the growth of sports betting

The thrill of making money from picking the right team is tantalizing, so much so that

people are willing to put everything they have into a game which they don’t know the outcome

and where the odds are against them. Over the past half dozen years legalized online gambling

has formed a silent partnership with professional sports and become the right-hand man to the

professional sports world. Gambling has driven up engagement and revenue for both the leagues

and the bookmaking companies. But how has this affected individuals and our society, and how

did we go from a society that viewed sports betting as a disease and a crime to one which

appears to have accepted online gambling as another productive high-tech industry?

The Unlawful Internet Gambling Enforcement Act signed by George W. Bush in October

of 2006 banned gambling companies from taking money through the internet. At the time this

law was passed gambling was a crime nearly everywhere in the U.S. With the exception of Las

Vegas and Atlantic City, the “gaming industry” was operated and controlled by the same types of

mobsters and criminal organizations that controlled, prostitution, loansharking, illegal drug and

similar vice “industries”. As a result of rapid growth of the internet at the turn of the century,

offshore online gambling sites were gaining in popularity and were viewed as a threat to laws

generally banning gambling throughout the United States.

The 2006 Unlawful Internet Gambling Enforcement Act was intended to eliminate the

threat posed by offshore internet gambling sites. However, in attempting to eliminate one threat

the government inadvertently opened another. The law, banned wagering on games of chance,

however it did not ban wagering on games dependent upon a player’s skill, such as fantasy

football, this would prove to be the game changer. As a result, the popularity of fantasy football

exploded, and many people, including kids of all ages, were introduced to online gambling

through fantasy football.

Fan Duel broke onto the scene in 2009. Fantasy sports were deemed as games of skill not

chance, rendering the fan duel an online fantasy football app legal. Fan duel wasn't just a way to

bet with your friends, you could play against people all around the world picking a new team

every week. You could play games wagering as little as one dollar or as much as a thousand

dollars. Within a year of its introduction Fan Duel had their first million-dollar winner. With

this exponential Fan Duel became very profitable.

As a result of its ability to slip under the online gambling ban enacted by the Unlawful

Internet Gambling Enforcement Act, Fan Duel was the trojan horse which gave rise to the online

gaming industry we see today. The free-flowing nature of Fan Duel was clean and fun and was

seen as harmless to people who generally viewed gambling as a vice. In 2011 Fan Duel

partnered with the NBA. Its competitor, Draft Kings signed partnership deals with the NHL and

major league baseball. For the first time, we saw mainstream gambling being thrust into every

sport.

The explosive growth in fantasy sports betting was due to a few key factors: cheap buy-

ins; ease of use; and low sense of risk; but most of all the growth of fantasy sports betting was

fueled by the iPhone. No longer did you have to travel to a casino or contact and illegally place

a bet with a bookie. The iPhone was with you 24/7 and made betting on sports quick, easy and

subject to impulse.

Critics started to question the differences between fantasy sports betting and traditional

(illegal) betting on a game. At this time sports betting had been banned in every state except

Nevada. In 2006 56 percent of Americans disproved of sports betting and viewed gambling

with a bookie as a dirty vice shadowing legitimate sports. Many viewed gambling similar to

illegal drug use, while it was the user's choice to use drugs it was the drug itself that kept them

hooked leaving behind terrible repercussions.

By 2017 only 33 percent of Americans opposed gambling. Many viewed the ban on

gambling as causing as much harm as it was preventing. With the demand for sports gambling

strong large amounts of money was being bet illegally through mobsters and bookies, which

were seen as having a corrupting influence on sports. In the early 2000s there were multiple

point-shaving incidents and a huge incident involving a NBA referee who became deeply in debt

through illegal gambling and was fixing games for the mob. The American Gaming

Commission estimated that Americans were betting 150 billion dollars a year on sports, with a

small percentage going through legal means in Nevada.

With Americans opinion shifting and state governments eyeing a source of additional tax

revenue, the ban on sports gambling was finally overturned in 2018. Today sports betting is

everywhere. It is estimated that 30 percent of Americans bet on the NFL every year. Gambling

has now become an integral part of sports culture.

Why is it so addicting and why has it exploded? First is the enjoyment of the game. One

of the reasons fantasy football works so well is because fantasy football makes games for teams

you are not a fan of have actual stakes. Each time you win when betting the brain releases a

chemical called dopamine which is a “reward” chemical in the brain. But with each win, it

becomes harder and harder to achieve the same boost, causing you to bet more frequently and in

greater amounts. The feeling of losing is the hardest part, especially in sports, where there is a

lack of control and the odds are in your favor. When presented with a loss, you either accept the

loss or try and win it back with another bet. This endless cycle is how people get deeply in the

hole. Secondly, with gambling, there's an illusion of safety and a huge upside. Every better

dreams of hitting that huge bet and walking away with a million dollars.

Humans are terrible at assessing risk, especially young adults, who tend to be impulsive

and often don’t consider the negative consequences of their decisions. Half of the people who

bet on sports fall between ages 21 and 30. The growth of gambling has also been fuel by the

introduction of gambling at young age through fantasy sports betting.. I remember when Fan

Duel came out my friends on my street were all using it they had set it up through their parents

and had used their allowance to place small 1 to 3-dollar bets. I feel that this is one the reasons

that we saw a 7 billion dollar increase from 2019 to 2023 as the generation who had used fan

duel as kids finally came to age.

As a result of legalization of online sports betting, within less than a generation, gambling

in the U.S. has been transformed from a dirty vice run by bookies and mobsters, to the “gaming

industry” controlled by venture capitalist and corporations, with minimal government regulation.

As is the case with drugs and alcohol, gambling poses an inherent conflict between individual

freedom and what is good for society as a group. During the past 15 years the U.S. has moved

from prohibiting gambling to promoting and taxing it as a legitimate industry. As this industry

grows, and my generation ages, the negative effects of unregulated legalized gambling will

become increasingly clear. For now what once was a dark shadow of American sports now is the

front center and tied to every game, every play, and every call.