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Americans bet $220B on sports in 5 years since legalization

AP PHOTO Customers at the Ocean Casino Resort in Atlantic City N.J. in 2018, await the kickoff of the first NFL season after a US Supreme Court ruling clearing the way for legal sports betting. Americans have bet over $220 billion on sports with legal gambling outlets in the five years since that ruling.

THE Associated Press

ATLANTIC CITY, N.J. — Americans have bet over $220 billion on sports with legal gambling outlets in the five years since the U.S. Supreme Court cleared the way for all 50 states to offer it, and the industry shows few signs of slowing despite some recent scandals that have put a spotlight on wagering safeguards.

When Sunday’s anniversary of the court ruling in a case brought by New Jersey arrives, two-thirds of the country will offer legal sports betting, with additional states likely to join in coming months or years.

The fast-growing industry is also far-reaching: its advertisements reach into most U.S. homes during sporting events and even non-sports programming. Few TV viewers have been spared from repeated ads featuring a Caesar character discussing sports gambling with members of the Manning football dynasty, or from actor Jamie Foxx placing sports bets in between takes on a film set.

“While the milestones of legalized sports betting that have led up to now are remarkable, this industry is excitingly still far from being fully realized,” said Jason Robins, CEO of DraftKings, one of the industry’s two dominant companies. “Legal betting is already part of mainstream sports culture, and I anticipate this trend will grow as adoption increases. The accessibility right now for fans to place a live, micro-bet during a game, for example, shares parallels with other smartphone-powered capabilities like hailing a ride, buying a stock, or playing a podcast.”

On May 14, 2018, the Supreme Court decided a case that had begun 10 years earlier in New Jersey as the longest of long shots: a bid to overturn a federal law, the Professional and Amateur Sports Protection Act, that restricted sports betting to just four states that met a 1991 deadline to legalize it.

Since then, some once-unthinkable changes have happened: Professional sports leagues, which fought New Jersey tooth and nail right up to the Supreme Court in an ultimately unsuccessful effort to prevent legal betting, now partner with gambling companies, slather their ballparks with sports betting advertising and some even have betting outlets in their stadiums. Betting odds are now an integral part of broadcasts of many games.

Legalization of sports betting has opened up opportunities: additional tax revenue for states, a small auxiliary revenue stream for casinos and horse tracks, and a way to keep many people away from the dangers of unregulated offshore gambling web sites.

It’s also caused problems: Those treating compulsive gambling say calls to their hotlines seeking help have increased significantly in the five years since sports betting was legalized and made available on cell phones. Keith Whyte, executive director of the National Council on Problem Gambling, says calls to the 800-GAMBLER help line have increased by 15% over the last five years as “states began the fastest and largest expansion of gambling in our history.”

Several NFL players have been suspended for betting on games, and some colleges that struck partnerships with sports leagues illegally marketed sports betting to students under the legal age of 21, prompting leagues and gambling companies to revise their policies.

Gambling integrity was in the news again last week when Ohio, Pennsylvania and New Jersey regulators ordered their sports books to stop taking bets on the University of Alabama baseball team after suspicious activity was identified in an Alabama-Louisiana State University game on April 28. Alabama baseball coach Brad Bohannon was fired amid an investigation that began when one of the numerous companies monitoring sports betting data and other activities found what it considered suspicious activity and tipped off gambling regulators. No criminal charges have been filed.

The $220 billion figure includes wagers made through the end of March in most states, according to the American Gaming Association, the gambling industry’s national trade group. It is up from the $125 billion that had been wagered at the four-year mark.

Consider this: Sports books generally keep about 10% of all the money they handle, after paying out winning bets to customers.

Achieving profitability has been a long, hard slog. FanDuel became the first to report a profitable quarter in the second leg of 2022 and expects to be profitable for 2023. DraftKings expects its first profitable quarter at the end of this year, and BetMGM expects to enter the black in the second half of this year.

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