Front Burner - Sports betting: Golden age, or epidemic?

Episode Date: February 7, 2025

The Super Bowl is North America's biggest sports event, and sports betting's biggest weekend. U.S. legal sportsbooks are expected to generate over a billion dollars in bets as the Philadelphia Eagles take on the Kansas City Chiefs. Sports betting has exploded in the seven years since it was effectively legalized. Now, the industry has taken over, inundating fans with advertisements and partnering with star athletes, sports media companies and the leagues themselves.On today's show, we speak with Danny Funt, a Washington Post contributor and the author of Everybody Loses, to chart the real winners and losers in the rise of sports betting.For transcripts of Front Burner, please visit: https://www.cbc.ca/radio/frontburner/transcripts

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Hi, I'm Jonathan Mobutze, in for Jamie Poisson. So, the Super Bowl is on Sunday and today we're talking about the absolute explosion of sports betting with Danny Fundt, contributor to the Washington Post and author of the new book called Everybody Loses. And Danny, I gotta be honest, I had no idea of some of the stuff you can bet on. So like obviously you can bet on who's going to win the Super Bowl, Kansas City Chiefs or the Philadelphia Eagles with the Chiefs right now favored to three-peat. What are some of the other things you can you can bet on? Can bet on basically every aspect of the game and also stuff beyond the game like how long is John Bateese's rendition of the Star Spangled Banner gonna last? Will it be over under two minutes? What color Gatorade will be dumped on the winning head coach? What

song Kendrick Lamar will open the halftime show with? You wouldn't believe how obscure some of this stuff gets. It's basically every possible thing you're watching on TV they want to turn into a betting opportunity. Alright Danny, let's figure out how we got here. You know, the recent poll came out showing that nearly half of people watching the big game in Ontario will also be betting on an outcome. Paint a picture for us if you can. Like, how does the NFL's biggest night illustrate just how much sports betting has grown over the last few years?

You know, I used to find it interesting when I was talking to people like this to say, this is going to be the most money ever wagered legally on a Superball in history. And now it's sort of a truism that every Superball is going to be the most money ever bet on a Superball just because this keeps growing and growing year after year since in the U S 2018 and in Canada 2021. So this year, the gambling trade group, the American Gaming Association estimates

that $1.4 billion will be wagered legally on the Super Bowl in the US. The illegal betting, you know, is a whole other story. You could definitely tack on a couple more billion to that. But yeah, it's a whole other story. You could definitely tack on a couple more billion to that. But yeah, it's so extraordinary how quickly things have changed. This game is going to be played in New Orleans, where the Super Bowl was in 2013. So just barely a decade ago, the NFL was so adamantly anti-gambling that it prohibited any of its employees from even stepping foot

into a casino in Louisiana if they were there for the Super Bowl. Now the stadium where the game is played has been rebranded Caesar's Superdome, literally the name of a gambling company. So that just shows you how night and day the Super Bowl is and really the entire sports landscape ever since this explosion of legal betting. And so that that explosion happens after this Supreme Court decision in 2018. The high court ruled six to three that states could not be forced to regulate sports betting

at the same time they were barred from legalizing it. Nevada was the only state that could offer a full slate of sports wagering options under the 1992 federal ban. How quickly did the industry build out following that decision? A matter of weeks, but really behind the scenes, they had been laying the groundwork for years to be prepared.

If that decision went in their favor, they could burst out through the floodgates as quickly as possible, just because there was so much enthusiasm and also so much unknown that potentially you could take advantage of if you're trying to influence how laws are going to be written. So immediately New Jersey, which brought that case, started taking bets at first at casinos and racetracks and then quickly online as well. Several other states had passed laws that said if the Supreme Court rules this way, we'll immediately

legalize it. So Delaware, West Virginia, Pennsylvania, quickly behind New Jersey. Then a whole host of other states. There's this ripple effect that happens when a state or a province sees its neighbor has legalized bed Betting, they see all the money that they're bringing in through taxes and say, gee, we're really missing out if we don't get on board as well. So there's still a few big states, California and Texas, most notably that have yet to legalize, but there's other ways you can effectively bet on sports

without doing it in these traditional legal avenues. So basically wherever you are in the US or Canada, you can risk money on football and a lot of other sports in one way or another. ["The New York Times"] For those of us who are not bettors, could you kind of just explain how it works? What kinds of bets are being placed?

