Has Sports Betting Changed Professional Athletics Forever?

New York and New Jersey are some of the states who have profited the most from legalized sports gambling. But at what cost to residents, and to the sports they love? Journalist Danny Funt, author of the forthcoming book Everybody Loses: The Tumultuous Rise of American Sports Gambling, speaks about how sports betting has changed the culture of fandom, and altered the experience of professional athletes.

Alison Stewart: This is All Of It from WNYC. I'm Alison Stewart. Our area, New York and New Jersey, are two of the states that profit the most from legalized sports betting, but that gambling income can come at a steep price for sports fans and for professional athletes. In a series of recent anonymous polls conducted by The Athletic, professional athletes shared now that gambling has led to an uptick in online harassment and even death threats from fans who've lost money betting on their performance. Studies have shown that a significant number of young men have started gambling on sporting events, putting that at greater risk for addiction. Sports betting can also ensnare some professional players and gambling scandals, but people seem to like it.

Joining me now to break down how the rise of sports betting has changed professional sports is journalist Danny Funt. He has covered the topic extensively for The Washington Post. He is also the author of the forthcoming book, Everybody Loses: The Tumultuous Rise of American Sports Gambling. It'll be published in January. Danny, welcome to the show.

Danny Funt: Hi, Alison. Thanks for having me.

Alison Stewart: Listeners, we want to hear from you. How has legalized sports gambling changed your experience of being a sports fan? 212-433-9692, 212-433-WNYC. Before any of this legalized betting started, what did sports betting look like?

Danny Funt: It's existed since the origin of American professional sports. Literally, the very first pro baseball games in New York City in the mid-1800s, there were people in the stands, or I guess out in the field somewhere, betting on those games. It's always been around, but it's always existed through the black market, happening under the table, whether someone affiliated with the mob or someone offshore more recently who operates a website that'll take your bets. It's always been something that was done illegally outside of Nevada, of course, where it's been around since the 1950s.

In 1992, Congress stopped some states that wanted to start taking bets, saying, "This is a existential threat to sports. We can't allow it." That all changed in 2018 when the Supreme Court struck down that law, and dozens of states raced to start cashing in.

Alison Stewart: It seems like New Jersey had a vested interest in getting this ban overturned that we were talking about. Why was the state so keen on legalizing sports betting?

Danny Funt: Yes. Chris Christie, the governor of New Jersey at the time, led the charge. He considers it one of his proudest accomplishments in office. The idea at the time was that Atlantic City was really hurting. Several casinos had gone under one that the state had poured tens of millions of dollars into constructing, almost immediately failed. The business interest in Atlantic City and some race tracks across the state saw how sports betting is such a draw to casinos in Las Vegas, even if they end up making more money from traditional casino games.

Sports betting, like all you can eat, buffets and other amenities, is a great way to draw people in, certainly around the Super Bowl and the college basketball tournaments in March, but really all year it's a way to bring people to casinos. Atlantic City said, "How is this fair that Vegas gets this and we don't?" New Jersey sued to overturn that federal law. It was a drawn-out legal battle. They had extremely long odds of succeeding. It was seen as a almost hopeless endeavor to try to overturn that law that had been on the books for 25 years. Yet in 2018, the conservative majority of the court and Elena Kagan, the liberal, said, "This law is unconstitutional." It unconstitutionally commandeers the states to do the federal government's bidding. Practically, days later, New Jersey started taking bets.

Alison Stewart: Part of the argument for legalizing sports betting was to prevent the black market betting, as you'd mentioned. How effective has legalization been in shrinking that black market?

Danny Funt: On that measure, I think it's safe to say it's been a total failure. You're exactly right. Even in the oral arguments before the Supreme Court and briefs submitted to the court, that was a major selling point that, "Hey, billions of dollars are going to criminal operations overseas or illegal bookies in the US who obviously don't pay taxes, don't abide by regulations. If we bring this above board, we can snuff out the black market." It's possible. We don't know exactly how much money is bet illegally, of course, but by all indications, tens of billions of dollars still go to those black market operators.

It's a reasonable question whether, on the one hand, we've put a dent in the black market because it's now so easy to bet legally in 38 states, but it's also inspired a lot of people to take up betting who never would've hunted down a bookie or bet through some sketchy website in the illegal era. Have we pulled people from the black market to the legal market, or have we simply grown the pool of people betting in general? Some of those people, either in states that haven't legalized, will say, "Hey, I'm hearing about betting constantly when I turn on a sports game. Let me check this out."

They might bet through someone illegally, or people start betting legally where it's regulated, and then they say, "There are a variety of perks to betting through illegal bookies, so I'm going to take my business to the black market." Again, on this key reason or justification for legalization, it just hasn't panned out that way. The black market is thriving to this day.

Alison Stewart: This text says, "My husband loves watching various sports and gambling. Small amounts has made it much more fun for me to join him because I have something to root for and am more engaged." For the people who like sports betting, what's their argument?

