Summary
- Recent studies suggest that the widespread legalization of gambling may have led to a rise in irresponsible gambling behavior.
- Low-income problem gamblers may feel the impact of the measure more acutely.
- Land-based casinos have not been affected by the legalization of mobile gambling.
Research conducted by the University of Maryland, the SMU Cox School of Business, and the UC San Diego Rady School of Management has identified a new connection between the legalization of sports gambling in the United States and an increase in irresponsible gambling behavior.
Gambling legalization is also tied to increased spending, higher levels of harm study says
Associate Professor of Marketing at UMD Smith, Daniel McCarthy, along with his co-authors Wayne J. Taylor from Southern Methodist University and Kenneth C. Wilbur from the University of California, San Diego, have investigated the effects following the Supreme Court's repeal of the Professional and Amateur Sports Protection Act of 2018, which had effectively banned sports betting on a federal level. Although legalization generates substantial fiscal benefits, it also increases the number of individuals betting beyond their financial limits. Policymakers should carefully weigh the added tax revenue against the associated social costs and consider implementing safeguards like income-based betting limits, stated McCarthy. The repeal of the law has empowered each state and the District of Columbia to independently decide whether to endorse sports betting. Consequently, over 40 jurisdictions have legalized sports gambling, leading to an increase in irresponsible gambling, according to the study's authors. The authors analyzed the behavior of over 700,000 gamblers across 11 states. Their findings show a significant 369% rise in spending and a 372% increase in what they classify as irresponsible gambling. The study also highlights some positive impacts of legalized gambling, such as an increase in tax contributions, which has been calculated at $0.78 per capita. These findings support and expand upon concerns previously raised by other researchers.
Physical casinos remain unscathed by mobile betting introduction
People with lower incomes are more adversely affected by gambling-related harm compared to their wealthier counterparts. Interestingly, research shows that the operation of physical casinos hasn't been negatively impacted by the widespread legalization of sports gambling, including mobile betting—a result that many had feared. While this study is unlikely to sway states that are resistant to adopting mobile sports betting, it contributes to the growing body of evidence suggesting that these concerns may be unfounded.
