freedom of the responsible for the welfare of the irresponsible at this particular margin, no.
The older I get the more I think paternalism is a positive
"The older I get the more I think paternalism is a positive"
Imagine if you were a father!
At the very least it would be good if this were much more widely known. It's almost hilariously hypocritical when contrasted with their ads (although I could say the same about Charles Schwab or Etrade).
But anyways, refusing to do business with customers who are successful seems really wrong. ad it would be great if it were prevented. It would have large indirect benefits for regular customers, too, because. it would cut into profits and ad-spending.
Uh, no? First, no one is forced to give you money. Just because I am a bookie doesn't mean I have to give you action.
Second, if somehow you succeeded in passing such a terrible law, the logical consequence would just be an increase in rake such that any such possible edge disappears.
Edit: Having said this, a smart bookie or sports book won't do this anyway. They will just keep moving the line one way or another such that they have equal money on both sides, such that, no matter the outcome, they win because of the rake. The only reason to turn anyone down, no matter their likelihood of winning, is to prevent risk of ruin by having too much money on any one side.
Or limit your bets to such small amounts that you're effectively banned from placing all but the squarest wagers available
I wonder if a Pigouvian tax is the best tool in this case. Compulsive gambling isn't like air pollution, where one self-interested party imposes harms on other people. In this situation people are primarily harming themselves: it's a problem of akrasia, not a coordination problem.
What if the federal government maintained a list of US citizens who were legally prohibited from gambling? Casinos and credit card companies that enabled gambling transactions by those people would be fined. And any adult who felt she had a gambling problem could sign up for the list.
The self-listing wouldn't be irreversible; you could take your name off at any time. But it would cost $100 and take a week to process.
I've always thought this would work well for alcohol and tobacco sales as well. It wouldn't be perfectly enforced but why has it not even been tried?
You can do that on a state level already. But they're free (i think because people who are wanting to self limit are likely to be really in the hole already
I didn't know that. Which states do it, and are we talking about gambling or drinking/smoking?
Gambling. I don't actually know the full list but I know Ohio and Pennsylvania do. It's officially called self-exclusion.
I think getting rid of the cash advance ATMs at casinos would be a good start
Mark Kleiman recommended this for marijuana sales but I don’t think any state implemented that list.
In theory this should be available for a ton of things. (Make yourself pay a fine if you don't go to the gym for a week!)
It would cost money to set up, but you could easily set the penalties at a level that covered the government's costs.
Hot take: rather than bet on sports to make it more fun to watch, find other ways, like heavy drinking.
Or cannabis! You can read more about this proposal in my new feature, the Baked Takery.
Baked Tokery. (I'll see myself out).
I agree wholeheartedly with the sentiment behind this piece, the proposed reforms, and the final paragraph. Let me guess — Nuggets v. Celtics finals?
ATM the 1st place Timberwolves only have 9:1 odds to make the finals which seems low.
That’s a reflection of KAT’s injury — if he’s back and healthy, I’d expect those odds to rise.
Even so, Denver is the champion until proven otherwise
Right so buy right now and sell when he comes back. The market seems to be undervaluing the likelihood of his return.
Read my book, ‘Sports Betting for Dummies’ (Wiley, 2020).
States who legalized also funded big increases in problem gambling resources. Are we sure there are actually more people with problems? Or is it just the same number of people but we have better ability to detect them? (I’m not claiming one or the other is true - just asking the question…)
Banning mobile gaming is absurd. Here’s a better idea: make apps smarter. Force bettors to set deposit limits in size and frequency. Start new accounts with lower deposit and betting limits, let them work their way up. Force a 24 hour waiting period between deposit and availability. Make it like lottery tickets (in some states at least) where deposits can’t be made on credit. Check credit scores for bigger deposits. Have sports books share transaction data and have AI identify problem gambling patterns. Have a national registry of gamblers that’s shared by sports books, send deposit notices to bettors’ spouses. There are dozens of ways to cut risk down without ruining it for the rest of us.
