CHAMPAIGN, Ill. — The recent U.S. Supreme Court decision that effectively paves the way for legalized sports gambling in states will likely have multiple destabilizing socio-economic effects that will reverberate for decades to come, said a University of Illinois expert who is a leading national gambling critic.
According to John W. Kindt, a professor emeritus of business administration at Illinois, the decision in Murphy v. NCAA will likely usher in a lightly regulated “Wild West”-era of sports gambling in which anything goes.
“If you combine legal sports gambling and smartphones, you are looking at an economic disaster on multiple fronts,” said Kindt, who has testified before Congress and state legislatures about the societal, business and economic impacts of decriminalizing gambling. “Virtually every piece of academic research says this is a bad idea, for any number of reasons. But the big ones are the effect on the economy and the creation of more addicted gamblers at a younger age.”
Kindt said prior research indicates that there are “$3 to $7 in taxpayer costs for every $1 in tax revenues from casinos” – and that sports gambling and internet gambling carry even higher socio-economic costs.
For college students and teens, sports gambling in real-time on smartphones and computers is as addictive as “crack cocaine,” Kindt said.
“Betting on sports in a casino is addictive enough, but when you put it in the hands of someone who is a sports fan and has a smartphone, now you’re really opening Pandora’s box,” he said. “If you combine gambling, sports and smartphones, you’re leading sports fans down a very dangerous path to financial ruin.”
In anticipation of the Supreme Court overturning the 1992 Professional and Amateur Sports Protection Act – a law aimed at protecting the integrity of U.S. sports, sponsored by former N.J. Senator Bill Bradley, an ex-professional basketball player – lobbyists have been encouraging state legislatures to legalize sports gambling and “daily fantasy sports.” Daily fantasy sports is a semilegal form of season-long fantasy sports leagues that’s been promoted as a source of new revenue for state coffers without having to inflict the pain of higher taxes on citizens.
“For example, the Illinois state senate committee on gaming held a hearing on the Murphy case on April 3, and Virginia, Ohio and other states have already passed legislation authorizing different types of daily fantasy sports,” Kindt said. “They’re already ramping up their efforts to get sports gambling up and running as soon as possible, now that states can supposedly legalize it. And gambling lobbyists are able to put the screws to legislators by saying that if one state doesn’t want gambling, fine, they’ll just open up shop next door and all sorts of revenue will leak across state lines.”
From a sports integrity perspective, it’s especially disheartening, Kindt said.
“If anything, we should be pushing professional sports more in the direction of protecting the integrity of each sport, not toward gambling,” Kindt said. “Professional and amateur sports leagues need to recognize that legalized sports gambling will put both the lives and the livelihoods of their athletes at risk. And it’s not only an issue of protecting the integrity of the sport itself, but also of protecting future fans of the sport. Professional sports crosses generational lines and virtually every demographic out there, and sports gambling is particularly seductive to young people, who are more apt to take risks.”
By ignoring the practical socio-economic impacts of the Murphy case, the U.S. Supreme Court has dictated that Congress must take “immediate remedial and regulatory actions,” Kindt said.
“The U.S. National Gambling Impact Study Commission enacted by Congress in 1999 concluded that it was a national imperative to maintain gambling bans on sports and amateur athletics,” he said. “The commission also made blanket recommendations that internet gambling remain totally banned under federal law. The younger generation – that is, the generation that doesn’t know a world without smartphones and the internet – is showing nearly double the gambling addiction rate of the next-oldest generation. And certain demographic groups within that youth cohort are showing even higher rates of gambling addiction, which ought to be alarming to everyone – lawmakers, policymakers, the general public and parents alike.”
Kindt is the senior editor of the book “The Gambling Threat to Economies and Financial Systems: Internet Gambling.”