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WSJ: ‘Responsible Gambling’ Campaigns Always Fail. That’s the Point.

Sportsbooks and casinos have made betting more enticing than ever, showing why the industry shouldn’t be trusted to regulate itself.


By Isaac Rose-Berman

April 12, 2024 9:30 am ET


In 2007, Terrance Watanabe went on one of the largest gambling binges in Las Vegas history. Unsurprisingly, the house ended up winning. In a year, the heir to a party-favor import business lost nearly $127 million.


Casinos loved Watanabe because he bet big, and badly. A 2009 profile in The Wall Street Journal noted how he preferred games with worse odds, and even when he played blackjack—which is less profitable for the house—he “made such bad decisions” that the odds became heavily skewed in the casino’s favor.


Few can afford to lose as much as Watanabe, but as legalized gambling spreads, Americans are betting more—and losing more. Last year, bettors in the U.S. wagered over $120 billion on legal sportsbooks like DraftKings and FanDuel, up 27.5% from 2022, according to the American Gaming Association (AGA), the gambling industry’s main lobbying group. The profits of these companies, meanwhile, increased by 44.5% to $11 billion, suggesting that gamblers are risking more money on bets with worse odds.


That isn’t accidental. As legal sports betting has expanded, operators—aided by athlete and celebrity spokesmen like Rob Gronkowski for FanDuel and Jamie Foxx for MGM—have promoted risky wagers like parlays and same-game-parlays, which combine multiple bets from a single game. These bets have a much higher “hold rate”—the share of money wagered that the house keeps. Today’s wagers often have hold rates of 30% or more, 15 times that of blackjack.


In response to criticisms of these and other practices, seven of the largest betting operators in the U.S. announced last month the formation of a trade association to combat problem gambling. The Responsible Online Gaming Association (ROGA) plans to spend millions on consumer education, developing a database of problem gamblers and certifying programs to promote responsible gambling.


The National Council on Problem Gambling estimates that 2.5 million American adults meet the criteria for a severe gambling problem each year, although many believe that number doesn’t fully account for the increase in online gambling. A severe gambling problem requires exhibiting four or more dangerous behaviors as outlined by the American Psychiatric Association, including irritability when trying to cut down gambling and lying to hide gambling activity.


But it’s unlikely that the new group will make a difference. To promote responsible gambling, today’s betting operators rely on tools such as time and deposit limits, which gamblers can use at their own discretion. If a user sets a deposit limit of $100 a month, once they deposit $100 to gamble, the app won’t let them deposit any more until the next month. The same holds for time spent gambling.


In theory, this makes sense. Gamblers know how much they can afford to lose, or how much time they should devote to gambling. But in practice, it doesn’t work. According to Lia Nower, director of the Center for Gambling Studies at Rutgers University, among the fastest-growing cohort of sports bettors—ages 21 to 24—less than 1% use responsible gambling tools.


Casinos like to draw a bright line between problem gamblers and everyone else, suggesting that only a small number of customers bet and lose more than they can handle. Cait DeBaun, vice president of responsibility at the AGA, told me, “Something that is lost in this conversation about responsible gambling is that the vast majority of people who engage in our product do so for fun…Most people are putting a couple bucks on a bet, whether that is Caitlin Clark shooting a certain number of 3s or Travis Kelce catching the winning touchdown.”


But the line between those who gamble for fun and a small core of problem gamblers isn’t so clear. A January 2024 poll by the Siena College Research Institute found nearly 40% of online sports bettors have felt ashamed after losing or have bet more than they should. More than half have “chased” losses—increased their bet size to try to get even—which is one of the nine dangerous behaviors outlined by the American Psychiatric Association.


The bigger the gambler, the more likely casinos are to ignore signs of problem gaming. In 2020, U.K. regulators fined Caesars £13 million for “systematic failings in its treatment of VIPs,” including allowing a customer to gamble who they knew had put himself on a list intended to ban him from online gambling apps and land-based casinos. He went on to lose £240,000. The company also allowed a self-employed nanny to lose £18,000 in a year, after she told them she “spent her savings and was borrowing from family and using her overdraft to gamble.”


After the fine, Caesars U.K. said they were “confident of the efficacy of our compliance initiatives going forward.”


Gambling needs to be seen as a social and policy problem, not just a personal one. This starts with less deceptive ads. Last year, the AGA updated their responsible marketing code for sports wagering to fend off additional government oversight, suggesting that companies avoid using such terms as “risk free” or advertising on college campuses. Those are good rules, but they don’t go far enough, and the gaming industry shouldn’t be trusted to regulate itself.


Casinos should be forced to provide disclosures about how low the odds of winning really are. The U.S. should follow the U.K. by banning gaming ads that feature athletes and celebrities and similarly increase the size of fines. British regulators regularly impose multimillion-dollar penalties on betting companies; here they rarely reach six figures.

Public education campaigns are another crucial element. Responsible gambling means that bettors should have a basic understanding of how odds work, know how to calculate the house edge and be well versed in tracking past wagers and results.


Finally, research can help to identify the best ways to prevent gambling problems and encourage responsible play. It can also determine the most effective treatments for the millions of Americans with gambling disorders, the vast majority of whom never seek help. The federal government devotes billions to drug and alcohol research but currently spends nothing on treatment and research for problem gambling, leaving it to states and the industry.


Online gambling isn’t the first addictive product to hit the market, and it won’t be the last. Casinos today are following the same playbook as tobacco and alcohol companies decades ago: profit from Americans’ vices, insist on self-regulation, advocate personal responsibility and fend off oversight by supporting and pressuring politicians.


Eventually, as with alcohol and cigarettes, the evidence of harm will become overwhelming, and policymakers will reign in the industry’s most predatory practices. Future generations will look at today’s gambling ads the same way we look at old cigarette ads, where paid doctors preached the benefits of smoking, and wonder how they were ever allowed. But we’re not there yet.


Isaac Rose-Berman is a sports bettor and writer. His work on the gambling industry can be found at howgamblingworks.com.

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