LOS ANGELES — Asher first joined a Gamblers Anonymous meeting in 2022, where the attendance was around a dozen people. Now, that number has surged to as many as 60, with many new members struggling with online sports betting addictions.
Asher, who requested anonymity to safeguard his privacy, was initially drawn into gambling through online poker. “Opening these gambling accounts online is incredibly easy,” he told Context/the Thomson Reuters Foundation. “At one point, I lost over $500,000 to this addiction and nearly lost my family.”
Dr. Timothy Fong, co-director of UCLA’s Gambling Studies Program, noted a shift in the profile of those seeking help. Previously, clinics were overwhelmed with older individuals who had lost their savings at casinos or were addicted to slot machines. Today, however, young men are increasingly seeking help for addictions related to online gambling, risky crypto and stock trading, and online sports betting.
“Everything has changed,” Dr. Fong said. “We are only in the early stages of this gambling crisis. We don’t yet know if it could reach the severity of the opioid crisis.”
The U.S. Supreme Court’s landmark decision in 2018, which struck down the nationwide ban on sports betting, has drastically reshaped the gambling landscape. Since then, 38 states and the District of Columbia have legalized sports betting, generating over $11 billion in revenue last year, according to the American Gaming Association.
This influx of revenue is particularly appealing to state and city officials grappling with post-pandemic economic challenges, noted Richard C. Auxier, principal policy associate at the Urban-Brookings Tax Policy Center. “Politicians often claim that this will fund schools and eliminate the need for property tax increases,” he said. However, Auxier cautions that while states benefit from taxing gambling revenue, this income is derived from the losses of gamblers. “It’s not free money; it’s essentially coming from residents, potentially including those struggling with addiction,” he added.
Joe Maloney, senior vice president of the American Gaming Association, pointed to state-level studies indicating that “problem gambling” rates have remained relatively low, even in jurisdictions that have recently legalized online gaming. “Responsible play is crucial for sustainable growth,” Maloney emphasized.
He also highlighted that a well-regulated and legal gambling industry is best equipped to address addiction issues. “The industry has no interest in fostering problem gamblers,” Maloney concluded.
According to a February report from the Census Bureau, sports betting revenue for state governments exceeded $505 million in the third quarter of last year, marking a 20% increase compared to the same period the previous year.
The tax rates on sports betting vary widely, with some states like New York and Rhode Island imposing rates as high as 51%.
In recent years, gambling revenue has contributed roughly 1% to state and local budgets, a figure that Auxier describes as substantial.
However, Kamolika Das, local policy director at the Institute on Taxation and Economic Policy, points out that such “sin taxes”—which also include taxes on alcohol and cigarettes—come with a “twisted incentive” for local officials. While these taxes are intended partly to discourage consumption, this reduction in usage can ultimately lead to weaker long-term revenue growth.
Das explains that while gambling revenue can provide a short-term solution for budgetary gaps, it is not a sustainable long-term strategy for funding.
Experts suggest that the legalization of online sports betting can lead to a significant increase in gambling addiction. For instance, last year in Florida, the launch of an online sports betting app resulted in a doubling of calls to the state’s gambling addiction helpline.
Keith Whyte, executive director of the National Council on Problem Gambling, noted that many individuals reaching out for help have gambling debts exceeding twice their annual income. The National Council operates a national helpline that experienced a near doubling of calls and texts from 2020 to 2023.
However, gaming industry executive Maloney cautions that the rise in helpline calls may not directly reflect actual gambling addiction rates, as it could also be attributed to increased awareness of the helpline.
Safeguards and treatment
In Massachusetts, a long-standing nonprofit focused on gambling issues has seen its work significantly impacted by the rise of online gambling apps. Marlene D. Warner, CEO of the Massachusetts Council on Gaming and Health, highlighted concerns over the ease of access to gambling apps, which eliminate the need for physical visits and increase privacy. The council, which receives state support, has traditionally offered on-site assistance at casinos but is now also providing online chat services. Warner emphasized the need for improved measures to prevent minors from accessing these apps.
While Massachusetts has been praised for its strong funding of support services, there are still gaps in coverage. Last year, states allocated nearly $100 million for addressing gambling problems, primarily funded by industry taxes, according to the American Gaming Association. However, eight states do not provide publicly funded services for gambling addiction, as noted by Keith Whyte of the National Council on Problem Gambling. He pointed out that limited treatment options, such as just six sessions, are often insufficient.
The National Council advocates for setting aside 2% of gambling revenue for treatment programs, estimating that gambling’s societal cost in the U.S. reaches up to $10 billion annually, including health and incarceration expenses. Additionally, the council calls for 39 safety standards for online gambling, including deposit limits, tools to block apps, and direct links to addiction help.
In response, the gambling industry has introduced its own standards for responsible advertising and user protection, such as targeting ads at those over 21 and providing clear information about betting risks. Major operators have also implemented features that allow users to set betting limits and exclude themselves from apps while offering information on seeking help for addiction.
Policymakers are increasingly aware of these risks. In July, state legislators convened in Pittsburgh to develop new legislation on internet gaming, which is expected to be released this month.
There is also optimism that the rise of online gambling could lead to new safeguards. Warner noted that online platforms offer unique opportunities for responsible gambling practices, such as setting limits on wins, losses, or time spent. AI tools could further enhance these safeguards by assessing a person’s risk before it becomes problematic. “If we can use AI or human intervention to address issues early, that’s a significant step forward,” Warner said.