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US Sports Betting Growth in 2022 Not Without Risks

Although more than 112 million Americans can now legally wager on sporting events in their state, the US sports betting industry is still in its infancy. Unsurprisingly, many investors are rushing to get in on this market predicted to be worth more than $140 billion by 2028. However, some worry that the pace of proceedings could leave problem gamblers without a safety net.

Since the Supreme Court overturned PASPA (Professional and Amateur Sports Protection Act) in 2018, 30 states have struck deals with gambling operators such as Caesars, DraftKings, and MGM.

Ohio Governor Mike DeWine’s approval of a new gambling bill last December capped a busy year for the industry. Ten U.S States changed their betting laws to legalize sports wagers, and 11 went live in 2021.

Industry stakeholders expect 2022 to be another year of growth. The New York State Gaming Commission kicked off this year by allowing online betting apps to launch on January 8. California, Georgia, Massachusetts, and Missouri look likely to legalize sports betting in the coming months.

“There’s been a huge growth, but those states are major swings in how big the legal US market will be,” said Christopher Halpin, the NFL’s executive vice president and chief strategy and growth officer, in an interview with the Washington Post.

Rapid Growth Since 2018

According to LegalSportsReport.com, US bettors have wagered more than $87 billion on sports since PASPA was deemed unlawful. Although many thought the repeal of the act would simply give existing bettors legal avenues to place wagers, early returns show that these new accessible betting options have attracted new audiences.

Most US states are seeing year-to-year growth. New Jersey broke records by accepting over $1.26 billion in sports wagers in November 2021. This news came two months after The National Council on Problem Gambling released a study showing that the number of Americans who wager on sports had grown by 30% within an 18-month timeframe – an increase of 15.3 million bettors. Many worry that the speed of this growth could leave at-risk bettors without adequate support.

Keith Whyte, executive director of the NCPG, said that it’s too “early to tell the impact and severity of gambling addiction.” However, early research conducted by the organization suggests the risk of problem gambling has doubled since 2018. “The signs we’re seeing are very troubling,” he said.

Various sports league executives have stated they would play an active part in encouraging the implementation of safety protocols when partnering with gambling providers.

“We always say, ‘If they break it, we still own it,’ ” said Halpin, “and we’re as exposed as the worst sportsbook in the worst market.”

The NFL has also analyzed established international gambling markets to ensure they appeal to potential gamblers without offending fans. In the UK, for example, when government officials started reviewing regulations, soccer leagues limited advertising opportunities at games to stay one step ahead of any rule changes. Additionally, most bookmakers agreed to only broadcast television commercials after 9 pm.

“They’ve had to react to some of the backlash and put some of those things in place,” said Casey Clark, senior vice president of the American Gaming Association. “We’re not ever going to be in that position because we’re kind of light-years ahead of where they were at this point of their maturity.”

In the US, however,  gambling commercials are aired at all times of the day. Some viewers have now started to voice their disapproval. The Federal Communications Commission records show that it has received various complaints related to sports gambling advertisements.

Major American sports leagues have already placed limits on the number of commercials per game. For instance, the NFL permits one ad per quarter, in addition to one pregame and one at halftime. However, most gambling ads are broadcast outside this three-hour game window, especially in commercial blocks controlled by local stations in states with colossal gambling markets such as New Jersey, Michigan, and Colorado.

“It’s like a political season because they’ll just sell the ad to whoever has the highest and most demand,” commented Halpin. “Local sports betting operators can pay more than anybody else.”

Many sports media companies have a massive stake in the gambling industry. Barstool Sports operates a sportsbook available in 11 states, and Fox Bet offers betting services in New Jersey, Pennsylvania, Michigan, and Colorado. Also, according to the Wall Street Journal, ESPN has been discussing deals with sportsbooks that could net the broadcasting company $3 billion.

The tricky part for sports leagues is creating content that caters to gamblers but doesn’t annoy other fans not interested in gambling. An NFL study found that although 42% of its fans were casual bettors, one in five objects to sports betting. For this reason, the league encourages its television partners not to alienate members of its fan base with tailor-made commercials for gamblers.

“Gaps in The Safety Net”

Whyte of the National Council on Problem Gambling said its call centers are busier than ever and that he’s concerned about the lack of resources available for problem gamblers.

“In the conversations we have with leagues, I think they’ve been unpleasantly surprised at all the gaps in the safety net,” Whyte said. “I think that a lot of leagues and a lot of their owners took the industry’s assertions at face value: ‘Oh, we’ve got this responsible gambling thing covered. Don’t worry. It’s all good.’ “

As regulations and resources around legal online gambling vary from state to state, so does the amount allocated to problem gambling services. Some states dedicate significant sums earned from taxes on revenue to support services, while others spend nothing.

According to a recent survey conducted by the NCPG, young customers and those who play daily fantasy sports are more at risk of developing gambling problems. Whyte said that operators target underage bettors by letting them open fantasy sports accounts for free. Upon signing up, the gambling operator obtains personal information of its users, enabling them to send customers betting promotions as soon as the patron has reached legal betting age.

Although worrying signs are beginning to surface, it is doing little to halt the rise of the US sports betting industry in 2022.

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