Sep 30, 2024 23:00:00

It is pointed out that the legalization of sports gambling was a 'big mistake' that would have a negative impact on low-income earners and lead to an increase in domestic violence.

In the United States, sports betting has been legalized in many states since the law regulating sports betting in general was deemed unconstitutional in 2018. The legalization of sports betting is expected to have benefits such as curbing illegal gambling and fraud, promoting the tourism and entertainment industries, and increasing tax revenue, but

Charles Lehman , a researcher at the public policy think tank Manhattan Institute , argues that 'legalizing sports betting was a big mistake.'

Legalizing Sports Gambling Was a Huge Mistake - The Atlantic
https://www.theatlantic.com/ideas/archive/2024/09/legal-sports-gambling-was-mistake/679925/

In the United States, sports gambling has been almost completely prohibited since 1992 under the Professional and Amateur Sports Protection Act (PASPA). While individuals could still bet on the outcome of sports events, governments and corporations could not profit from them.

However, in 2012, New Jersey, home to Atlantic City, the largest casino on the East Coast of the United States, decided to legalize sports betting. The National Collegiate Athletic Association filed a lawsuit claiming that this violated PASPA, but New Jersey countered that PASPA itself violated state sovereignty. The lawsuit was brought to the Supreme Court, which ruled in 2018 that 'PASPA violates the Tenth Amendment to the United States Constitution.'

With the repeal of PASPA, states are increasingly deciding to legalize sports betting. According to Goldman Sachs estimates , within a year of the repeal of PASPA, Americans will be betting about $50 million a month, and by the second half of 2023, that figure will exceed $1 billion a month.

As of this writing, sports betting remains illegal in over 10 states, but has been legalized in 38. Because the timing of legalization varies across states, sociologists can compare the effects of sports betting in states that have legalized it with those that have not, and examine changes that occur before and after legalization.

Lehman said several recent papers have identified worrying patterns.

The first, published in July 2024, found that for every dollar a household spends on sports betting, they put $2 less into their investment accounts. The study also found that households are more likely to miss credit card payments or exceed their credit limits, and that the impact is especially strong for households that are already financially unstable.

A second report published in August 2024 found that states where online sports betting is legal have a 25-30% increased risk of household bankruptcy and an increased risk of defaulting on debt payments. This effect is disproportionately felt among men living in counties with lower median incomes, again suggesting that sports betting has a negative impact on the poor.

In addition, a paper published in September 2024 by economists from the University of Oregon revealed an unexpected result: 'Legalization of sports betting increases domestic violence.' Previous studies have shown that a 10% increase in the likelihood of men committing violence against their partners occurs when the NFL 's home team loses in a comeback, but this effect is even greater in states where sports betting is legal.

'The design of the study shows us that these results not only show what sports gambling correlates with, but also what it causes,' said Lehman. While many people may be satisfied with small amounts of entertainment, some may become compulsive and go into debt or bankruptcy, which can lead to domestic violence and depression. It's also a problem that low-income families spend money on sports gambling that could have been used to buy a home, get a degree, or pay off debt.

In addition, legalization of sports betting does not bring significant tax revenue to states, and even if all 38 states that have legalized sports betting are combined, the quarterly tax revenue is only about $500 million (about 70 billion yen) . This is less than the amount of recreational products such as alcohol, tobacco, and marijuana. Furthermore, at least in Massachusetts, illegal gambling sites did not weaken even after sports betting was legalized, so even the objective of 'weakening the illegal market' was not achieved.

As such, there are few benefits to legalizing sports betting and only a large number of negative effects, so Lehman believes that states where sports betting is still illegal, such as Texas and California , should not legalize it. He also argues that even in states that have already legalized it, it is well worth making it illegal again.

'If states are 'laboratories of democracy,' then the results of the experiments on legalizing sports betting have been uniformly negative. It would be better to end the research now than to prolong the suffering,' Lehman said.