Losing Big: America’s Reckless Bet on Sports Gambling

CHRISTIANE AMANPOUR, CHIEF INTERNATIONAL ANCHOR: Now, to a huge and potentially dangerous market in U.S. sports gambling. It’s grown massively since a 2018 Supreme Court ruling allowed states to legalize it. But at what cost to people’s lives? Author and historian Jonathan Cohen investigates this in his new book. And he tells Michel Martin just what he’s found.

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MICHEL MARTIN, CONTRIBUTOR: Thanks Christiane. Jonathan Cohen, thanks so much for joining us.

JONATHAN D. COHEN, AUTHOR, “LOSING BIG”: Thanks for having me.

MARTIN: You know, if you watch any sports on TV, any sports on TV you just see betting all over the place. I mean, you see, you know, ads for betting, you see shows kind of built around betting. You know, at one minute it seemed like gambling and sports were like oil and water, they did not mix. When did this change?

COHEN: It all changed or it started to change on May 14, 2018 when the Supreme Court decision Murphy versus NCAA unleashed the floodgates for states to legalize sports betting, and I’ll spare you the legalese, but effectively states had been banned from legalizing sports betting, and the Supreme Court overturned that federal regulation, and now states were free to regulate or legalize sports betting as they so chose.

MARTIN: Just briefly, if you would, what were the grounds? Like, what was the argument there?

COHEN: The grounds actually had basically nothing to do with sports betting in and of itself. In 1992, Congress passed a law, the Professional and Amateur Sports Protection Act, PASPA, that said, that barred states from legalizing gambling, and the Murphy versus NCAA 2018 decision focused not on gambling itself, but on this commandeering statute from the 10th Amendment. The idea that basically Congress can’t tell states what to do and that its states have a rights to legalize gambling if they so choose.

MARTIN: How big is sports betting in the United States?

COHEN: So, over the last just seven years, Americans have already bet around $500 billion on sports betting. And the estimations are that as many as 20 to 40 percent of American adults have placed at least one bet on sports. And all of this before the States of California, Texas, and Georgia legalized sports betting. So, when those states and other states like them get in the game, it’s going to get even bigger.

MARTIN: The title of your book is “Losing Big: America’s Reckless Bet on Sports Gambling.” So, what’s the problem as you see it?

COHEN: And just to be clear, I’m actually in favor of sports betting and I think it’s totally harmless and totally fun for someone to bet $5 on the Cubs to win or whatever team that they choose and to get a little more excitement out of sports from betting on sports. My issue is the way that this was unfurled and this way this was legalizing rolled out was, as the word I’ve chosen to use is reckless. It was sort of a full-on embrace or a full — all-out blitz, if you want to sort of use the sports terminology, with no consideration for the negative externalities, for the after effects, for the consequences for people who might develop gambling addictions, for young men in particular who might bet more than they can afford without any information, without any laying of the groundwork for how we could do this safely.

MARTIN: OK. So, let’s kind of walk through what are the problems as far as you see it.

COHEN: The problem are the effects that the current version of sports betting, and I’ll say even specifically — more specifically online sports betting has on people. And by people, I disproportionately mean young men between the ages of 18 and 35, who have sort of born the biggest consequences from the legalization of sports betting. And the very sort of specific concrete consequences are rising rates of economic insecurity, you know, huge prevalence of young men, in particular, betting more money than they can afford or more money than they have, a large percentage have admitted that they have been unable to pay one of their bills because of the amount of money that they bet every month. Rising rates of bankruptcies, of credit card delinquencies in states that have legalized online sports betting. As well as sort of the most dramatic evidence, which would be rising rates of problem gambling as much as — there are lots of different indicators of this, you know, calls to hotlines, text to gambling hotlines, and then something called self- exclusion. So, if I decide, you know, I really just can’t control my betting, I need to register with the state and let the, and the state is going to cut me off and they will not let me legally bet anymore, the rates of people in states like Pennsylvania that have self-excluded just in the last seven years outpaced the entire 12-year period prior to legalization. So, we’re getting more self-exclusion just in the last couple of years than we saw for a decade plus prior to sports betting legalization.

MARTIN: You profile a couple of people that make the point that you’ve been making here. One of them was a young guy named Kyle. Why don’t you tell me about him?

COHEN: Yes. So, Kyle was really excited for Colorado to get in the game and to legalize sports betting. And when the state did so, in 2020, he downloaded, you know, every different sports book app, took advantage of every bonus offer. He quickly ran into one of the problems I described where he sort of didn’t realize how much he was betting and couldn’t pay his rent one month and had to ask his parents to help him out because he had bet more than he could afford. And he has been able to stop and he’ll go six months and he’ll fall down this really intense gambling rabbit hole where gambling basically consumes his entire life, and he lost a job because he was in one of these rabbit holes. And when he was up when he’s winning, he sort of had this overconfidence and then when he would lose, it just sort of shattered his sort of sense of self and his mental health and would lead to substance abuse and all sorts of other attendant problems. So, he has since moved back with his parents outside of Wichita, but is still going through these exact phases where he’ll go for a few months with no gambling, and then lo and behold, the NFL season starts. I know he can’t wait to bet on the Chiefs. And here he goes again. He sort of has been unable to bet safely. And this someone who, by his own admission, would not have bet otherwise, if it had not been available sort of legally on his phone. You know, when he goes to a casino, he’s really been able to control himself. This not a gambling problem. It’s an online access problem that is the root of his issue.

