Opinion: Can US Sports Betting Industry Fix What It Is Breaking?

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Flash back just a few years: it is 2017 and the idea that the federal government would have anything to do with sports betting seemed like a long shot, despite Adam Silver‘s hopes.

Today, I do not see Congress taking any quick action on US sports betting (or anything for that matter.) But the possibility of Congress stepping up to the plate and pinch-hitting for some of the lackluster regulating and self-policing going on is significantly higher than it was when Sen. Orrin Hatch floated his much-panned bill before he left the Senate.

Despite the bill’s criticism, it truly was not all bad. In recent weeks, there have been several threads on Twitter and thoughtful pieces in various outlets that highlighted concerns throughout the industry. Prior to the fall of the Professional and Amateur Protection Act, I was in the group arguing for legalization as a means of:

Not going super well, huh?

The regulated market needs to do better.

My hopes that the regulated market would mean that vulnerable sports bettors would be in a system that would provide protection and help them has proven largely unfounded. Instead, we now have a system which is seemingly creating a lot of new sports bettors while underfunding protection systems to provide people who are having issues with help.

We have now seen Washington D.C. appear to cut the small amount of funding directed to problem gambling. I never thought it would need to be said, yet here we are: it does not do much good to provide a requirement that people have a phone number if they have problems with gambling if we are not paying anyone to be on the other end of the line at these services.

Sports betting needs consistent attention

Despite it being common sense that some portion of sports betting revenue should go to problem gambling resources, there is not enough being done. Sports betting is not a “pass it and forget it” type of industry; it needs monitoring. States have by and large failed to do that.

I have not had a conversation with anyone who thinks there is adequate funding for problem gambling. Sports betting companies are not without responsibility here too; while states have failed in mandating the necessary allotments, the major companies are failing to take proactive steps themselves.

The market is not competitive

The sports betting market has very quickly become uncompetitive for many sportsbooks. There are effectively two companies that have the vast majority of market share and another handful with a small piece of the pie, and everyone else competing for even the smallest of slivers. That is not good for the health of the industry.

Are 51% tax rates good for pulling bettors away from the unregulated market? No. Are they good for the market participants? Probably not. But the argument that those rates should come down while sports betting CEOs take six-figure Super Bowl trips is unlikely.

If the market continues to consolidate, not only are bettors going to start to get more price sensitive, but the scrutiny on the industry is going to increase.

Get serious about protecting athletes

The seemingly endless abuse of athletes on social media needs to be dealt with.

Sports betting Twitter can be a really awful place. Many people including myself have taken hiatuses because of the people in the space. The abuse of athletes from people who lose bets (and this is both a legal gambling and unregulated gambling problem, I know) is unacceptable.

Everyone dunked on Darren Rovell for creating the legend around Parlay Patz, who turned out to have sent threatening messages to numerous athletes, which is something that has become increasingly common. The freedom to abuse strangers appears to be increasingly common.

Sports betting regulators better become more willing to do something about it, or it will continue to happen. And eventually, something horrible could take place. Bad behavior that does not get checked will continue to push the boundaries.

Any hope for US sports betting?

There is a pretty significant problem with ignoring warning signs in contemporary society. The regulated sports betting industry is putting off a lot of them right now.

The industry, like many, is reactive instead of proactive. But if the industry is going to survive in its current iteration, it would be well-served to begin thinking and acting with common sense.

The industry needs to get out ahead of issues and head them off before they turn into disasters. The clock is ticking.