America has gone ‘all in’ on sports betting. But at what cost?

Seven years after a landmark U.S. Supreme Court ruling allowed states to legalize sports betting, the gambling industry has flourished around the country, in what historian Jonathan D. Cohen calls a “reckless bet.” 

Problem gambling is on the rise around the country. Even in Wisconsin, one of the few states that hasn’t legalized online sports betting, a gambling helpline based in Green Bay has seen an uptick in calls and growing demand for its addiction services. 

Cohen documents the industry’s rise and its consequences in his new book, “Losing Big: America’s Reckless Bet on Sports Gambling.” The book chronicles how state legislatures and professional sports leagues quickly embraced sports betting to create a $13-billion industry, with sportsbooks (i.e., gambling venues) often crafting gambling legislation to suit their own interests. 

“It took us 30, 40 years for state lotteries to get to almost 40 states, and we’re going to hit our 39th state [with legalized sports gambling] in a matter of just seven years,” Cohen told WPR’s “Wisconsin Today.” “So it rolled out extremely quickly.”

Unlike most other states, Wisconsin only allows sports betting in-person at tribal casinos.  

“Wisconsin is unique. There are a few other upper Midwestern states in the same category that have legalized sports betting, but for whatever reason have not gone all the way — have not gone ‘all in,’ pun intended — to legalize online sports gambling,” Cohen said.

But the technologically savvy can easily find workarounds. And the culture of sports betting has taken off in Wisconsin, drawing in younger bettors “who have only gotten into the game because it’s so accessible,” Cohen said.

Cohen joined “Wisconsin Today” to talk about what he calls this “new chapter” in American gambling and why he believes the stakes have never been higher.

The following has been edited for brevity and clarity.

Rob Ferrett: Some of the organizations most opposed to legalized sports gambling were the sports organizations, like NFL and MLB. Now, anybody who watches sports sees official partner gambling agencies. How did we get this 180-degree switch?

Jonathan D. Cohen: Yeah, so we got the 180 slowly and then all at once. As long as sports gambling was illegal, the leagues could not endorse it. And they, in fact, spent many years, many decades, punching down at gambling and talking about how much they dislike gambling, how much of a threat gambling is to the integrity of their game.

But then, lo and behold, come 10:01 a.m. on May 14, 2018, they are yet another institution that is able to go all in on gambling. Because if gambling is going to be legal, then they can make money off of it — they will make money off of it — and they can use it to drive interest in their product.

RF: One of the arguments for legalization that you highlight being made over the years is, “People are gambling already. States aren’t getting a taste of that. They might have criminal retribution if they don’t pay their debts. It’s going to be safer and happier and more lucrative for everybody if it’s legal.” The idea is: These legal things are just taking all that illegal business and transferring it over. Has that been the case, or have we seen gambling expand because of this?

JDC: We have absolutely, with no doubt, seen gambling expand — meaning there are lots of people, particularly young people, who were not betting before 2018, who have only gotten into the game because it’s so accessible, because they can bet in many states on their phone using a credit card or a debit card.

It was naive of politicians and it was a little surreptitious of the companies to claim that all of this illegal money will automatically, magically appear in legal coffers without any consideration of why people actually are choosing to play on the black market. 

RF: When you think of sports betting, you think, “I’m gonna bet on the football game,” right? This team’s gonna win, or this team is going to cover the spread, or the over-under, whatever the case may be. Now you can go online and bet on the 10th match in this tennis tournament in Hong Kong at 3 o’clock in the morning.

JDC: And even more to the point, not just any sporting event in the world but also any fractional event in a sporting event. So you’re watching the Packers game, and it’s not just who’s gonna win the game, but like, will this drive end in a touchdown? Will the next play be a running play? Will the next play be a running play for more than 1.5 yards? 

The idea behind all this is to create as many opportunities for action as possible. They’re not just looking to win money — they’re looking for chances to get money down and things to bet on and ways to create excitement. 

