What’s behind America’s sports betting boom? – Marketplace

Gambling is growing like crazy in the U.S. There’s more election betting, online casinos, traditional physical casinos and, of course, sports betting, which has been getting a lot of the headlines.

By the end of this year, Americans are projected to have bet $150 billion on sports; that’s up from about $7 billion in 2018. Some 40% of Americans say they bet on sports.

Alice Fulwood is the Wall Street correspondent for The Economist, which has a new report on sports betting. She spoke with “Marketplace Morning Report” host Sabri Ben-Achour. The following is an edited transcript of their conversation.

Sabri Ben-Achour: Some of this — if we look specifically at sports gambling — comes from a 2018 Supreme Court decision that allowed states to legalize sports betting. But why do you think we are gambling more? Is it just because we can legally?

Alice Fulwood: Obviously none of this could be happening, in sports betting in particular, if that court decision hadn’t been handed down. But at the same time, a couple of other things are happening as well. One is that states have moved very quickly to put in place legislation to make sports betting and other kinds of betting legal. And this is driven by maybe by the fact that people seem to like sports betting when you poll them. They’re also sort of looking to raise revenues. So especially during COVID, when states’ revenue, tax revenue seemed in peril, you saw a lot of states sort of moving toward legalizing sports gaming, because they wanted to tax and gain from the business.

But the other big driver is technology, and this kind of helps the legalization argument. Because if you can go online, use a VPN, and sports gamble whether or not the state makes it legal, then the benefit for the state has diminished. But also it tends to be a bigger business [if it’s legalized], and so there is more tax revenue to potentially go after.

Ben-Achour: Of course, people averse to gambling will point out the potential for addiction, the potential to make very ruinous decisions. Now that we have a ton more people betting, are we actually seeing more problems?

Fulwood: There definitely is evidence of harm. You know, I don’t want to mince my words on that. Things like, people in states where they have legalized sports gambling tend to be saving less. Increases in credit card debt. My perception is that the magnitude of some of those things is sort of relatively small — in the sort of few hundreds of dollars, not thousands of dollars. There was one paper that found a correlation between the legalization of sports betting and a rise in domestic violence. So obviously, you know, there are problems with legalizing this. The question is, I guess, how great are those harms? Do they override people’s right to do what they want with their money? And how do they compare with other harms that society tolerates?

Ben-Achour: I mean, ultimately, people gamble, people make bets, because it’s fun for them. On the other hand, there’s money, right? How much money is being made, either by states or by businesses on this?

Fulwood: In total, the industry is making about $14 billion in revenue this year. But, like I said, it’s growing very quickly. It’s been legalized in 38 states, but it’s not including some of the biggest ones, like Texas, California, and it’s only sort of partially legal in Florida. And so one of the people I spoke to for my story was Peter Jackson, who’s the boss of Flutter, which is the biggest gambling company in the world. And his expectation is that by 2028, online gambling in America will be a $60 billion to $70 billion industry. So he’s expecting a quadrupling of the revenue associated with this business over the next few years.