Stories by Benjamin Regan
Print Managing Editor
Illustration by Nathan Friezer
Staff Illustrator
Inside the rise of sports gambling
The potential for widespread legal sports gambling in America arrived in May of 2018 when the Supreme Court voted down the Professional and Amateur Sports Protection Act (PASPA). Since then, the tremendous ascent of the industry has traveled from one state to the next, achieving legality in all but 11 states, of one which is California. Online sports gambling has become so mainstream so quickly because bets are no longer placed under the table or require a trip to Las Vegas, but instead are conveniently entered on an app.
People can pick a team to win any given game, but are not limited to these broad bets. Sportsbooks offer prop bets, or bets placed on individual players to go over or under a specific number. For example, the line for Patrick Mahomes’ passing yards in the AFC Championship Game opened at 254.5 on DraftKings, and bettors chose whether the Chiefs’ quarterback would throw for more or fewer yards. Some also bet on entirely random details, such as the color of the gatorade poured on the Super Bowl’s winning coach, or gamble on obscure sports they have no interest in. Online sports gambling enables bettors to make these decisions very easily.
“Online sports betting is available 24 hours a day, 7 days a week and can be accessed via computers or smartphones, which eliminates the need for physical betting locations,” Rachel Volberg, Research Professor for University of Massachusetts Amherst’s School of Public Health and Health Sciences said.
Sports gambling’s path to popularity has also been aided by extensive advertising. A study conducted by the University of Bristol counted 799 gambling references during a single NBA game between the broadcast, official social media pages, and brand logo appearances. Fans cannot go a single game without seeing sports betting ads, and leagues are fine with it. To them, the sports gambling surge means more interest in and eyes on their sport. Intentionally shot into the vein of American entertainment, the sports gambling industry has consumers fixated.
There is no question that the industry is growing rapidly, with this year’s March Madness projected to set sports gambling records. It is now part of how Americans consume sports, and because of the frequent advertisements, it is normalized. But as only a brief period of time has passed since the Supreme Court decision that jump-started the industry, there has not been a moment to consider how sports gambling will change sports forever.
DraftKings and FanDuel are the two leading sportsbooks, and their growth feels similar to the rise of Facebook. From 2005 to 2008, Facebook went from the brainchild of college student Mark Zuckerberg to a widespread, accepted part of life in America, capturing 100 million users. Facebook has undoubtedly revolutionized communication, but alongside this, people have changed their beliefs about privacy and their tolerance for its violations. It was not until 2018 when Zuckerbeg addressed these concerns in court, and by then, Facebook and other social media sites had a firm foot in the door.
Sports gambling is the new and exciting obsession that Facebook once was, and similar to how FaceBook changed privacy, sports betting threatens to taint sports as they once stood. When bettors wager on players and their individual performances, the team effort to win becomes secondary for fans. They put less importance on the game and implore, with money on the line, that their players come through. The enjoyment from watching a good game is replaced by a narrow focus on stat lines that could earn or lose money.
“I find myself oftentimes rooting against my interests as a fan, and I’m a huge Chicago Bears fan, which doesn’t mean I’m necessarily betting on the Bears on a regular basis. In fact, that’s a pretty bad idea,” Chad Millman, Chief Content Creator for The Action Network and co-host of the number one sports betting podcast in America said. “In betting terms, when you’re betting against your rooting interest, it’s called an emotional hedge.”
After losses, bettors often blame players that did not produce the desired statline. Larry Nance Jr. is an NBA player for the Atlanta Hawks, and he spoke on Michael Lewis’ Against the Rules Podcast about the anger that bettors have toward athletes. Players have long been criticized by fans for poor performances, but sports gambling adds another layer of disapproval, and money has proved to be a cruel motivator in the player/fan relationship. Fans become so blinded by their bets that they fault the players when one fails, but players do not owe bettors anything. This has led to death threats sent after games, something Nance has experienced in his career. Sports gambling is not just hurting the integrity of the game, it is putting players under attack.
Another concern is that players are reduced to poker chips. Bettors are not interested in the players’ past or their journey to the league and do not appreciate their skills. They only care about a player’s performance in one part of one game. It is almost dehumanizing, treating players like stat-generators instead of people.
Sportsbooks and the whole sports gambling industry relies on risk. The house incentivizes big swings with against-all-odds parlays, encouraging bettors to make two or more bets and combine them into one wager. This strategy of gambling has the possibility of a big payout, but it is unforgiving and statistically disadvantageous. For example, if a bettor places a ten-leg parlay but only nine of the bets are successful, the parlay fails entirely and the bettor loses.
“There’s no advantage to doing [a parlay]. It’s entirely a sucker’s bet,” Millman said. “It’s super hard to win a parlay bet. [Bettors] look at these things and say to [themselves], ‘this could happen; it’s $10 and I might win $100.’ The book makers, the operators, love it, because more and more people are betting [parlays]. And you’re not going to win them, so bookmakers make a ton of money on them, and bettors think that they’re going to make a ton of money, and they never do.”
