The Summer Olympics, live from Paris, are underway. What’s new this time? Not just the addition of breakdancing (also known as breakdancing)) as an official event. For the first time, Americans in most states can invest their hard-earned money to bet on who will win and lose and by how much in global events like sport climbing, vaulting, gymnastics, 3×3 basketball and the rest of the competition. Is this a breakthrough?
Mobile sports betting was legalized in New York State in January 2022 and has since seen nearly $45 billion in total“generating” $4 billion in revenue and paying just over $2 billion in taxes into the state coffers. But all that money comes from somewhere—meaning that if it wasn’t being thrown into good and bad bets, it would be sitting in savings accounts, buying food, paying credit card bills, funding other forms of entertainment, etc.
Most of the other forms of spending we’ve just mentioned offer real value for money. Gambling offers nothing but the chronically elusive promise of big profits, which too often overshadow the reality of big losses. A small percentage of problem gamblerswho can now place bets with the tap of a smartphone app, suffer the vast majority of these losses – and all the psychological and interpersonal consequences that come with them.
This brings us to a new search of three California academics. They find that in the 38 states that have legalized sports betting since a 2018 Supreme Court decision that opened the floodgates, credit ratings have decreased “modestly but statistically significantly.” There has also been an increase of about 28% in bankruptcies and an 8% increase in debts transferred to debt collection agencies.
In the words of one co-author: “In conclusion, we find ample evidence that legal sports betting, and in particular mobile/online access to betting, has led to a significant increase in problematic debt activities and a deterioration in consumers’ financial health.”
Yet, in this very context, and despite Increasing number of calls to state hotline for gambling problemsthe legislature in budget negotiations this year rejected a proposal to allocate an additional 1% of sports betting revenue to help those struggling with gambling compulsions. State Sen. Joe Addabbo later said passed his wise proposal in the Senatebut he has not yet been adopted by the committee to the Assembly.
The state constitution clearly prohibits all forms of gambling except the lottery and seven specifically authorized casinos. The Legislature first made a mockery of this constitutional language by allowing daily fantasy sports, which it rationalized as a “game of skill.” Then it further insulted the intelligence of New Yorkers by allowing sports betting, which is supposed to be allowed only on-site at casinos, to take place anywhere by pretending that bets placed by smartphone are placed “in” the casinos because the computer servers are located there.
The major expansion of gambling in New York has occurred largely under the watch of Governor Andrew Cuomo. We should take to heart the words of his father Mariowho said, “There is a respectable body of economic thought that argues that casino gambling is actually economically regressive for a state and a community,” and that bringing more gambling to a state “doesn’t generate wealth, it just redistributes it.”
He redistributes it from drug addicts to state coffers.
