BRN: The impact of sports betting, revenue and addiction (12:41)

Transcript:

Jeffrey Snyder: This morning on BRN, sports betting has yielded considerable revenue for states, but what’s the impact on addiction? Joining me now to help break it all down is Dr. Michelle Malkin of East Carolina University. Michelle, great to see you again.

Thanks for joining us in the program this morning.

Michelle Malkin: It’s great to be here. Thanks for having me back.

Snyder: And since you’re in an academic setting at a prominent university, tonight is the NCAA men’s championship game. And I thought we would talk about sports betting, not betting that you and I will do, but the betting in general that goes on during March Madness. And by all accounts, Michelle, I think I read somewhere $3 billion will be bet online, or I could be wrong on that number, but it’s still a significant amount of money that’s changing hands.

Malkin: Yeah. And I think there’s a lot of losses out there because when you have the four first-seeded teams all making it to the final, it means that all the favorites that were probably not being bet on because everybody wanted the long shots and to make more money, those didn’t win. And so people lost a lot of money this season for sure.

But there’s a lot of money exchanging hands, a lot of people able to do it very healthy within their own limitations. And some people probably are suffering from some substantial losses.

Snyder: Yeah. So they’re suffering from substantial launches. And we’re going to talk about addiction in a few minutes, but, and you’re right, I think, and I’m not a basketball guy.

I wrestled in high school because I’m short statured, but they’re all number ones, as you said. So probably, you know, if you’re going to bet, you don’t bet on the number one, you bet on the number one to lose. But my understanding in, well, let me take a step back and ask, since we last spoke, and I think it’s been since probably January when we last had you on the program, how has the expansion of sports betting gone across the United States?

I think it was in 30 or some odd states. Has it been taken up by other legislatures and other states indulging in sports betting?

Malkin: There are several states looking at more expansion. We’re still at about 38 states that have legalized. There’s still a lot of issues going on and even in courtrooms and things like that to figure things out.

But for the most part, about two thirds of our country can bet legally in their state, usually from the palm of their hand. And even if they can’t, they’re accessing it through offshore illegal ways. So pretty much anybody in the is able to.

Snyder: So why wouldn’t a state, I’m thinking about the revenue implications, three billion dollars changes hands or more, it’s probably going to be more by the time the final is over. And that’s just the NCAA men’s, there’s going to be sports betting on NBA, on NHL, Major League Baseball just started. So why, what would the hang up be for a state when they look and say, all that money’s changing hands, I want a bit of that tax revenue?

Malkin: Yeah, I just want to put out that we also see growing demand of people sports betting on the NCAA women’s and on the women’s sports as well. So I just want to say it’s not just the men’s, even though we’re seeing the more substantial wagers put down for that. But states have to kind of decide.

They have the state revenue side of things, which always looks good. But depending on the state you’re in, they have the idea of protecting the consumer. And some states just feel either ethically, morally, or because they don’t feel like there’s enough protection out there that gambling is not right.

So, for example, the state of Utah and the state of Hawaii don’t yet have most legalized forms of gambling. I say most because there is fantasy sports in Utah, but there’s no legalized gambling right now in Hawaii, but Hawaii is actually considering it. So even the states that have traditionally not allowed for most forms of gambling or claim to only have something like the lottery are now looking at least at it.

We see bills being introduced, but it all depends on if it’s going to be a priority for that state. And part of the priority comes from, are they having shortfalls from other funding sources? Is this money going to help?

And most states say yes. What they don’t necessarily consider is what are the costs going to be on the state and how much are they going to put from that revenue back into the community to ensure that people can gamble in a healthy way and the resources are there for those who can’t.

Snyder: And, you know, let’s talk a little bit about the addiction side. Let’s talk a lot about it, though, because I think you bring up a good point, a very good point, obviously. I mean, it’s a balancing act.

You’ve got a pension. If you have a state pension for public sector workers, as an example, it might be underfunded. You might want revenue to do that.

You might want revenue, for example, to fix roads that are not federal roads. But let’s talk about the addiction side, because as more and more people get involved with this, look, I’ve seen the ads for Candy Crush, never play the game. That looks pretty addictive.

Gambling, sports gambling has got to be addictive as well.

Malkin: Well, yeah. And actually you brought up Candy Crush. Social games are actually one of the emerging forms of gambling or addiction type behavior that we’re seeing in mobile apps.

People are putting thousands of dollars into these social apps that have gambling-like behavior to them, even though all it does is stay in the game. You’re never going to get anything back from it. But when we talk about sports wagering and addiction, what we have learned up to now, I mean, a lot of the research is still very young, is that it’s the type of gambling that can lead to gambling-related harms faster.

And the faster that it can lead to gambling-related harms, the more likely somebody can go down the pathway towards gambling disorder, which is the medical term for gambling addiction. And that is because people don’t know what it looks like to experience a gambling-related harm. And therefore they don’t know if they themselves or somebody they care about has that.