Some sports gambling forums prevent bettors from making two independent bets; they are forced to cojoin them in a parlay and become less likely to win money. In Ohio, sportsbooks will automatically combine three consecutively placed bets into a parlay, sometimes without the bettor’s knowledge. Instead of winning money for partial success, the bettor wins nothing, even if they intended to make separate wagers.
DraftKings and FanDuel are private sportsbooks and run their own operations. The phrase “the house always wins” alludes to Vegas’ infamous tricks to cheat the bettor out of money, but some think that sports gambling is different, or somehow fairer. Instead, sports gambling companies have complete control. They gather data on each bettor that they can use to their advantage. Similar to YouTube’s algorithm that has been shown to push radical political content, sportsbooks push bettors toward increasingly risky bets. DraftKings and FanDuel, along with other sportsbooks, also ban or limit the biggest winners from betting on their sites. In that way, the house always wins.
Both companies even award VIP status to their more prominent bettors. To become a VIP, one must bet consistently, bet a lot of money, and do so with unlikely, high-risk high-reward bets. They also must lose. The VIP classification includes seats to sporting events and concerts, free food and drink, a chance to meet athletes, and a personal betting ambassador from the sportsbook. This system is like an alcohol brand giving part ownership stake in their company to its biggest drinkers: It preys on their addiction and also hides it behind glamour, making the lifestyle nearly impossible to leave.
It is backwards how sportsbooks use their algorithm to ban top bettors, but use the same algorithm to glorify their worst addicts. Sportsbooks know which bettors are in the most debt, but instead of connecting them with a gambling hotline, they promote them to VIP status, knowing they are extremely likely to lose more money. This setup is nothing short of predatory.
Is it possible to win?
Before the broken records and a World Series title, Shohei Ohtani’s first season with the Los Angeles Dodgers started with scandal. It was strangely unsettling as Ohtani played in the Dodgers’ opening series of the season with rumors, some true and others false, having surfaced about his interpreter and longtime friend, Ippei Mizuhara. Ohtani emerged from the messy allegations as the victim; his interpreter stole $17 million through withdrawals from Ohtani’s bank account that he, without Ohtani’s knowledge, stole from his employer to pay back gambling debts.
In only two years, Mizuhara lost more than $40 million in sports gambling. Despite his losses, Mizuhara began increasing his wagers each week, starting with $15,000 and ultimately placing more than half a million dollars per bet by 2023. When his illegal methods and bookmakers were revealed, Mizuhara was fired as Ohtani’s translator. He now faces four years and nine months in prison.
Mizuhara abused what has become a very popular pastime in America: sports gambling. The overlap between sports gambling and traditional, slot-machine gambling is significant. The difference is in the accessibility, online sports betting gives gamblers a casino in their pockets, and in variety, bets can be placed on any part of any game.
“Sports betting operators are no longer limited to under-over bets (who will win a particular game) and can offer odds on every aspect of an event. The result is that sports betting is now more like playing a slot machine in terms of speed of play, a structural characteristic that is associated with more risky forms of gambling,” Volberg said.
While sports gambling is similar to its predecessor in Las Vegas, a better comparison might be made with the stock market. Betting on sports and investing in the stock market share an inherent component of unpredictability and therefore risk, and if not managed carefully and intentionally, can cause crushing debt. They are not identical, in part because the stock market is a long-term investment whereas sports bets can be placed frequently and their result is known almost immediately, but there is some similarity in terms of strategy.
Expertise on a topic, about companies for the stock market and teams for sports gambling, could potentially make someone more likely to profit. Understanding trends about players and teams can help inform sports gamblers before they place a bet. There is no flawless formula to being a profitable sports gambler, and nothing is guaranteed or a “lock” in the betting world, but using patterns is a better method than randomly picking overs and unders.
“You want to spend the time to understand how to put together the puzzle,” Millman said. “[Good bettors] recognize that there are opportunities in the market where they can find value because games and point spreads don’t get priced right. It’s like buying stock. If you research a company and you feel like the value of this company is x, and it only costs me y, I’m going to buy it. A lot of people look at sports in the same way, and they also look at it as being somewhat more transparent than the stock market, because you’ve got to list injuries and all the publicly available data.”
It is possible to make money from sports gambling, but its unlikeliness should not be underestimated. Sports are wildly unpredictable and anything can happen in a game. The surprisingly lopsided Super Bowl is a strong example of this. Bookmakers also take advantage of every edge and exploit bettors’ lack of understanding about risk, something that humans are poor at assessing. Marie Helweg-Larsen, Professor of Psychology at Dickinson College, told The New York Times that it is a “well-established finding in social psychology, which is that people think that their own risk is less than that of other people’s risk.”