MARTIN: Interesting. Why is that? You’re saying it’s because of the online access that it became so consuming. Why would that be?

COHEN: Yes, there are many reasons. One of them is the fact that when you’re betting online, you can bet on anything. And I don’t just mean you can bet on any game, but you can bet on any result within any game and sort of micro betting. You can bet on, of course, the results of the game itself, but also individual players and their results. And then when the games are over, you know, let’s say at 1:00 in the morning or so, you can bet on Malaysian women’s doubles badminton. And people Kyle who sort of developed gambling addictions, they’re not actually looking to bet on sports because they love sports at that point, they’re looking for action. They’re looking for a chance to risk and win money and sort of satisfy their need for action, which is what sort of gamblers — problem gamblers are actually addicted to.

MARTIN: The thing I have to ask, though, is that in your own reporting indicates that only something like 3 percent of Americans fall into this category of a problem gambler. And I think some reasonable person might say, well, I’m sorry, that’s 3 percent. This actually a small percentage of people who are participating who fall into this problem category. So, what would you say to that?

COHEN: I would say a few things. First of all, problem gambling is the kind of issue that has a lot of societal side effects. So, there’s a study from Australia that every person who’s addicted to gambling, either through their financial needs or their psychological needs, their addiction will affect five or six other people. So, all you need — you can do the math of 3 percent of the American population, each of them affecting our adult population, each of them affecting five to six other people, all of a sudden, we’re talking about tens of millions of people who have been affected one way or another. by problem gambling.

MARTIN: Say more about what you think some of the other problems are. And then, there’s another guy that you profile named Arthur, who was embezzling money in order to support his gambling habit. And that was a whole, you know, chain of events that I think people could anticipate. But what are some of the other negative effects that you see?

COHEN: Gambling addicts, people with a gambling problem have a higher rate of suicide and suicidal ideation than any other form of addiction. Because it is a deeply sort of shameful addiction that we have not sort of societally, I think, destigmatized. There’s a sense that because it’s a financial addiction that if the person were to, you know, be gone, that their addiction would be gone or all their problems would be gone. And so, there — so, that, I think, for the gambler themselves, is a huge problem. And societally, I mean, I think we should all wonder or ask ourselves if sports betting was nominally legalized for the purposes of raising state revenue and for the purposes of making money for government. But I think it’s worth asking ourselves if it is worth exploiting or preying on these vulnerable people or addicted people for the purpose of raising a little bit of extra money for the general fund.

MARTIN: And why do you say that? Are you saying it’s because the bulk of the revenues come from a very small group of people?

COHEN: That’s exactly right. So, I mean, just to take the case of NFL bettors, the 3 percent you mentioned, the top 3 percent of NFL bettors in the 2023-2024 season accounted for 82 percent of sports book revenue. So, it’s not an accident that there are people developing gambling addiction, that there are people betting more than they can afford, it is the fundamental business model. A decline in rates of problem gambling would dramatically impact the bottom line of sports betting and of sports betting companies, and they have a direct financial incentive and a need almost for the perpetuation of people betting more money than they can afford.

MARTIN: And when you took that data to the sports betting companies and you presented these findings and said, hey, your business model depends on actually people problematically gambling, it’s not your casual, hey, I’m having a Super Bowl party, let’s throw some money, and it’s a small group of people who probably have a problem, what do they say?

COHEN: So, they — well, they insist, first of all, that it is not in their short-term financial interest to extract money for betters. Of course, it actually is. But they insist that what they want to build is a long-term sustainable business where people are betting comfortably and they’re not sort of extracting money from Kyle and extracting money from Andrew and sort of moving on. Important fact, that is, of course, what is actually happening and what they’ve actually built. But they insist that what they want is something that is long-term that is sustainable. And these companies repeatedly pointed this idea of responsible gambling or responsible gaming, which is their pitch. That they’ll tell players in advertising or on the apps to play responsibly, which is, they’re sort of — they see it as a get out of jail free card. They say, oh, we told you to bet responsibly. We’re campaigning on betting responsibly. The flip side of that or the implication of that is if you didn’t bet responsibly, it’s your fault, and that we told you to bet responsibly. And therefore, actual responsible behavior is in the hands of the individual bettor, not in the hands of the billion-dollar corporation enticing them to bet.

MARTIN: The companies, I think, would argue that they are following the law, that they are raising revenue for states and that, you know, the people who are gambling are adults who are making the decision. It’s just entertainment like any other kind of form of entertainment. What’s wrong with that?

COHEN: Yes, I think that’s true. And again, I’m in favor of people who want to gamble — gambling. I’m not in favor of people who have had their dopamine pathways rewired and are on the road to addiction being bombarded with advertising or with VIP hosts sort of texting them in the middle of the night, asking them if they want to bet or if they want to keep betting. I think people should be free to do what they want to do, but we should be able to protect the people who are the most vulnerable at the same time.

