The Impact of Legalized Sports Betting in the Casino Industry
In the aftermath of the Supreme Court ruling against PASPA, states and tribal nations can adopt legal sports betting laws that insure consumers and produce tax revenues for local governments.
But science into the impacts of legalised sports betting is only just beginning, and existing evidence points to negative impacts. So far, researchers have found more credit card debt, overdrafts and auto loan delinquency payments as a result of legal sports betting, and more bankruptcy risks and debt collectors.
Legalization.
This explosion of sports bets has created new revenue streams for casinos, but its opponents say it opens new doors to addiction. To curb the negative impact of problem gambling, regulators need to intervene.
States need to make a fine-grained compromise between cost to sports betting operators and profitability. Too many regulations could drive gamblers into obscurity and starve states of crucial tax revenues needed to fund critical services.
Legal sports betting slashes household savings, as found in a recent study by the economist Scott Baker of Northwestern University. When households gambled, and especially in legal sports-gambling states, less went into investment accounts and more into credit card balances than predicted.
Regulatory authority.
Legal sports betting does not only bring valuable tax revenues, but can also boost tourism and economic growth. Lawful betting also allows enthusiasts to watch their sport in a regulated, secure environment; regulators can monitor the sports betting statistics to look for problem gambling activity.
If you see more states and cities exploring legal sports betting, you will want to know how that will impact the economy. Legal sports betting could provide tourist income by driving up the sales of restaurants and hotels; bring jobs into the gambling sector and related areas; support responsible gambling (an important component of gambling industry); and promote responsible spending – the last particularly vital element as gambling drains families of their savings, and increases risk such as draining banks or credit cards.
Revenues Taxes.
Sports betting profits can support states and municipalities by providing school, road, healthcare, local manufacturing jobs and boost state and local tax revenue.
It comes at a cost, however, when sports betting is legalized. According to two recent research, gamblers consume more entertainment costs and even transfer cash from household sources of income like investment accounts.
They exploit credit card data from the Northwestern economist Scott Baker and his co-authors to show that sports betting raises credit card debt, overdrafts, bankruptcy and delinquencies among young likely low-income male customers – especially those who might have been targeted for cannibalisation in gambling markets – with a focus on young men who live in low-income neighbourhoods. Their article makes a big contribution to the cannibalisation literature in suggesting that advertising on sports gambling might diminish this effect.
Enforcement.
Illegal sports betting requires very strong legislation, a legislation that balances between competition and consumer protection while being flexible enough to adapt to technological change and market trends. An outdated regulatory regime has potentially negative implications for sports bet markets.
Sport betting online has generated a boom in calls to state gambling addiction hotlines. A flurry of advertising and technology that lets fans bet instantly also added to suspicions of problem gambling.
To meet these demands, licenced operators have cooperated with regulators and sports leagues to impose responsible marketing policies and pay rehabilitation costs for addicts. Sadly, self-regulation will not be enough without strong regulatory supervision.
Innovation.
Legalized sports betting has unleashed an innovation bonanza that makes life easier for consumers and creates more opportunity for gamblers. Further, these developments led to increased dedication towards player protection from licensed operators with advanced tools and systems designed for the benefit of players.
Sport betting isn’t booming without risk. Two recent papers reveal the ways that legal gambling exacerbates credit card debt, overdrafts, loan defaults, household violence and potential sources of illegal sports bets. Reduce such harms and safeguard consumers, robustly regulated markets must have good regulation and supports mechanisms, fair taxes to prevent betting flowing to the wild and sustainable business models in cooperation with key stakeholders to survive and thrive.
