Published: October 22, 2022

America should consider Europe’s experience with sports gambling before going all in

Though some form of sports betting is now legal in nearly three dozen states, the biggest prize of all — California — has eluded the industry. That may change in this November’s elections, though, as industry advocates and opponents wage a $300 million political battle over whether to bring legalized sports betting to the Golden State, where the annual betting pool could reach $3 billion, say supporters. That would cap a remarkable, and troubling, rise in legalized sports gambling in the U.S. since just 2018, when the Supreme Court knocked down a federal law prohibiting the activity in all but a few grandfathered locations.

Even as the industry heads toward the $80-billion-a-year betting mark in the U.S., however, the U.K., which has had forms of sports betting for decades, is taking a pause. A British government commission is about to recommend strict new limits on gaming and on the marketing of it, amid a significant rise in compulsive gambling, especially among the young.

The contrast between the U.S. and the U.K. is striking.

Californians will get to vote this November on two competing gaming initiatives. Proposition 27, the expansive one, would authorize the state’s Indian tribes to partner with gaming companies to create online betting platforms for state residents, including through mobile apps.

ports-gaming companies, including FanDuel, DraftKings, and BetMGM, have funded the initiative with massive donations. Advocates have tried to stoke support by touting a 10% tax on betting revenues that would fund housing and social services. Thus, the initiative appears on the ballot as the “Legalize Sports Betting and Revenue for Homelessness Prevention Fund Initiative.” In rare bipartisanship, top Republican and Democratic legislative leaders in the state oppose Prop. 27.

These issues are never simple in California; so naturally, the ballot includes a competing initiative, Proposition 26, which would legalize sports betting only onsite at Indian casinos and racetracks—likely creating a betting market estimated at one-tenth the size of an online gaming environment. This “retail” betting initiative has won support from Indian tribes wary of a gambling takeover in the state by national players backing Prop. 27. Foes include an odd mix of supporters of Prop. 27 and groups that reject any expansion of legalized gaming.

As Californians prepare to vote, sports- gaming advocates as well as critics are awaiting a government report on recommendations to reform gambling in the United Kingdom. Since 2019, a government commission has been reviewing the U.K.’s gaming laws in light of the data. Recommendations are due this fall; already, some ideas have leaked. Among the most significant would be a ban on sports-betting company partnerships with soccer teams, including in England’s Premier League, whose games are broadcast globally.

Some reports suggest that the league’s teams have voluntarily agreed to forsake this advertising to ward off stricter government measures. Additionally, the commission is considering imposing strict caps on individual wagers, setting monthly betting limits, and initiating so-called financial-well-being audits of gamblers who lose a certain amount online, to ensure that they don’t sink deeply into debt. Regulators may also ban or limit so-called betting clubs or preferred betting programs that reward frequent players. Similar measures have already been instituted in other countries, such as Germany, with a resulting sharp downtick in betting. 

Driving these recommendations are troubling outcomes in the U.K. A 2010 survey estimated that the number of problem gamblers in England had more than doubled in just a few years and that as many as a third of those with problems bet principally online. Another study found that as many as one-third of U.K. kids with mobile phones had sports-betting apps on them.

© Public Gaming Research Institute. All rights reserved.