High Stakes: The Gamble Behind Legal Betting

Since the U.S. Supreme Court allowed states to legalize sports betting, 37 states and the District of Columbia have created regulated sportsbooks. From a financial standpoint, the results have been striking: since 2018, over half a trillion dollars have been legally wagered on sports in the U.S.

But is this surge in legal sports betting good for society?

In the latest episode, Prof. Mark Conrad - known as Prof. C - explores this question. Drawing on his 2024 article in the Harvard Journal of Sports and Entertainment Law, he discusses the potential harms of widespread gambling and outlines his proposals to limit advertising and promotional tactics.

Read the full article: Harvard Journal of Sports and Entertainment Law (2024) Listen now to the latest episode of the Sports Business Podcast with Prof. C.

Host: Mark Conrad Producer: Victoria Ilano Additional Production: Jeffrey Haynes Artwork: Pamela V. White Marketing: Michelle Miller Music: ”MarcusWay/Energetic Pop Punk/Tribe of Noise”

Episode Transcript

(00:07):
Hello and
welcome to the Sports Business Podcastwith Prof.
C, the podcast that exploresthe world of professional,
collegiate, amateur, and Olympic sports.
I’m Mark Conrad, or Prof.
C, from Fordham University’sGabelli School of Business,

(00:27):
whereI serve as Professor of Law and Ethics
and the Director of the SportsBusiness Initiative.
Seven years ago, the U.S.
Supreme Courtopened the door to legalize sports
betting by allowing states to enact lawspermitting this practice.
Since then, 37 states

(00:50):
and the District of Columbiahave legalized sports books.
Advocates argued that legalizing sportsbetting was a better way
to regulate the practice,than keeping it illegal.
The argument notedthat betters will bet illegally anyway,
especially during the Super Bowland March Madness, with no controls,

(01:13):
so states creatinga legal structure was a better approach.
Not to mention that legalized sportsbetting gave states
the opportunity to earn revenuesfrom the licensing of betting companies
and from taxes on both those companiesand successful betters.
Indeed it has worked – too well.

(01:35):
Since 2018,the amount wagered legally on sports
in the United Statessurpassed half a trillion dollars.
With two-thirds of the stateslegalizing sports betting,
it is a safe bet – no pun intended –
that these handles will increase,and increase at a faster rate,

(01:56):
as most states dip into the sportsbetting universe.
This is not an idle statementbecause the nation’s two most populous
states – California and Texas – have not
legalized sports betting yet.
New York is the largest statewith legalized sports books,
and it is not only the highestbetting handle with an average of $2

(02:18):
billion a month, but it has increasedby double digits over the last year.
The same is the case in key states
such as Pennsylvania, Illinois,Colorado, and Michigan.
But the giddiness that the statesand the sports industry –
which traditionally was against gamblingbecause of the possibility of fixing games

(02:39):
– have taken to gambling by monetizing
the opportunitiesfor sponsorship and data.
But after seven years,there are storm clouds
on the horizon that merit concern.
First, reports of problembetting have increased.
Second, the preferred method of betting –through mobile devices – has made

(03:00):
the practice far easier than the days ofgoing to a racetrack or casino, or, dare
I say, illegal betting hubstucked away in townhouses.
It is no coincidence that a recent survey
by the Siena College Research Instituteand St.
Bonaventure University’sSchool of Journalism reported that one
out of five American adults have an onlinebetting account.

(03:25):
The gambling industryhas heavily encouraged more betting.
A recent lawsuit highlightssome of the tactics that betting companies
have used to corral betters,even those who have addiction issues.
A self-described problemgambler named Sam Antar, filed a lawsuit
against several New Jerseycasinos and BetMGM,

(03:47):
an online serviceclaiming violations of a New Jersey
Consumer Fraud statute,as well as traditional negligence.
He argued that he was enticed to gamble
through dozens of bonuses,credits, deposit matches,
and incentives by betting companies –despite their knowing
or suspendingthat he is a compulsive gambler.

(04:11):
All told, he claimed he lost $24million in gambling, aided
and abetted by the casinos and BetMGM.
His complaint statedhe received more than 1800 text messages
over a seven-month periodby the defendants.
A federal trial courtand a three-judge federal

(04:32):
appeals court dismissed his claims as Mr.
Antar could not prove that a duty of care
existed between the gambling entitiesand him.
Duty of care is a core requirementin negligence law
which translates into demonstratingthat a direct legal obligation
exists between the defendantto the plaintiff to ensure

(04:54):
that the defendant’s actionswere made in a reasonable manner.
Both the trial and appealscourts were likely correct
in their conclusion on the legalities,and Mr.
Antar has to take responsibilityfor his actions.
It is astounding to lose $24million in betting,
but if these firms were bombardingthe better with hundreds of messages

(05:16):
enticing him to bet,that is also very troubling.
It makes gamblingmore than a harmless vice because it is
using the marketing power of the industryto get people to the casinos
or to their phonesto bet – betting from monies
that could come from their wagesor bank or brokerage accounts.

(05:37):
It could also force bettors to get loansfrom family members or others.
It may well be time to reevaluate
America’s experiment with legalized sportsbetting.
States or maybe the Federal government
should adopt tighter restrictionson advertising and promotions.
While advertising is protectedby the First Amendment,

(05:59):
the range of protection is not as broadas with other kinds of speech.
Legislation has been introducedthat would limit advertising
in the broadcast media,but no action has been taken by Congress.
It won’t be an easy task to curbbetting promotions
as powerful interests– including state governments

(06:20):
involved in the sportsbetting space – could object.
But with the potential for more problemgambling, some limitations are needed.
I discuss advertising and sponsorship
restrictions in more detailin an article published last year
in the HarvardJournal of Sports and Entertainment Law,
which is listed in the writtensummary of this podcast.

(06:43):
If you wish, however, you can find itat the website of the Harvard
Journal of Sports and Entertainment Lawby searching that title online.
For the Sports Business Podcastat Fordham’s Gabelli School of Business.
I’m Mark Conrad,or Prof. C, have a great day!