Just Bet on It: Why the Sports Betting Industry Needs to Address Gambling Addictions
Photo Source: David G. Steadman, Casino Dice, Flickr (Feb. 23, 2013), (No Copyright).
By: Taylor Henderson* Posted: 04/07/2022
At the end of January, DraftKings Inc., a sports betting company, agreed to settle with plaintiffs “who alleged the company violated their states’ gambling statutes.”[1] The settlement required the sports betting company to create a procedure “to allow family members of players who lost money in a DraftKings daily fantasy sports to put a limit on the players’ use of the site.”[2] Additionally, the organization agreed to donate money towards “national responsible gaming organizations.”[3] This recent settlement suggests that future sports betting settlements will likely include such provisions.[4]
Background
In 2018, “[t]he Supreme Court struck down [a statute] . . . that effectively banned commercial sports betting in most states.”[5] This decision allowed states to legalize sports betting, which led to the growth of sports betting companies such as DraftKings.[6] Previously, those who participated in betting were forced to use illegal methods to make bets.[7] Supporters of legalized gambling argued that the change in the law would result in an increase in revenue.[8] Now, at least thirty states have legalized sports gambling.[9]
Unfortunately, the largest downside to all the economic benefits derived from sports betting is gambling addiction.[10] Approximately “2% percent of Americans, roughly 6.6 million people, struggle with gambling addiction.”[11] Some of the effects of gambling addiction include depression, higher rates of suicide, and interest in a range of criminal activities.[12] Experts such as Keith Whyte, executive director of the National Council on Compulsive Gambling, suggest that online gambling is a “ticking time bomb.”[13]
The legalization of online and mobile betting platforms may further increase the number of people experiencing gambling addiction.[14] The Executive Director of the Louisiana Association of Compulsive Gambling stated “there are going to be probably higher numbers of people who have problems in the months ahead and certainly in probably two years.”[15] The director suggested that COVID-19 has led to an increase in gambling because people have “lean[ed] towards alcohol use and gambling venues” as a way to cope during the pandemic.[16]
As more people engage in sports betting, the dangers of gambling continue to increase as well.[17] Some states have created statutes to protect their constituents and to develop guidelines to shape their new gambling industries.[18] In Pennsylvania, for example, the Commonwealth’s legislature created a provision in the state’s gambling statute to address compulsive gambling programs.[19] The Commonwealth designated a state agency to address compulsive gambling and created a treatment fund.[20] Its funding comes from the revenue generated from gambling.[21]
How to Address This Problem
While states have passed laws attempting to address the issue of gambling addiction, the federal government has yet to pass legislation providing more guidance.[22] However, at least one member of Congress has attempted to tackle the issue. In 2018, Senator Elizabeth Warren sponsored the Gambling Addiction Prevent (GAP) Act of 2018 to help individuals in the military who have a gambling disorder.[23] The proposal states that the “prevalence of gambling disorder in the military is a serious health and financial issue, and also poses a national security concern, harming individual readiness and human performance and increasing affected servicemembers’ susceptibility to blackmail and other malign influence.”[24]
The GAP Act of 2018 authorizes the Department of Defense to screen members for gambling disorders and to promulgate policies for treating such disorders.[25] While this bill addresses only individuals in the military, it would be beneficial to have a similar act supporting treatment for non-military members as well.[26] Overall, creating a federal policy will help the thousands of individuals across the nation who are suffering from gambling addiction.
*Staff Writer, Jeffrey S. Moorad Sports Law Journal, J.D. Candidate, May 2023, Villanova University Charles Widger School of Law
[1] See Peter Hayes, DraftKings Files Settlement with Gamblers’ Family Members, Bloomberg Law (Jan. 20, 2022, 4:20 PM), https://news.bloombergtax.com/class-action/draftkings-files-settlement-with-gamblers-family-members (agreeing to settle claims brought in In re Daily Fantasy Sports Litigation, MDL No.16-2677-GAO , 2019 U.S. Dist. LEXIS 206689 (D. Mass. 2019)).
[2] See id. (explaining one condition of settlement).
[3] See id. (“DraftKings will also make charitable donations of $325,000 for support, research, training, education, or membership to ‘national responsible gaming organizations.’”).
[4] See id. (suggesting plaintiffs who sue sports betting companies for violating statutes will demand assistance for gambling addiction).
[5] See Adam Liptak & Kevin Draper, Supreme Court Ruling Favors Sports Betting, N.Y. Times (May 14, 2018), https://www.nytimes.com/2018/05/14/us/politics/supreme-court-sports-betting-new-jersey.html (explaining Supreme Court struck down 1992 federal statute that seriously restricted sports betting across all jurisdictions).
[6] See Shawn Baldwin, The Push to Legalize Sports Betting Fuels DraftKings’ Rise, CNBC (Dec. 8, 2021), https://www.cnbc.com/2021/12/08/sports-betting-and-the-rise-of-draftkings.html (showing increase in number of sports betting company).
[7] See Liptak, supra note 5 (“Bettors will no longer be forced into the black market to use offshore wagering operations or illicit bookies.”).