If you have a gambling problem, call 1-800-GAMBLER. What does it mean to have a gambling problem? They don’t know.

We haven’t done the outreach. We haven’t done the education. And so people experience multiple types of gambling-related harms.

Is it the first time they gamble more than they can afford to lose? Is it when they have a relationship issue because they’re paying too much attention to the game or their phone? All these things are types of gambling-related harms that people don’t know to recognize.

Snyder: And Michelle, you talk about education. I just recall watching the NFL pregame. Like most sports now, they have a gambling segment.

But this gambling segment is always led by some type of, I don’t know, disclaimer or some type of education. That to me always felt like tongue-in-cheek, like talking out of both sides of your mouth maybe is the way I would phrase it. Hey, before you do this, think about this.

But that’s probably not enough education for somebody. They’re going to be like, OK, well, fine. But I’m going to bet on Derrick Henry of the Baltimore Ravens running for 200 yards.

It’s a sure thing, right?

Malkin: I have the inside info, right? The reality is that gambling is always a risk. And people need to look at it as a form of entertainment that they would put the same money they can afford to lose by going out to dinner or going to a movie theater towards what they’re wagering on.

And when they lose, they have to be OK with that loss because that was part of the risk. Unfortunately, people don’t see gambling funds as the same as their other entertainment funds. They see it as a way to gain more money and to get out of whatever financial stuff that they’re in.

And so there is just this overarching belief that, you know, it’s going to be my turn. I’m going to be lucky and I’m going to win. And so people will chase that dream.

And the worst thing is, is if they win really early, especially some of these long shot bets, maybe somebody had something that was like a huge win. Now they think I can do it again. And so they chase it.

And so they lose everything they just won by trying to chase back that great feeling. But actually what they’re doing is going down a really dangerous pathway because our brains are actually impacted by that. Our reward center, our neurotransmitters.

And we can’t reconfigure all that on our own. We need to actually get help for that.

Snyder: No different, Michelle, than if you go to a casino and pull the slot machine, although you probably don’t, they probably don’t have the.

Malkin: No, they just touch a button.

Snyder: You just touch a button. It’s probably easier now.

Malkin: But it’s actually the same technology. So a lot of psychology went into how to make the best experience for the slot machine player so that they will stay. So how often does it have to win?

What does a win have to look like? How much, what percentage, what does it, what colors does it have? What, what tune does it do?

What active is it in? Like all of that was done. And then they turned around and made that same technology, all that same stuff into these sports, mobile apps, and also the social games, as you mentioned before.

And so that’s what keeps you engaged an opportunity to totally zone out while also trying to win a lot. So you have both the potential for that big win, that excitement, but you also have this opportunity to just keep betting every second and constantly be looking and saying, did I have that bet? Did I not have that bet?

In when it comes to the mobile apps, individuals are constantly just checking and checking and checking. And sometimes they have bets on so many different games. So they’re just so into their phone.

They’re not even watching the game they used to love.

Snyder: And Michelle, last question. How do we know, like the slot machine, I would think the slot machine is favored in the house favor. They’re the ones that manage it.

They’re the ones that program it. Likewise, the sports app, how do we know that that is fairly adjudicated in terms of the odds and the rewarding of if you win? I mean, there’s a lot of questions that I have.

I mean, would that be a concern?

Malkin: Well, the legal apps that we have that the state authorizes, those industry partners are upheld to very high standards. But they do do things that they’re allowed to do, like betting boosts and parlays and things that are kind of really, really difficult to win. And that’s where they make their edge.

They’re not making their edge on, you know, a plus minus 110 kind of bet. They’re making their edge on the people going for the long shots. And they’re getting people to do that by giving them free money to play with, which is not free money.

It’s only free money if you win. But to keep somebody engaged. And the more you play, the more bonuses and things like that you will get.

So keeping you engaged, giving you these opportunities for a big win that if you get one, keeps you totally into that app or that activity for a much longer period of time.

Snyder: Yeah, it almost sounds very analogous to the social media craze, too. You know, just keep pulling down, you get the next TikTok. Michelle, we’re going to have to leave it there.

I don’t know if you’ll be tuning into the basketball game. I know I will not. I’ll be sleeping.

But I guess we’ll have to pick up the conversation next month to see the end result. And sure, we’ll have baseball and other things to talk about as well. Great to see you.

Enjoy the rest of your day. And we look forward to having you back on the program again very soon.

Malkin: Sounds good. Thank you so much.

Snyder: And don’t forget to subscribe to our daily newsletter, The Warning Pulse, for all the news in one place. Details, of course, at our website. And your subscription helps support all this great BRN content.

And don’t forget, we’re back again tomorrow for another edition of BRN. Until then, I’m Jeff Snyder. Stay safe, keep on saving, and don’t forget, roll with the changes.