One thing about gambling, especially the online variety: the closer we examine it, the worse it looks. The Vox website provides an example (available to read or listen):

Sports gambling should have stayed in Las Vegas

Sports betting is bad for sports– and for gamblers

Some of the salient points made during the discussion:

  • Sports gambling was already an institution in the US. Best estimate is that more than one in three Americans have placed a bet on sports. Last year, for example, sports gambling by itself generated nearly $11 billion in revenue.
  • As an emerging industry, legalized sports gambling appears to be following in the footsteps of other such businesses based on what were once considered ‘vices’. Like alcohol, and tobacco.
  • The more successful such industries become, the more problems they tend to create for society. At some point, the costs outweigh the benefits– presenting us with some difficult choices.
  • Disappointed sports bettors have become a major source of harassment for athletes, college and pro. For them, social media can be an extremely hostile environment.
  • During the interview, Charles Lehman reminds us that the major selling point for legalization of sports gambling was to generate all this tax revenue that could be used for the betterment of society. Unfortunately, those returns have fallen far short of expectations.
  • Meanwhile, the black market, including offshore betting, has continued to thrive. Rather than contracting, the marketplace has expanded.

The article goes on to cite a massive study from researchers at SMU that concluded “…Only about 5 percent of people… withdrew more from the apps than they deposited.” The other 95 percent? In the loss column.

I suspect the same psychology is involved as with the hugely popular Powerball lotteries. The odds against winning there are tremendous, but the marketers only show you photos of the winners. If they showed the losers– vast hordes of them– it would almost certainly discourage people from placing a bet.

And as expected, a small minority of consumers who qualify as heavy, frequent users will provide much of the revenue to the industry– which will go out of its way to cultivate them. “The really interesting thing is that about 3 percent of bettors drive 50 percent of sports gambling profits.”

I imagine the industry hopes to cultivate more bettors of that kind in the future.