It's not just the outcome of the game. Not at all. You know, traditionally for decades, that was the lion's share of revenue was betting simply who's going to win the game or who's going to cover the spread, which is a certain number of points that bookmakers spot the underdog to make the matchup seem even. But now there's just this explosion of games within the game to carve up sports in every possible way you could think of to create limitless betting opportunities.

So in the Super Bowl, for example, some sportsbooks offer about 10,000 different things you could bet on. Well, the Super Bowl used to be exceptional in being this hub for obsessive gambling. And now that's really true. 24-7-365. I hear my gambling friends or my friends who gamble, they talk about parlays. Where does that fit in to all that action? It's a huge part of the business. More than half of revenue now for these biggest operators

like Fandual and DraftKings comes from parlays. Essentially what a parlay is, is you stack multiple bets together for the chance at winning much more money than if you bet on a single outcome, or if you bet on all of them individually. The catch is that each component of your parlay has to hit. So if you do a six leg parlay on six different facets of the game or multiple games, but

sticking with the Super Bowl, six different things within the Super Bowl matchup, if one of them misses, the bet misses. But you can understand why for a lot of people if I bet a parlay let's say $10 to win $100 that's a lot more exciting than betting $10 to win $19 if you just bet on one thing. Now the catch of course if it's a lot more exciting there's always another side to that coin. Sportsbooks profit a lot more from parlay betting. So they've created this very exciting lottery-like game with parlays, but their revenue percentage is much, much higher through parlays

than through traditional types of betting, like who's gonna win or lose. I'm curious about the growth of sports gambling and how it's kind of gone hand in hand with the growth of smartphones. It strikes me there's a compounding effect when we are already so addicted to our phones and then these betting apps put basically like an extra rush of dopamine in red at our fingertips. How did technology contribute to this dramatic change that we've seen over the last several years? Yeah, that connection you just pointed out really can't be understated.

Why the business was able to explode to the point it has where in the US we're approaching half a trillion dollars wagered legally since that Supreme Court decision. A huge amount of that is done on the internet and a lot of that obviously done on smartphones. So more than 90% of money in the US is bet online. You can imagine if it's hard enough to look away from your phone when you're watching a game, now you have this ultra addictive product that's so integrated on your phone. It's so seamless in the ways that you can deposit money with one tap or one swipe and bet with just a couple more taps. It's as user friendly as possible. There's also now a lot of ways to bet on things during games.

So it used to be that you'd place your bet and then you'd bite your fingernails while you're watching the game. Now they want you to bet and bet and bet throughout the game. That's a huge growth area within the gambling business, especially when we think about young people, which are in many ways the target demographic.

Men 18 to 34, so many young people, which are in many ways the target demographic. Men 18 to 34, so many young people have a hard time putting down their phones and you can imagine why for them gambling is really irresistible nowadays. Like you've been mentioning, these sport book apps are big business. Just looking at Penn Entertainment, for example, this company started with racetracks, expanded to casinos, bought and sold Barstool Sports, and now runs ESPN, BAT, and Canadian sports betting firm The Score. And that's like just one example.

Can you describe what the integration looks like between sportsbooks and the wider entertainment industry? It's been a huge part of why this has exploded so quickly and I think why gambling has been so normalized recently. You know it's not ancient history when sports media wouldn't touch gambling. It was taboo to even reference the odds during a broadcast. You know Al Michaels the football announcer famously had ways of sort of winking at, oh, you know, that last second field goal is going to cost someone. And that's going to end the game. And you know why I'm laughing, don't you? Yeah, of

course you do. There are some people happy, some not so happy. I can't believe what just happened to me. To me. For me. We hear it, folks. But you were totally forbidden from referencing gambling because the leagues that partnered with these media organizations really didn't want their fans gambling and didn't want to promote gambling. So if you've got deals with leagues, you didn't want to offend those relationships. But even beyond that, it was just generally something that was done under the table, through black market bookmakers, not something that was how the mainstream consumes sports. Now, we would have a much easier time listing the sports or outlets that don't partner with gambling operators versus those that do.

