Manhattan Institute

A Bettor World Beckons

The expansion of sports gambling in the U.K. has precipitated a social crisis—and America could be next.

The 2018 National Football League season is the first since the Supreme Court ruled last May that states can no longer ban sports betting. Though placing legal bets on NFL games isn’t easily done yet, it likely will be soon. State-sanctioned betting is underway in four states, four more have okayed it and are deciding how to license and regulate operators, and dozens of others are contemplating legalization, which some legislators hope would boost tax collections. These states would all join Nevada, which enjoys a long-standing federal exemption that lets its casinos take bets on sports events. Even the NFL, which for years said that it opposed legalized sports gambling, is getting in on the action: the league recently decided that teams can accept marketing deals and partnerships with gambling operations.

Yet as the U.S. races toward legal sports gambling, it’s worth paying attention to how it has worked out in the United Kingdom, where sports betting dates to the Betting and Gaming Act of 1960, a law written to stem the growth of illegal gambling by authorizing state-licensed betting shops. Initially inconspicuous, the shops had to darken their windows and couldn’t provide customers with amenities. But over the years, the British government liberalized gaming laws, allowing more and different types of bets, including progressively more complex betting on England’s most popular sport, soccer. A turning point came with the Gambling Act of 2005, in which Tony Blair’s government permitted the creation of larger casinos throughout the country, and set rules to govern so-called “remote” or online betting. The most significant change wrought by the law turned out to be allowing bookmakers and online betting sites to ramp up advertising on TV. Many legal bookmakers began marketing their services through popular sports teams themselves (just as the NFL will now let teams do). Those deals, however, produced widespread exposure of children and teens to betting and “normalized”—as the U.K.’s betting regulators describe it—the idea of sports betting among the young. And in the last ten years, British sports-betting firms have expanded their operations significantly online, making wagering on sports even easier.

The results: a rise in the numbers of problem gamblers, especially among young people. The 2010 British Gambling Prevalence Survey found a major increase in the number of problem gamblers in England over a space of just three years, from 200,000 in 2007 to 450,000 by 2010. That survey also estimated that 2.7 million other British residents displayed some of the risk factors associated with problem gambling. Part of the upsurge seemed attributable to the increasing availability of online betting. GamCare, the national organization for people with betting problems, reported in 2013 that 34 percent of those requesting help for problem gambling principally bet online—second only to local betting shops, where 46 percent of problem gamblers said that they did most of their “punting,” as the British call it.

Easy access and constant advertising have lured teens and children into the marketplace. An investigation this month by a British TV show found that 15 of the country’s soccer clubs advertised gambling on their website pages targeted to children and families, including some ads tailored specifically to kids. The report came in the wake of a study by a problem-gambling organization that found that 30 percent of children it surveyed had gambling apps on their smart phones. Britain’s gambling commission estimates that between 11,000 and 16,000 underage kids are problem gamblers, and 36,000 more are at risk.

Critics worry that legal sports gambling has become such an integral part of everyday life in England that it’s too late for reform. “It is crystal clear how gambling has become both the warp and weft of the finance of football at all levels,” John Nicholson, a columnist for the highly influential Football 365 website, wrote earlier this month. “It has made football dependent on its money and it has made football media, including us, dependent on its money too.”

The NFL’s move to capitalize on the rise of legal sports betting, sure to be followed by other sports leagues, threatens to send the U.S. down a similar path. Already, we’ve gotten a glimpse: in the fall of 2015, fantasy sports leagues flush with cash from investors, including prominent broadcasters, began marketing their games aggressively, thanks to a federal loophole that didn’t classify the games as gambling. That produced a sharp uptick in players until states began clamping down on the games. Even so, addiction services in the United States reported a rise in problem gamblers, who said that they’d begun with fantasy sports—especially younger players. Research has already demonstrated that fantasy is a gateway to other sports betting and a road to addiction for young gamblers.

Advocates for legal sports betting, including state legislators anxious to tax its proceeds, claim that people bet on games anyway in the shadow market, so why not bring it out in the open, where it can be regulated? The problem is that legalizing betting brings with it a vast increase in marketing, promotional activity, and sophisticated games that most illegal operations couldn’t easily offer. Stepping up marketing and promotion through everyday media channels—and in alliance with sports teams—greatly expands gambling’s reach and serves as a gateway for young people into betting. The British experience is instructive, but for now, anyway, America doesn’t seem interested in absorbing these lessons.

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