For countless people, professional and college sports are more than just games. They serve as a vital outlet for community pride, a much-needed escape from daily stress, and a means of connecting with something larger than ourselves. Sports often reflect societal struggles, from the fight for trans rights to the support for Black Lives Matter, as demonstrated by the NBA players’ strike in 2020.
However, for billionaires, sports have become a lucrative business venture. Major franchises rake in billions through ticket sales, merchandise, and lucrative TV deals. Colleges build their reputations on the backs of unpaid “amateur” athletes, while wealthy owners frequently shift the financial burden of extravagant stadiums onto the public, catering to affluent fans. In the eyes of the ultra-rich, owning a sports team is a hallmark of true wealth.
Betting Takes Center Stage
By the 2010s, sports moguls had their hands in nearly every facet of the industry—except for gambling. While friendly bets among friends and office pools remained popular, large-scale betting was restricted due to legal hurdles. This all changed when tech giants and venture capitalists saw an opportunity in the digital sportsbook market, prompting major leagues to embrace sports betting.
The Supreme Court’s Game-Changer
For decades, sports betting was heavily regulated and, in many places, outright illegal. Some states had constitutional bans, and federal laws like the Professional and Amateur Sports Protection Act (PASPA) severely limited betting activities. However, a landmark Supreme Court decision in 2018, stemming from the case Murphy v. National Collegiate Athletic Association, overturned PASPA, citing states’ rights. This ruling quickly transformed online sportsbooks into a booming multi-billion dollar industry.
As states rushed to legalize sports betting, both Republican and Democratic politicians fueled this trend. Notably, influential states such as Nevada, New Jersey, and New York, led by Democrats, have become key players in the gaming policy landscape.
The Impact of COVID-19
By early 2020, the pandemic accelerated the growth of sports betting. As people were confined to their homes, lawmakers searched for new tax revenue sources, and individuals sought entertainment during lockdowns. In September 2023, a record 73.5 million Americans planned to place bets on the NFL season, marking a nearly 60% increase from the previous year. By the end of 2023, 33 states had legalized online sportsbooks, with the industry managing over $250 billion in bets—more than California’s annual public education budget.
How Sportsbooks Profit
On average, bettors receive back only $90 for every $100 wagered. After accounting for promotions and taxes, the industry retains $15.9 billion, leveraging advanced technology to ensure profitability. This means that the sportsbooks maintain control over the odds and payouts, ensuring that they consistently come out ahead.
Recognizing this lucrative market, Wall Street and venture capital firms have poured money into major players like DraftKings and FanDuel. Their extensive advertising campaigns have allowed these corporations to dominate the market, while the everyday bettor is left at a disadvantage.
The Connection Between Sports and Gambling
The rapid expansion of the sportsbook industry has raised concerns about the integrity of sports themselves. Recent deals, such as the acquisition of a majority stake in the Dallas Mavericks by billionaire Mark Cuban in conjunction with Republican donors, blur the lines between sports and gambling, raising questions about trust in the games we love.
Public Health Concerns
While the sportsbook industry touts its rapid growth as harmless entertainment, the reality is more troubling. The model is inherently skewed against the average bettor. The National Council for Problem Gambling reports that the risk of gambling addiction surged by 30% between 2018 and 2021, a direct correlation with the legalization of sports betting.
Additionally, the accessibility of online sports betting, often available through smartphones, poses a greater risk for compulsive gambling compared to traditional casinos. Some proponents argue that legalizing sports betting brings it into a safer, regulated environment. However, this overlooks the fact that legalization has led to an unprecedented expansion of gambling activities, resulting in significant social costs.
The Myth of Economic Benefit
Supporters of the sportsbook industry often claim that it boosts local economies and generates tax revenue. Yet, evidence from New Jersey, the first state to legalize sports betting, suggests otherwise. A recent report indicated that the influx of betting actually diminished economic activity by approximately $180 million, while the tax revenue generated may not adequately address the social issues exacerbated by gambling.
Proposed Solutions
For many working-class individuals, sports betting can be a fun way to engage with their favorite teams. However, the line between friendly wagering and exploitation is often blurred. To protect the public, measures could be taken to limit promotional offers and restrict advertising similar to regulations on tobacco products. Additionally, introducing limits on daily wagers and imposing “cool-down” periods could help mitigate compulsive gambling.
To maintain the integrity of both sports and betting, prohibiting cross-ownership between franchises and sportsbooks is essential. Furthermore, the introduction of significant taxes on these industries could fund mental health and addiction services to address the societal impacts of gambling.
Ultimately, the approach to sports betting should prioritize community welfare over the profits of billionaires, ensuring that everyone can enjoy sports without the undue financial burden that comes from exploiting a game.
