Four years ago it was illegal to play sports in most of the United States. Today, anyone who turns on the television, visits a sports website, or shows up at a stadium is likely to be inundated with advertisements to bet, bet, bet.
The New York Times has spent almost a year examining how the sports betting industry grew so big so quickly – and the implications that will have for public health, taxpayers, the sports world and more.
Here are some of the key findings from our reporting.
Gaming companies and sports leagues had a big day with state legislators.
After the Supreme Court opened the door to sports betting in 2018, lobbyists pushing for the legalization of online betting showered state officials with millions of dollars in gifts, parties and donations, at times sidestepping campaign finance rules. Many lawmakers proved compliant.
The gambling industry used dubious data to push for the legalization of sports betting, in part by predicting that states would be greeted with a torrent of new tax revenue. A Times analysis of industry claims found that many of the forecasts, so far at least, have been wildly optimistic.
That’s partly because legislators have granted gambling companies lucrative tax exemptions. These exceptions essentially subsidized their efforts to entice customers with supposedly risk-free bets and other promotions.
In order to attract customers, gambling companies have entered into pioneering partnerships.
For example, The Times found that companies have paid at least eight universities to encourage on-campus gambling. For example, in a deal between betting company PointsBet and the University of Colorado Boulder, the university charges a $30 fee every time someone downloads the PointsBet app and uses a special promotional code.
Casino company Penn Entertainment took a different approach.
It agreed to buy Barstool Sports, a controversial suite of websites, podcasts and more. Barstool founder and ringleader David Portnoy has a history of misogynistic and racist behavior – and has now become one of the sports betting industry’s most prominent spokespersons.
Mr. Portnoy is the kind of person who traditionally would have been subject to scrutiny by government regulators. In addition to his record of offensive behavior, The Times learned that he had previously filed for bankruptcy, citing among other things $30,000 in gambling losses in one year – a typical red flag for gambling regulators. But in 12 of the 13 states where Penn operates Barstool-branded sportsbooks, regulators didn’t require Mr. Portnoy’s license review.
State regulators have often been overwhelmed and overwhelmed.
The federal government does not regulate sports betting. A Times survey of states that have legalized such betting found that enforcement of rules has been arbitrary, penalties have tended to be light or non-existent, and regulators rely on the industry to police itself.
The more people bet, the more taxes the states collect. While also trying to protect consumers, regulators have an incentive to help gambling companies get up and running quickly. Some states allow them to operate before regulators have completed extensive licensing reviews.
The sports betting industry has been creative in devising ways to convince people to keep betting even after they’ve lost money, but tools to make it easier to quit – some run by gambling companies, some by states – don’t always work. In Indiana, for example, people who asked the government for help to stop them from gambling found they could still place bets. Dozens did.