MARTIN: Are these betting apps required to issue warnings, for example, like, you know, like on a cigarette pack, it’s required now that they say, you know, this addictive, it can be harmful to your health? Don’t these sports betting apps have similar product warnings now?

COHEN: I mean, of course, if you scroll to the bottom of your Fandrill app, you’ll see the number for the responsible gambling hotline that — for you to call, and they’ll, in fact, put their responsible gambling tools front and center. But to me, that sort of speaks to the point of they know that these responsible gambling tools are not effective and data shows that they are — that only a fraction of players actually use the responsible gambling tools that limit their own play. So, all these tools are optional. The companies love to boast, you know, that all the company — all these players looked at their total amount bet over the course of the last month or the last year, which is one of our responsible gambling tools. But the real tools that actually help people gamble responsibly, which are available on the apps are things like time limits, like deposit limits, like locking yourself out at certain hours. And data indicates that a fraction — and in some cases, a fraction of bettors have ever used these tools because they’re completely voluntary. And then, not to mention the fact that once you’ve encountered some harm, once you’ve developed a sort of a borderline addiction, you’re never going to sort of limit yourself artificially and premeditatively. It’s just not realistic about how these things are going to work. And yet, the company sort of hang their hats and they say, oh, we’re going above the law, we’re going above the requirements from states because we are making all these tools available, but they’re not actually making them appealing or make them interesting or make them in such a way that people will actually use them.

MARTIN: And what you’re saying, though, I think you said is that actually when the states have some — basically, you have the option of barring yourself from participating in some of these apps, you’re saying people are actually doing it. Why is that?

COHEN: Right. And one of the reasons I’m in favor of a federal framework is I can exclude myself in the State of Connecticut, but that doesn’t involve excluding myself in the State of Massachusetts. So, a federal framework of some kind wouldn’t say, OK, John has decided he can’t control his betting. He is now banned at all 39 states that offer legalized gambling from legalized gambling services. And I think that is — so, a state-by-state approach is helpful to an extent, but only takes us so far.

MARTIN: It’s so interesting, Jonathan, because it’s like — it seems like we’re having a lot of conversations as a culture with how we navigate this world of like social media and, you know, just the online experience. Do you put this kind of — kind of hesitancy to deal with gambling and the harms of gambling for the people for whom it is a harm, is that part of our kind of American kind of libertarianism, let people do what they want, or is it you think, in general, that we’re just not really sure how to deal with all these new technologies? Like, what do you think?

COHEN: Yes, I think it’s a great question. I think supports gambling hits at the exact sort of center of those two where we were OK with gambling and we were OK with people gambling as much as they wanted, generally speaking, but never before has gambling been as dangerous for the gambler as it is now. Never before have — you know, the Las Vegas founders would drool at the amount of data that DraftKings and Fanduel have about every single person who’s ever opened their app. And the consequences of that for gamblers is really dangerous. And it’s really easy, as a result, for — through marketing, through enticements, through other means of people betting more than — you know, in their sober state than they would intend to. So, I think — I mean, generals — generally, agree with you, sort of inclined towards this libertarian streak of, oh, let’s let people gamble, but the technology and the technological aspects of modern sports gambling seems like a bridge too far.

MARTIN: I know that in the book you have some recommendations about what you think would kind of mitigate the harm for the people who are most at risk. What are some of those steps?

COHEN: I would say there are two sort of big categories. The first would be legislative and on the policy side. And these are things that I don’t think have to happen through regulation. I think that companies could implement them themselves. And if they choose not to, then, as you said, the states could or the federal government could. These would be things like limiting the number — the amount of deposits a player can make within a certain number of — a certain period. The — limiting, let’s say, the amount of money they’re allowed to deposit over a certain amount of time, maybe making them prove that they can afford exactly how much they’re betting over a given period. And then, also, shortening the list of betting options. I don’t think any single person in America needs to be able to bet on adult — on Malaysian women’s doubles badminton at 3:00 in the morning. You know, Kyle, for example, was betting on minor league British darts at 2:00 in the morning because it was the only thing that he could bet on. And I just think what those games are is a trap for problem gamblers that make a small amount of money for companies, but induce a huge amount of harm for the bettors themselves. So, again, deposit limits, affordability checks and a reduction in the list of betting options I think would be, sort of, three that stand out to me on the policy side. And there’s a whole other category that we referred to earlier about de-stigmatization and about sort of conversations that I think parents need to start having with their kids, particularly the young men, you know, teenage boys, about gambling, because all the messaging they’re getting about gambling right now is from Kevin Hart and LeBron James and Charles Barkley during commercials, and it’s telling them that gambling is really, really fun and that they can win money, and if they have — that they’re so smart and they know all about sports and they can turn that hunch into money. And I think they need some counter programming. They need to be told, first of all, that gambling can be addictive and second of all, how easily and without any intention on their part, they can sort of fall down this rabbit hole and develop really, really severe mental health issues that will be with them for the rest of their life.

MARTIN: Jonathan Cohen, thank you so much for talking with us.

COHEN: Thank you.