When Asher first attended a Gamblers Anonymous meeting in 2022, there were only about a dozen people there. Now, there are about 60 people there, most of whom are newcomers to dealing with online sports betting addiction.
Asher, who asked the Thomson Reuters Foundation to use a pseudonym to protect the privacy of his recovery group, initially became interested in gambling through online poker.
“It was very easy to open these gambling accounts online,” he told the Thomson Reuters Foundation. “At one point, I lost over $500,000 because of this addiction and almost lost my family.”
Dr. Timothy Fong, co-director of the Gambling Studies Program at UCLA, said health centers used to be flooded with seniors who had lost their savings at casinos, or were addicted to slot machines.
However, now those coming to the clinic are young men addicted to online gambling, risky crypto and stock trading, and increasingly online sports betting.
“Everything has changed,” he said. “We're in the second half of the gambling crisis. We don't know … if this could be on the level of the opioid crisis.”
Sports betting ban lifted in US
Previously, the US Supreme Court changed online gambling in 2018, striking down a nationwide ban on sports betting.
Since then, 38 states and the District of Columbia have legalized sports betting, according to the American Gaming Association, an industry group that generated more than $11 billion in revenue for the sector last year.
The ability to tax such new revenue streams is particularly appealing to state and city officials dealing with post-pandemic economic turmoil, said Richard C. Auxier, a principal policy associate at the Urban-Brookings Tax Policy Center.
“You'll hear people say things like, 'This is going to fund schools,'” he said. “Politicians are making a point of saying, 'We're not going to have to raise property taxes!'”
However, Auxier warns, the government taxes companies on their earnings, so the state only makes money when gamblers lose.
“This is not free money, this is people's money. And when this gambling moves to mobile phones, it comes from people who may be addicted,” he said.
Joe Maloney, a senior vice president at the American Gaming Association, cited state-level studies showing that “problem gambling” rates remain low, even in some places that have recently legalized online gambling.
“Responsible gaming is the foundation of sustainable growth,” he said.
Maloney said a well-regulated and legal industry is best equipped to help tackle gambling addiction. “The industry has no interest in creating problem gamblers.”
'Significant' revenue
According to a US Census Bureau report in February, sports betting revenue for state governments was more than $505 million during the third quarter of last year, up 20 percent from the same period the year before.
Sports betting tax rates vary significantly, up to 51 percent in New York and Rhode Island.
In recent years, revenue from gambling has accounted for about one percent of state and local budgets, Auxier said, a number he called significant.
But like other “sin taxes” such as alcohol or cigarettes, gambling revenue offers an “unfair incentive” for local officials, said Kamolika Das, director of local policy at the Institute on Taxation and Economic Policy.
Such taxes typically serve partly to “discourage consumption, but then reduce revenues,” he said, noting that long-term growth from sin taxes tends to be quite weak.
“So, a lot of regions are doing this as an immediate way to plug budget holes, but it's not a long-term solution,” Das said.
Meanwhile, legalizing online sports betting often leads to a spike in gambling addiction, experts say. Last year, Florida saw calls to its gambling addiction helpline double after online sports betting apps launched in the state.
“Many people who call the helpline have gambling debts that are more than double their annual income,” said Keith Whyte, executive director of the National Council on Problem Gambling.
The group operates a national helpline that nearly doubled calls and texts between 2020 and 2023.
Maloney, the gaming industry executive, stressed that calls to helplines are not a direct measure of the level of gambling addiction, and may be the result of greater awareness of helpline numbers.
Protection and service
In Massachusetts, a decades-old nonprofit that addresses problem gambling has seen its work transformed by the app.
“You don't have to get in your car, no one is watching you, you can continue to access the games — that's a huge deal,” said Marlene D. Warner, chief executive of the Massachusetts Council on Gaming and Health, which has received support from the state.
The group has long had on-site experts who can help with gambling problems at casinos, and now offers a similar service via online chat, although Warner said more needs to be done to ensure minors are kept away from online gambling apps.
While Massachusetts has received praise for its robust funding for such support services, gaps remain elsewhere.
States set aside nearly $100 million to address problem gambling last year, nearly all of it coming from taxes paid by the industry itself, according to the American Gaming Association.
But there are eight states that don't provide government-funded services for gambling addicts, said Whyte of the National Council on Problem Gambling. “In many states, you might only get six sessions of services — that's not enough,” he said.
The council recommends that 2% of gambling revenue be set aside for service programs. It estimates that the social cost of gambling in the United States is $10 billion per year, including health care and incarceration costs.
The council also urged states to institute 39 safety standards for online gambling — including deposit limits, tools for users to block certain apps, and direct links to addiction help.
Risks of online gambling addiction
The gambling industry has launched its own standards for “responsible advertising” for online sports betting, which include directives to target ads at users aged 21 and over, and guidelines to make it clear that betting carries risks.
Many of the big players have introduced tools that allow users to set betting limits, or exclude themselves from the app, as well as offering information on how to seek help for addiction.
But policymakers are increasingly aware of the risks. In July, state lawmakers met in Pittsburgh to draft legislation on Internet gaming, which is expected to be released this month.
Meanwhile, some say the rise in online gambling could bring new opportunities for protection.
“There are a lot of online elements that are game-changing in terms of responsible gambling,” said Warner of the Massachusetts Council on Gaming and Health, such as allowing people to set limits on wins, losses or the amount of time spent.
AI tools can also assess a person's risk before it becomes a problem, he said.
“This changes our world dramatically. If we can send a message to someone who is starting to go down a problematic path, whether by AI or human, that would be amazing.” (th/uh)
