Four years ago, live sports betting was illegal in most of the United States. Now, fans watching matches or attending matches at stadiums are blocked by ads that encourage them to bet on matches, not just watch as spectators.
This transition in sports betting began almost a decade ago, at first with the fantasy sports betting boom. Then, in 2018, the Supreme Court cleared the way for states to legalize betting on live games. Today, 31 states and Washington, DC, allow online or live sports gambling, and five other states have passed legislation allowing such betting in the future. Professional sports in the United States are now part of a multi-billion dollar corporate gambling business.
This change represents the largest gambling expansion in US history. Me and some of my Times colleagues have spent many months investigating how the industry has expanded and today I would like to highlight some of our findings.
Following the wider legalization of sports betting, casinos have partnered with sports betting platforms such as FanDuel and DraftKings, along with major professional sports teams, going state-by-state to promote sports betting. legislators accept it. Part of their persuasion toolkit? Millions of dollars in contributions from sports betting companies and their allies to those legislators’ campaigns.
We have found that representatives of the gambling industry have told legislators that they can expect to receive significant tax benefits from sports betting. In many states, that luck has dipped.
Take Michigan, home to the Detroit Tigers, Lions, Red Wings, and Pistons professional teams, along with two dozen other college athletics NCAA programs—in short, there are plenty of sports to bet on. Online sports betting begins in that state in January 2021, and the American Gambling Association predicts that state legislators can expect to collect more than $40 million in taxes each year. What has Michigan gained in the past year? Just $21 million in state and local taxes, according to the Michigan Game Control Board.
The gambling industry has also pressed states to keep taxes on sports betting low, warning that if states push the odds too high, sports fans will turn to the black market to bet on casinos. Unregulated website. Those warnings were misplaced. Several states, including New York and New Hampshire, have ignored industry advice and imposed the highest taxes on betting. They have seen bets placed at a higher rate per capita than many low-tax states. New York has seen so much betting — even with a high tax rate of 51 percent — that the state collected an extraordinary $546 million in taxes in the first 10 months of this year. That amount is half of the total state tax revenue on sports betting nationwide.
Many states also allow the gambling industry to offer hundreds of millions of dollars worth of tax-free bets to gamblers, essentially marketing the industry. Promotions are meant to entice new customers to form a new habit: betting on games. It’s the modern day equivalent of taking the free bus to Atlantic City casinos with a quarter thrown into the slot machines. Only Arizona sports betting operators have offered $205 million free bets. But for the states, the result is a huge shortfall in tax revenue projected in places like Michigan and Virginia. Some, including Virginia, have moved to cut tax-free bets.
The promotions are an example of how regulators excel in trying to monitor the industry when it is growing so fast. Rule enforcement is sporadic, penalties are mild or rare, and regulators often look to the gambling industry to police themselves.
A casino company, Penn Entertainment, co-operate with David Portnoy, founder of Barstool Sports, whose history of misogyny and racism makes him a public spokesman for sports betting.
To market the expansion of sports betting, gambling sites have reached unusual agreements with at least eight universities, including Michigan State, the University of Colorado at Boulder and Louisiana State University. Schools become partners with companies in exchange for millions of dollars in payments. These transactions raise questions about whether the promotion of gambling on campus — especially to those of an age prone to gambling disorders — aligns with the mission of higher education. or not.
More to come
At least $161 billion in bets have been placed since sports betting was widely legalized in the United States. This gambling boom is just the beginning. The betting companies have made it clear that the ultimate goal is to bring so-called iGaming to states across the country where customers can use their mobile phones to play blackjack, poker and style games other casinos.
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