Danny Funt: There's no question. It's an exhilarating experience. Let's get that straight. It can really turn any game, even any at-bat in a baseball game, any possession in a football game, into the most high-stakes, adrenaline-inducing viewing experience you could imagine, just as long as you put enough money on it. That was the big selling point for the professional sports league, when, behind the scenes, before that Supreme Court decision, gaming companies were appealing to them to change their mind. They had opposed legalization for basically a century, saying it was an existential threat to their sport.

Then they saw some studies that showed that gamblers are obsessive consumers of sports. They watch much more than even passionate traditional fans. They watch until the ends of blowouts, where the winner or loser might've been decided, but there could be plenty of bets that are still active, and you're sweating those bets even toward the end of a otherwise meaningless game. Yes, it's a huge draw. These leagues make most of their money through TV rights deals. When they saw that data, they said, "Geez, this could be a multi-billion-dollar windfall on a yearly basis for us.

If you add up not just the money we make directly from partnerships with sports books and with licensing certain things to them, but indirectly through this rabid fan base we're going to create of gamblers." On that measure, there's no doubt about it. Gamblers are watching all sorts of sports day and night.

Alison Stewart: We're talking about how sports betting has changed professional sports for both fans and players. My guest is Danny Font, journalist and author of the forthcoming book, Everybody Loses: The Tumultuous Rise of American Sports Gambling. Listeners, we want to hear from you, how has legalized sports gambling changed your experience of being a sports fan? Do you play sports bets? What do you think about all the advertising? Do you know someone who has struggled with sports gambling addiction? Give us a call at 212-433-9692, 212-433-WNYC. You can also text us anonymously at that number.

This text says, "I fondly remember during my high school days in the 70s, writing checks payable to cash when I lost to a friend who would then deliver them to an unnamed bookie who I never met." [laughs] What are the demographics of sports betting? What kind of person is most likely to gamble on a sporting event?

Danny Funt: It's overwhelmingly young men. Partly due to some neuroscience and psychological explanations, there's a thrill-seeking that men in that 20 to 45 age range are drawn to. There's also a lot of marketing that very explicitly targets that age group. The gender divide in all different forms of gambling is not so skewed. Plenty of types of gambling, like slots, the lottery, bingo, draws a healthy chunk of women. Sports, on the other hand, at least traditionally, has been overwhelmingly male-driven, perhaps even like a 80/20 split.

Alison Stewart: One of the bets that seems to be advertised regularly is same-game parlay. Would you explain to us how that works?

Danny Funt: Yes. It's become the biggest money maker for these online sports books and it's an important reminder that although as your listener mentioned, people have always been betting on sports, the ways that they can do it when they're betting online from their phones with just a few clicks of a button is truly a whole new ball game. A parlay traditionally stacks a number of bets, two or more. All of them have to be successful for you to be paid, but you get paid a much bigger multiplier than if you're just betting on one thing.

Traditionally, you might go into a sports book on an NFL Sunday and say, "Here are five winners. That's a five-leg parlay." The same-game parlay does the same thing, but for only one game, where you're saying, "I think the Yankees are going to win. I think Aaron Judge is going to hit a home run. I think the opposing team is going to score fewer than three runs."

It gives you all these new things to worry about over the course of the game, and this opportunity to really grow your money dramatically. Some people might say, "Hey, doubling my money is cool, but multiplying it 10x, that's what I'm really after." Of course, the flip side of that is that parlays and especially same-game parlays are much more profitable for the house, which is why in ads and promotions, they're really pushing same-game parlays. If you talk to young people, especially young men, as we were just talking about, the core consumer of gambling, a lot of them only bet parlays and same-game parlays nowadays because they're chasing that big win.

Alison Stewart: Let's talk about advertising. If you're watching sports, you're going to see ads for DraftKings or FanDuel. I was interested, is there any kind of oversight in terms of advertising, especially with so many kids watching?

Danny Funt: The industry would tell you there's very aggressive oversight, and health experts would say there's pathetically little. This is an issue that's regulated at the state level. All 38 states in DC have their own rules for everything related to sports betting, including advertising. Some, of course, mandate that you have to advertise the Problem Gambling hotline in any commercials or online ads, or wherever else you're advertising. Some limit the types of promotions that you can offer, some that are especially misleading. The industry has been forced to rein those in.

Just recently, DraftKings, one of the top operators, was ordered to pay a $3 million refund to Connecticut sports bettors because of a misleading ad. There are some rules around this, but compared to other countries, even Canada, the rules are extremely loose. Almost anything goes. As a result, the industry spent billions of dollars on advertising to this day, marketing is a huge expenditure, to try to bring in new customers and keep them hooked. I saw just today, I think, BetMGM, one of the top operators in the country, announced that Derek Jeter is its new pitchman. You can imagine Jeter doesn't come cheap, and you can imagine a lot of baseball fans take what he has to say seriously. That's a big win for BET MGM. Is it a good idea to have beloved sports figures and celebrities hawking these products? That's much more debatable.

