Online Sports Betting: Protecting Users from Increasing Odds of Addiction

Photo courtesy of Focal Foto.

Before and during the 2024 Super Bowl, 67.8 million American adults bet a total of $23.1 billion on the finale of the NFL season, reaching transaction frequencies of 15,000 wagers per second in the moments before kickoff. Since its legalization in the United States in 2018, the rise of sports betting has created a growing and profitable industry that has been dominated by popular online betting platforms. Though beneficial for the American economy, the increased accessibility of sports betting has also exacerbated the negative impacts associated with the addictive nature of gambling. A plethora of laws exist for controlling the sale of addictive substances like tobacco and alcohol, while the similarly addictive sports betting industry has minimal legal regulation. As the industry continues to expand, legislation mandating preventive measures against online sports betting addiction must be enacted.

The movement to ban sports betting reached its peak in the 1990s when executives from the National Basketball Association and the National Football League forcefully advocated for a federal ban on sports gambling at the urging of then Major League Baseball (MLB) Commissioner Fay Vincent. To justify their push for the ban, the executives cited previous scandals in which betting had compromised the integrity of professional league games. In the MLB, for instance, players for the Chicago White Sox intentionally underperformed to lose the World Series to the Cincinnati Reds in exchange for payments from gamblers, and former Reds team manager Pete Rose bet on the outcomes of his team’s games during his time in the role. A ban was indeed enacted in 1992 with the passage of the Professional and Amateur Sports Protection Act (PASPA), which banned sports wagering in the U.S. in all but four states—Nevada, Delaware, Oregon, and Montana—that were granted exemption through a grandfather clause. In 2011, almost two decades after the ban was enacted, the state of New Jersey (which originally rejected the option to be exempt from PASPA regulations) held a public referendum for a state constitutional amendment allowing sports betting. 64% of voters favored the proposal. In 2012, following the referendum, New Jersey passed the Sports Wagering Act which legally permitted wagering at racetracks and casinos in Atlantic City. Five sports leagues sued New Jersey in federal court following the enactment of the law, citing PASPA as their rationale. The suit culminated in the Supreme Court’s 2018 decision in Murphy v. NCAA, wherein the Court ruled 6-3 that PASPA qualified as a violation of the anticommandeering doctrine of the 10th Amendment, opening the door for the relegalization of sports gambling across the United States.

Since the Court’s 2018 decision, 38 states and Washington D.C. have legalized sports betting, and two other states have active legislation to legalize the practice or scheduled referendums on the issue. 29 of these states have also legalized online or “mobile” betting. As of May 2024, sports betting has generated $31.5 billion in gross revenue from nearly $371 billion in total wagers since its legalization in 2018. However, the industry’s rapid growth and profitability have introduced unique challenges.

The increasing accessibility of sports betting through mobile apps and websites only exacerbates its addictive potential. Online sports betting companies like FanDuel and DraftKings allow users to gamble around the clock without traveling to a physical location, and live betting during games is readily available. Furthermore, the digital nature of the platforms means that information can be collected to tailor the gambling experience to individuals through algorithms. Matt Zarb-Cousin, a recovering gambling addict-turned-advocate for stricter betting laws in the United Kingdom, accessed data accumulated by the company Flutter (which owns FanDuel) and found that the platform had collected 93 data points on the individual user, allowing for more targeted and personalized notifications. This increased accessibility to sports betting via smartphone apps is significant, as victims of gambling addiction are generally younger and more susceptible to addiction related to constant dopamine rewards. Young adults are also more willing to compromise on their important financial obligations to maintain their gambling addiction. Research by the Nevada Council on Problem Gambling revealed that one in five college students have used college financial aid money to place bets. Despite the adverse addictive effects associated with increased accessibility, the sports betting market is only predicted to become more digitized in the coming years.

Initiatives addressing the dangers of gambling have been introduced globally. In the U.K., Premier League clubs have banned gambling company sponsors from advertising on the front of jerseys beginning in the 2026-2027 season onward. The Netherlands enacted legislation requiring online gambling companies to demonstrate that at least 95% of the audience reached by their ads is above the age of 24. The Canadian province of Ontario declared that professional athletes and social media influencers cannot advertise online sports betting. In December 2023, the Australian Senate passed legislation banning the use of credit cards to gamble online.

Similar measures have been proposed in the United States. Following the Court’s decision in Murphy v. NCAA, then Senate Minority Leader Chuck Schumer and former Senator Orrin Hatch drafted the Sports Wagering Market Integrity Act of 2018, proposing restrictions such as advertising requirements, a federal minimum age of 21 for gamblers, recordkeeping and “suspicious transaction” reporting requirements, and an expansion of certain provisions in the Sports Bribery Act. Their bill died in the Judiciary Committee. A more innovative approach to combating excessive gambling has been pioneered by the state of Ohio. The state’s “Time Out Ohio” program aims to help those facing gambling addiction by encouraging them to voluntarily ban themselves from casinos for periods ranging from one year to an entire lifetime.

Policy solutions that restrict advertisements are particularly effective, as they significantly reduce underage consumers’ exposure to the product. Alcohol advertisers, monitored by the Federal Trade Commission (FTC), comply with codes asserting that ad content should not be catered toward those under 21. No more than 28.4% of an alcohol ad’s audience can be underage. Tobacco product advertisements are monitored by the Food and Drug Administration (FDA) through specific guidelines that mandate large warning statements on ads and ban tobacco companies from sponsoring events. Sports betting, a similarly addictive activity, should be required to conform to a similar set of standards. Though the alcohol and tobacco industries must comply with FTC and FDA regulations, respectively, sports gambling companies comply with the American Gaming Association’s Responsible Marketing Code, a set of guidelines created by the association and its members (companies in the industry) with minimal oversight from stricter regulators. Since the guidelines essentially amount to self-regulation, companies can take advantage of less stringent environments in some states. As 75% of Americans report having seen advertisements for online sportsbooks, stricter legislation and enforcement is necessary.

Beyond regulating advertisements, there are other strategies for combating the development of gambling addictions among online sports bettors. Just as dram shop laws on the books in 30 states punish businesses that recklessly overserve alcohol to visibly intoxicated customers or those they know to have an addiction, online betting platforms should be compelled to implement a limit for bets lost, at which point users would be prohibited from further betting. Furthermore, legislation should be enacted that requires online betting companies to be transparent regarding the net gain or loss of the average user, thus ensuring that users are more aware of the risks associated with sports betting.

As access to sports betting has increased, regulations protecting consumers have not progressed at the same rapid pace. Without the enactment of regulatory guardrails, the continued growth of the online sports betting industry may come at the cost of lives ruined by gambling addiction.

Parishi Narain (BC ’27) is a staff writer for CPR from West Windsor, New Jersey, hoping to study political science and statistics.