By offering Malaysian women’s doubles badminton bets, you’re giving people in the middle of the night who have nothing else to watch, no sports on, a chance to bet on something. And then you’re also giving an incentive to bet on the Packers game but then to keep your DraftKings app open and to keep betting over the course of the game, because any single play, any single moment in the game, could be an opportunity to win money or to bet money. 

This is so beyond what was imagined in 2018 when the Supreme Court decided this issue, and it is a new frontier in American gambling. 

RF: That takes us to the most heartbreaking parts of your book, what you call an “epidemic” of problem gambling. You point out that most people who gamble won’t have an addiction, but there’s been a growth in gambling addiction since this happened. What are we seeing? 

JDC: The data on this is a little uncertain, but there’s a lot of anecdotal evidence that young people, particularly young men, are either developing full-on gambling addictions or at least engaging in what you could call hazardous or problematic or at-risk play, where they are periodically losing more money than they can afford, losing more money than they intend.

[Some are] developing this sort of episodic gambling addiction where you might not have a real, full-blown gambling addiction for the rest of your life, but you go through a weird six-month period where you come out of the rabbit hole and you’re just like, “What just happened? How did I just lose $15,000 over the course of six months?” 

We’re seeing a lot of anecdotal evidence of that from high school teachers who reach out to me, from gambling therapists, from people who run gambling hotlines — all reporting not just an increase in use of their service and an increased interest in therapy and in treatment, but particularly a new demographic that it is now: younger people, again, younger men in particular, more than before, who are taking advantage of these services and who need treatment for gambling-related harms.

RF: And one of the biggest criticisms I’ve seen of sportsbooks is the lack of effort to identify people who could be vulnerable to problem gambling because they are a really solid source of revenue for these companies. What kind of safeguards exist?

JDC: For legal sports betting, you need to prove that you’re over 18 or that you’re over 21. Some states don’t let you bet with credit cards. But the vast majority of these guardrails are optional. You have the option of setting up a deposit limit. You have the option of setting up a time limit on the app. The companies like that it’s optional, that it’s up to you, the gambler, not this billion-dollar sportsbook, to set a limit for yourself and to define what responsible play. 

That’s why advocates like myself and lawmakers have called for making some of these guardrails required. You know, if you deposit money into your account, you can’t gamble with it right away. You have to wait 24 hours or 12 hours so that you can’t start chasing all of your losses. The companies could do this themselves, and I wish they would, but it doesn’t seem like they’re going to.

RF: How does the VIP system work on online betting sites?

JDC: These companies have more data on their gamblers than any gambling operation in recorded human history. And they can figure out who is going to bet, how much they’re gonna bet and who might [keep betting] with little nudges — with someone in their ear offering them tickets to a football game, a free iPhone, you name it, to incentivize them to play more.

And you can imagine how much someone has to be losing, how much money they have to be gambling away in order for that to be a profitable enterprise for the companies. This has been a long-standing practice in the casino industry, and it’s now even worse with sports betting because you can bet from your phone — you don’t have to be at the casino to be losing money. You could be doing it any single minute of the day, betting on Malaysian women’s doubles badminton.

RF: You mentioned the need for more safeguards for problem gamblers and other changes in the industry. Assuming it’s not going to come from the industry itself, who could create those safeguards?

JDC: Per the Supreme Court decision, every state regulates its own sports gambling, and there is a state regulatory body that could say, “OK, the new law in Wisconsin, or in Kansas or wherever, is: You can only gamble this much per day. You can only log into your app this number of times” and so on. States make money from sports gambling and often are loath to pull back. 

There is a bill in Congress that would do exactly what we’ve been talking about, which is to set a floor under sports gambling, meaning, “OK, states, you can offer sports gambling, but you need to limit advertising in this way. You need to spend this much money on problem gambling. You need to ban the use of AI to develop specialized player props to try to entice players” and so on. 

So it could come from the state, it could come from Congress. I’m a little skeptical it’s ever going to come from either, but I’m hopeful.