Having the right information at one’s disposal, which theoretically is the tool to successful sports gambling, does not mean one will make money. Trends and tendencies can be helpful advisors, but even Millman, an expert giving gambling advice on the Action Network almost daily, acknowledges the challenges of sports betting. In short, winning is possible, but doubtful.
“The more educated you are, the more opportunities you have to understand what you’re going to be putting your money into, but that doesn’t mean you’re going to win. And I’d emphasize the most successful bettors are winning 53/54/55 percent of the time. 45 percent of the time they’re losing. It’s very, very hard to do it and do it successfully, which is why people really shouldn’t be thinking ‘I’m gonna go big in something.’ By the way, I would emphasize, nobody in high school should be betting at all,” Millman said.
Sports fans already watch the games, and tacking on bets to the experience seems fun. Many bettors have followed sports their entire life and feel like they know the game well enough to make solid predictions on their upcoming performances. It is a promising idea, using sports knowledge to make money, but it’s both difficult and dangerous.
I asked Volberg if a good understanding of sports can make someone a good bettor, and she simply answered “no.”
One study estimated that only 3 percent of sports gamblers are profitable long-term, and the consequences of gambling addiction are severe. Like all addictions, it changes the bettor’s brain chemistry by disrupting dopamine receptors. Some findings suggest rewards processing and stress management become particularly damaged by sports gambling.
“It is true that the brain physiology of people experiencing gambling problems is similar to the brain physiology of people experiencing other addictions,” Volberg said. “This…appears to be related to the dopamine system which controls motivation and emotions.”
Gambling addiction can derail families and put financial stability in ruin for many addicts. A study led by researcher and professor Breck Hollenback from UCLA’s Anderson School of Management found that, “Within four years of a state legalizing online sports betting, credit scores decreased by an average of 1%, debt collection amounts jumped by 8%, and bankruptcy filings soared by 28%— representing roughly 30,000 additional bankruptcies per year.”
Young men are most at risk for developing gambling issues, and by just watching games they will see gambling commercials well before they can legally bet. There is also an increased likelihood of gambling addiction in individuals with poor credit, although the addiction impacts a wide demographic of people, including the wealthy.
“In my opinion, young men are particularly likely to engage in sports gambling due to social and cultural factors,” Volberg said. “However, sports betting operators are attempting to ‘grow the market’ by appealing to other groups in the population, notably women and older adults. There is also some recent research showing that individuals with lower education and income are increasingly betting on sports with serious impacts on their household financial health.”
The illusion of “striking it rich” in sports gambling remains strong, and it is closer to a myth than a possibility for the millions of Americans placing sports bets online. It is very challenging to make money and the low-risk, research-supported strategy that Millman suggests is not employed by bettors nearly enough. Instead, gamblers with a misguided understanding of risk and a failure to recognize the unpredictability of sports are suffering from both addiction and debt.
The long path to legalization
Bill Bradley is best known for his career in politics, but before he served as New Jersey’s senator and tried his hand in the 2000 presidential election, he was a star basketball player at Princeton University. One of his fundamental beliefs as a player was that gambling did not belong in sports.
When he reached office, Bradley set out to separate sports and gambling in the law. In 1992, he proposed the Professional and Amateur Sports Protection Act (PASPA), which did not explicitly ban sports gambling in America but prevented states that did not have legal sports gambling from legalizing it. The act was passed by Congress and stood largely unquestioned for two decades, and while only Nevada and a few other states with sports lotteries were protected, it seemed as though sports gambling would be isolated to their borders.
However, in 2009, five friends in Scotland recognized the rise of fantasy baseball and wanted to capitalize on it. Instead of a long, drawn-out game over a full season, they wanted a more immediate payout. FanDuel was born in Edinburgh as a daily fantasy sports game, and it was pay-to-play, which blurred the line between fantasy sports and sports gambling.
Both FanDuel and DraftKings, a rival company born in 2012, gained interest during the early 2010s. The companies operated for some years without certainty about how exactly they were different from a sportsbook. While their legality remained unclear, it was obvious that the idea of sports betting was gaining traction in America. Referendums in New Jersey, Bradley’s state, showed that two-thirds of people disagreed with his law.
The effort to overturn PASPA picked up momentum. In 2012, the New Jersey Legislature enacted the Sports Wagering Act, which allowed gambling on certain sports at New Jersey casinos and racetracks. The state argued that PASPA was unconstitutional, and that debate reached the Supreme Court in 2018.
In Murphy v. National Collegiate Athletic Association, the Supreme Court gave states the right to legalize sports gambling and introduce their own specifications by a 6-3 vote. Rather than trying to legalize sports gambling nationally, sportsbook lobbyists began targeting states without organized opposition. In Kansas, lobbyists found a legal loophole and offered millions of dollars in free bets, without tax. Kansas was the first state to legalize sports gambling, and 38 states have followed since.
California has remained firmly against sports betting, not legalizing it largely due to objections from tribal casinos.