Alison Stewart: Let's talk to Bill, who's calling in from Jersey City. Hey, Bill. Thanks for taking the time to call All Of It.

Bill: Great. Thanks for this great program, both the sports fan and I'm engaged in drug and alcohol prevention. My reason for the call is family and friends no longer enjoy the great play, the throw from third base, the great catching football, a wonderful golf shot, because they need their player or team to win, and they're no longer enjoying the love of the game, the great things that happen that sports can be so joyful, exhilarating. That's what I would argue. That's what we're losing because people are dominated by the need to get a winning ticket or a winning bet.

Alison Stewart: Bill, thank you so much for calling in. He dovetails nicely. I want to talk a little bit about gambling addiction. By the way, the number for gambling addiction is 1877-846-7369, if you have an issue. What do we know about gambling addiction and betting on sports? What would you say the headline is?

Danny Funt: I would say what we know is alarming, and what we don't know might be even more worrisome because this is a profoundly under-researched area. Critics of the industry would say that's by design, that by limiting federal research or just independent research of all sorts, we don't know the full extent of the damage that's being done. We do know that in a place like New Jersey, which again was one of the first states to legalize sports betting and has had a large legal gambling industry for decades, the rate of problem gambling is around 8%, which is triple what was expected across the country.

By making gambling so accessible, clearly, we've raised the rate of people with serious problems. The problem, gambling definition is a sort of a clinical definition, but there are plenty of people who have a problematic relationship with gambling that doesn't necessarily meet those clinical criteria. It's also a progressive disorder. Unlike some drugs you might use once and immediately have a problem, with gambling, that can happen, but it can also take years to develop a really alarming relationship with whatever you're betting on.

When we see young people, especially nowadays who can't stop talking about betting, can't stop finding ways to bet, one wonders what it'll look like in 5 or 10 years when that progressive disorder has blossomed, if you will, and we're finally being forced to take stock with what it means to make this so accessible.

Alison Stewart: Danny, how has this affected professional athletes?

Danny Funt: At the top, you cited that Athletic survey of athletes who-- I think it was three-quarters of them said they've been harassed about something to do with gambling. They cost someone a bet with how they played. I was surprised it's not higher than that. We used to hear about gambling on the periphery. Occasionally, it would crop up. It was not on our radar nearly to the extent it is now in stadiums. People heckling constantly online some truly vile and scary harassment and threats that people get when they cost someone a bet.

I could list just a laundry list of horrific examples of that sort of harassment people in the pros and in college face. It's not just threats. There have been people who've been stalked at their team hotel or at their homes, gamblers who have tracked down people's phone numbers and sent them threats about their kids because of how they played or how they coached a game. Then, on the other side of that coin, one of the biggest arguments for not making this so accessible is basically, every decade since the 1919 Black Sox World Series, there have been gambling scandals where players were bribed into doing something to influence bets.

By making it so accessible, by making so many more things to bet on than ever existed, it's just so much ground to cover and police for these leagues, really a an impossible assignment to prevent every athlete and coach and referee from betting now that you can bet on literally every play of the game. There were two scandals or potential scandals, I should say, just in the last couple of weeks. Everyone who's really on top of that issue says, "It's only a matter of time before something really disastrous happens that makes fans question the integrity of what they're watching."

Alison Stewart: You talked to former governor of Massachusetts, Republican Charlie Baker, who signed the bill legalizing sports betting in that state in 2022, and he seemed to have regrets. What did he tell you?

Danny Funt: That was one of his last acts as governor of Massachusetts. He left that job to lead the NCAA as its president. Once he'd gone around enough schools and talked to athletes and students, he said, this fundamental concept of, it's one thing to have to fly to Las Vegas or meet up with an illegal bookie or bet with crypto or some other sketchy method of payment with an offshore sports book. It's just an entirely new scenario that you can bet so easily now, and that advertising is so relentless. He said, somehow, as basic as it is, he didn't grasp that, and his fellow lawmakers didn't grasp that.

He literally said, "I wish this had stayed in Las Vegas. I regret joining this bandwagon." Quite brave of him, I'd say, to come out and say that. There are other lawmakers across the country who I've spoken with who indicate they feel the same. I think it's pretty likely that we'll see a phase of reregulation where states say, "We let this get out of hand. We need to tighten the guardrails." Because just the looseness of the regulations that we've been talking about today are just too dangerous for players, fans, really everyone connected with sports.

Alison Stewart: We look forward to your forthcoming book, Everybody Loses: The Tumultuous Rise of American Sports Gambling. My guest has been Danny Funt. Danny, thank you so much for sharing your reporting with us.

Danny Funt: My pleasure. Thank you.