Sports betting is popular because people like to do it (duh!) Even before legalization it was still an 11 or 12 figure industry in the United States, largely unregulated. Bringing the industry into the daylight means more resources available for problem gamblers and it actually reduces the chances and scale of gambling scandals. (The industry really only works if bettors believe games are fair).
We could ban recreational swimming to reduce drowning deaths to near zero. The world would survive if we filled in every swimming pool and made lakes and beaches off limits. We don’t do that because swimming provides tremendous utility to billions people. So we accept some downside and do our best to mitigate risks…
What Ben fails to do is make any attempt to balance cost and benefit. Like any recreational activity sports betting provides utility in the form of enjoyment/pursuit of happiness…just as there is some non zero risk of harm. If you make the goal ‘zero harm’ you wipe out much of the benefit. If 1000 people have a healthy relationship with mobile betting for every one that has an unhealthy one…I think it’s worth a conversation to see if there’s something better than just shutting the whole thing down.
Interesting and creative policy ideas here. Part of what I like about Ben’s writing on this subject is that he avoids getting too deep into the hyper-moralizing rhetoric, and favors a more light-hearted and funny approach. It’s a serious subject, but it’s still important to entertain the reader!
Not sure I like the progressive tax for betting frequency idea—it doesn’t seem problematic to place frequent small wagers if all the bets are small, say $50. The most problematic situation are addicts who lose all of their savings, so perhaps just making sure people aren’t able to bet more than some fraction of their gross income on a yearly basis would be reasonable? Perhaps hard to enforce but maybe this could be assessed by analyzing tax returns and casino betting logs, and putting any violators on a banned list for a year. I do like the idea about taxing gambling winnings at a higher rate—getting rid of the gambling loss deduction is appealing but it would be useful to track losses so encouraging people to report their losses seems good to keep. With regard to disincentivizing illegal betting, how about confiscating winnings from illegal bettors? If a would-be illegal gambler knew he might lose all winnings when the illegal-book eventually got busted, perhaps he would reconsider?
Agree that taxing frequency is not the way to go. People who make 100 or even a 1000 small bets over the course of a year are not a problem even if their losing over half of them. People who make 10,000 small bets and break even are not a problem.
When you set up an investment or brokerage account they ask you all sorts of questions about your income, savings and investment experience, and then they decide what sorts of trade you're allowed to make. Seems like that's a good way to start here. There are probably other questions they could ask and stats they could track to prevent big losses from compulsive gamblers, if they were required to.
I like that idea simply for the nanny state surveillance aspect
Some quick (unpolished) thoughts.
1. We agree that gambling ruins lots of lives.
2. Gambling provides a useful information service. It's better to focus on stopping people who lose too much from gambling rather than making gambling in general difficult. To do so distorts prices. Thi isn't such an issue in sports gambling but if poltical gambling is ever legalised accuracy will matter.
3. Gambling is a more accurate information source than many. It is useful to have gambling content in sports shows because it's better analysis than many other places. Taxing this has a cost.
4. Tax the ads rather than banning them. Until gambling orgs sort their act out, tax them.
5. People should be able to do things, even harmful things. As a liberal I don't want to ban people from engaging in trades with other consenting adults (which is what gambling is). I like the idea of on location only gambling, but I'm wary of banning people entirely from consensual activity. It seems better to tax forms or methods of gambling which have the worst outcomes.
Gambling provides useful information about important things like election outcomes, which is inherently a niche market for bettors. The social value of getting a much more precise estimate of who’s gonna win the NBA finals isn’t worth exposing a much broader market to addiction risks. And in sports the uncertainty is part of the fun.
Yeah that's probably right.
I still think the liberal point about banning things seems relevant.
"Gambling provides a useful information service"
Wait, wait ... WHAT?!!!