[8] See Will Yakowicz, U.S. Gambling Revenue to Break $44 Billion Record in 2021, Forbes (Aug. 10, 2021), https://www.forbes.com/sites/willyakowicz/2021/08/10/us-gambling-revenue-to--break-44-billion-record-in-2021/?sh=2ecba52d677b (“In 2019, gambling revenue hit a record of $43.6 billion but as the industry rolls towards a faster recovery than previously expected, 2021 is on track to surpass $44 billion in gambling revenue and become the highest-grossing year in the history of legal gambling.”).
[9] See Baldwin, supra note 6 (“Since a 2018 Supreme Court ruling, sports betting is now legal in more than 30 states.”).
[10] See Kurt Streeter, The Rising Human Cost of Sports Betting, N.Y. Times (Jan. 31, 2022), https://www.nytimes.com/2022/01/31/sports/football/super-bowl-sports-betting.html (describing gambling addiction as serious problem for individuals).
[11] See id. (quoting executive director of National Council on Problem Gambling speaking about dangers of online gambling).
[12] See Effects of Problem Gambling, Council on Compulsive Gambling of Pa., Inc., https://www.pacouncil.com/problem-gambling/effects-of-problem-gambling/ (last visited Feb. 2, 2022) (explaining types of problems that occur when people are addicted to gambling).
[13] See Rich Schapiro, Sports Betting Skyrocketed in Pandemic. Experts Warn of a ‘Ticking Time Bomb,’ NBC News (May 15, 2021), https://www.nbcnews.com/news/us-news/sports-betting-skyrocketed-pandemic-experts-warn-ticking-time-bomb-n1266518 (explaining “[Operators] have very little obligation to be transparent about how they make these decisions, which in some cases involve millions of dollars and life-threatening situations.”).
[14] See Amanda Roberts, Gambling Addiction Concerns Grow As Mobile Sports Betting Launches in Louisiana, Fox 8 Local First (Jan. 28, 2022, 10:36 PM), https://www.fox8live.com/2022/01/29/gambling-addiction-concerns-grow-mobile-sports-betting-launches-louisiana/ (“One of the pros of mobile betting, the convenience and accessibility is also what could lead to gambling addictions.”).
[15] See id. (“We have seen that during the pandemic more people have been looking and leaning towards alcohol use and gambling venues and ways to gamble and certainly online was one of them.”).
[16] See id. (explaining increase in alcohol use, gambling during pandemic).
[17] See Marie Fazio, It’s Easy (and Legal) to Bet on Sports. Do Young Adults Know the Risks?, N.Y. Times (Apr. 1, 2021), https://www.nytimes.com/2021/04/01/sports/sports-betting-addiction.html (“It’s created this new form of entertainment that society has approved, but that form of entertainment does have a potential for addiction.”).
[18] See Responsible Gaming Regulations & Statutes, Am. Gaming Ass’n, Sept. 2019, at 3, available at: http://www.americangaming.org/wp-content/uploads/2019/09/AGA-Responsible-Gaming-Regs-Book_FINAL.pdf (detailing state’s responsible gaming regulations that include information on treatment, research funding, or restrictions on players),
[19] See 4 Pa. Cons. Stat. Ann. § 1509 (LexisNexis 2022) (stating Commonwealth’s compulsive gambling program).
[20] See id. § 1509(b) (“All moneys in the fund shall be administered by the Department of Drug and Alcohol Programs or successor agency and expended solely for programs for the prevention and treatment of gambling addiction and other emotional and behavioral problems associated with or related to gambling addiction and for the administration of the compulsive and problem gambling program, provided that the Department of Drug and Alcohol Programs or successor agency shall annually distribute at least 50% of the money in the fund to single county authorities under subsection (d).”).
[21]See id. (“The fund shall consist of money annually allocated to it from the annual payment established under section 1408(a) (relating to transfers from State Gaming Fund), money which may be allocated by the board, interest earnings on moneys in the fund and any other contributions, payments or deposits which may be made to the fund.”).
[22] See Advocacy, Nat’l Council on Problem Gambling, https://www.ncpgambling.org/programs-resources/advocacy/ (last visited Feb. 2, 2022) (advocating for change in state policies, federal policies to help individuals suffering from gambling addictions).
[23]See Elizabeth Warren & Steve Daines, The Gambling Addiction Prevention Act 1 (Report on GAP), available at: https://www.warren.senate.gov/imo/media/doc/The%20Gambling%20Addiction%20Prevention%20(GAP)%20Act%20-%20One-Pager1.pdf
(detailing initiative to address gambling disorder in military).
[24] Id. (listing reasons why federal government needs to address gambling disorders).
[25] See id. (“On military sites where gambling activities take place, such policies and programs would include provision of educational materials and promotion of responsible behavior.”).
[26] See Advocacy, supra note 22 (“There is no Federal agency tasked to address problem gambling – not the Substance Abuse and Mental Health Services Administration (SAMHSA), not the National Institutes of Health, not the National Institute of Mental Health, not the National Institute on Drug Abuse nor the National Institute on Alcohol Abuse and Addiction.”).
