Navigating the Ethical Maze of Sports Betting Expansion

Jamie's Gaming Industry Observations

Oct 12, 2023

In recent years, there has been a monumental shift in the landscape of sports betting in the United States. As DraftKings CEO, Jason Robins, highlighted during a recent G2E conference, the initial phase of US sports betting was centered around capturing the illegal market. Now, we find ourselves transitioning into a new era, an era focused on drawing in individuals who previously had little to no interest in this activity.

This shift, while lucrative for businesses offering sports betting, opens up a Pandora’s box of ethical and societal challenges.

The initial objective of ‘capturing offshore business’ was relatively straightforward. The targets were already interested in sports betting but were utilizing platforms that were, by legal standards, off the grid. The introduction of legalized betting platforms offered these enthusiasts a legal alternative. However, the next phase, ‘creating new gamblers’, is where the waters begin to muddy.

It’s important to pause here to highlight the complexity of gambling expansion efforts. On one hand, it’s a natural progression for businesses to seek the expansion of their customer base; it’s the fundamental principle upon which capitalism is built. On the other hand, this expansion carries the high potential of becoming problematic for society.

The shift in objectives from converting existing gamblers to creating new ones is significant. This isn’t just a business expansion; it’s a cultural and societal shift. Put simply, it’s where the waters really begin to get muddy.

One notable change that occurs is the increase in liability for operators. In phase one, operators could more easily explain away losses. These bets were coming from individuals who would have otherwise lost their wagers on offshore platforms. “Eh, dad bet games for decades, so don’t blame us for his losses now,” is a sentiment that would be fairly widely understood, without massive pushback. While unfortunate for the individual, society would now be benefiting from increased protections and new tax revenue, so all was not lost.

However, the dynamics change dramatically when companies actively seek to create new gamblers. When companies introduce enticing offers and deploy sophisticated tactics to both attract and retain new customers, the blame for losses becomes a shared burden. The level of ownership for these losses increases dramatically, and operators now find themselves facing new levels of accountability.

As we venture into this next phase, the risks for operators increase exponentially. The ethical considerations become magnified, especially when the introduction to sports betting becomes as easy as a click of a button. The transition from illegal betting to legalized platforms was already complex, but introducing new individuals to this world is an entirely different ball game.

And then there is the upcoming phase pointed out by @halfkelly that many suspect is right around the corner…iCasino.

This is a shift that carries its own set of ethical and societal challenges, along with more challenging narratives for the gaming industry to tackle than are/were present during the sports betting expansion.

In conclusion, the expansion of sports betting in the US is a double-edged sword. While it presents opportunities for economic growth and the expansion of legal betting options, it also opens up a myriad of ethical and societal challenges.

As we transition from capturing the illegal market to creating new gamblers, the onus is on operators, regulators, advocates, and society to navigate this intricate maze with caution.

No one gets a free pass in ensuring that the expansion does not come at the expense of ethical and societal well-being.

Jamie combined his professional background as a brand strategist with his experience as a former problem gambler to create dyve. He is also host of The After Gambling Podcast.

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