It does, actually. Indeed, in the stock market (where we actually think an important societal end is being served), the gambling aspect of it is actually crucial to producing an efficient market that provides good information.
However, that doesn't mean you should have tons of unregulated, legal gambling just to obtain information. The harms can outweigh it.
The stock market is not gambling tho. There's an asset. It's just been treated that way, by creating credit options and derivatives.
This is like saying buying an insurance policy is gambling.
In math class we were taught that insurance essentially is gambling—an insurance policy is a bet you hope never to win. The insurance company's expected value from the policy is higher than yours (or else they wouldn't sell it to you), but the potential losses from a disaster are greater than you can afford to replace, making the "bad bet" of insurance the safest option. (Of course, that's very different from regular gambling, which has a much more dubious social benefit.)
Of course insurance and the stock market are both gambling. (Keynes called the stock market "a casino".)
It's socially beneficial gambling, but it's still gambling.
Professor Sunstein coined "sludge" as "making something harder to do" as a contrast or even a special case of "nudge" that alters the choice architecture.
Gambling companies engage in a variety of "dark nudges" [PDF]
https://www.tandfonline.com/doi/pdf/10.1080/16066359.2018.1474206
and there are some simple sludges suggested to counter these. For example state the house edge clearly to end users.
Is there a dollars and cents cost to society for gambling addicts that outweighs the tax receipts and entertainment value for the large majority of us? Your New Jersey to Delaware comparison is maybe more apt than the Nevada/Utah juxtaposition.
I think it’s like any sort of addiction - we are all better off if our society is full of people living up to their own goals for themselves rather than with people that keep falling short because they get distracted by something momentarily appealing.
The difference as i see it is that drug and alcohol addicts cause more collateral damage to the rest of us than does gambling. Car accidents the most obvious.
Gambling addicts have families and kids who suffer if their parent is blowing money on DraftKings
"Car accidents the most obvious"
Really? I would have thought that bath-salts-induced face-eating was the most obvious.
But maybe that's just me.
The worst is when a drug addict comes into money and becomes a gambling addict too
When you say the large majority of us, I assume you mean the large majority *of gamblers*? Because if you’re talking about the large majority of society, that majority gets zero benefit from gambling and many of us find the ads, etc. obnoxious.
I think people getting addicted to anything has a public cost, as Kenny suggested, even aside from the small but rising number of people getting into real financial trouble (with downstream effects on their family, their productivity, etc.)
I was referencing the benefit of heavy taxes on legalized gambling.
I think it remains to be seen that that benefit is very pronounced, though? Atlantic City didn't end up making out very well, as one example.
Yeah if we’re gonna get paternalistic we should go for broke and ban all ads too
Where the US finds itself now, is where we were in Australia 10 years ago, and let me tell you its going to get a lot worse. Mobile betting is super easy, and it is everywhere! What you call prop bets are called multis and they are very popular. So many providers trying to separate themselves from other, offering more and more persuasive offers, that are obviously very enticing.
Government regulation and involvement exists but does not appear to be very successful to date.
Taxes are collected on turnover, so some governments are conflicted. Too much is left to self-regulation and anti-gambling organisations,
This article is important reading: https://www.theguardian.com/australia-news/2023/oct/03/a-massive-public-health-problem-australian-children-as-young-as-10-are-hooked-on-gambling#:~:text=Australians%20lose%20about%20%2425bn,capita%20losses%20in%20the%20world.
All the best
My next company will design apps for brick and mortar gambling spots.
I'm usually down for Pigouvian taxes, but I'm not sure this is the best case because the whole hazard with gambling is losing your money, and this basically guarantees it. I'd be more open to an annual limit of losses. I like the idea of only having it available at brick and mortar casinos or sports bars, and then maybe like a $1,000 loss limit or 2% of your income per year, whichever is greater. Something like that.
I like sports betting and poker. If I have vices, those are them. Then again, I'm pretty good at both, so I'm up on net across my whole life of betting, which is probably different than most addicts...