It's become such a huge part of how these companies make money, especially considering that a lot of them are really struggling. Media in general is facing tough times. Sports media in particular has seen huge layoffs in recent years. So you could imagine it's hard to sort of stick to some sort of moral principle of we're not going to get in bed with gambling operators or we're not going to encourage our audience to take up gambling. It's hard to have that kind of backbone when you're desperately trying to stay afloat. So billions and billions of dollars have flooded media.

And as a result, not only is it impossible to escape gambling ads when you're watching a game but if you're listening to your favorite podcast, reading your favorite magazine, listening to your favorite radio program, you're gonna be inundated with these ads. Right and there's like at the same time there's this non mainstream media marketing blitz I'm thinking in particular of the company Stake, which Drake has promoted on his Instagram account with this weird sort of motivational video that links his wealth to never giving up on gambling. I rarely celebrate anything just for anyone watching this that's wondering how this happened.

It's being so unsure how you're getting it done that you just kind of keep going in the hopes of figuring out the formula. What's significant about the demographic that's being targeted here? You know, for a while, I was reluctant to compare what's happening with sports betting to what happened in the last century with tobacco and the way that that industry preyed on people and used exploitative marketing.

And I think that if you were to make that argument, the strongest example is those sorts of deals with celebrities, with TV shows, with media organizations. If you look at TV in the 1940s and 50s, so many programs were brought to you by cigarette companies. And the effect was it seemed normal. It seemed harmless. It seemed like something that young people could do without much risk. We know that the damage that that caused. And it's hard not to see that parallel with sports betting where you've got LeBron James promoting DraftKings. I'm loving this live betting on DraftKings.

So many options during the game, it feels like I'm calling the plays. You've got A-list actors like Kevin Hart and Jamie Foxx promoting other companies. At Betim Gym, everyone gets a welcome offer. So whether you're courtside trying to hit the over or up here trying to hit the under. So whether you're courtside trying to hit the over or up here trying to hit the under. Drake so enthusiastically, I'd say conspicuously enthusiastically promoting steak. All we need is 17 here. We're doing good. Nice and easy.

17. Oh my god! Wait, 539? No way. So the way that all of these influential people are trying to make this seem normal, harmless, and wholesome, I do think has a dramatic cultural impact. And when regulators and lawmakers look at what could be done to rein this in, I think that sort of advertising will definitely be in their crosshairs in the near future. Auschwitz, not long ago, not far away, features more than 500 original objects, first-hand

accounts and survivor testimonies that tell the powerful story of the Auschwitz concentration camp, its history and legacy, and the underlying conditions that allowed the Holocaust to happen. On now exclusively at ROM. Tickets at rom.ca. What does a mummified Egyptian child, the Parthenon marbles of Greece, and an Irish Tickets at rom.ca. gotten artifacts, made it the far away institutions. Spoiler, it was probably the British. Don't miss a brand new season of Stuff the British Style. Watch it free on CBC Jam. You've mentioned how the big leagues have changed their tune about sports betting. But, you know, at the same time, players have been suspended, kicked out of leagues, even

criminally prosecuted in some cases for forbedding illegally. I'm thinking of Miami Heat point guard Terry Rozier. Suspicious gambling activity surrounding guard Terry Rozier in a game nearly two years ago is now being investigated by federal prosecutors as a part of the same... Former Raptors player, Jaunte Porter, he was banned for life. A league investigation revealed Porter tipped off bettors about confidential information and limited his play for betting purposes. The NBA also says Porter made thousands of dollars betting on at least 13 NBA games,

including a bet on a record. How can these leagues punish players for gambling when they themselves are so invested, like literally invested in the gambling industry. Yeah, you know, to some extent, I don't think it's quite as hypocritical as it can seem. You know, they might have deals with beer companies, but you wouldn't want players, you know, playing inebriated. So at the same time, so often when players like the ones you mentioned or Calvin Ridley in the NFL, a star up-and-coming receiver who was suspended for a year when he was caught gambling. The league reports he gambled on

games over a five-day stretch last November. At the time Ridley was on the non-football injury list dealing with mental health issues so he wasn't playing. The NFL so often when they're explaining what was going through their heads to make what seems like such a dumb and short-sighted decision, they say, well, I saw ads constantly in our games. I saw ads in our stadiums. I saw the ways that our league is promoting this to our fans. And it just didn't seem like such a big deal if I bet myself. So some of that confusion is inevitable when you've got the leagues being the biggest backers for gambling. It's also interesting that the commissioners of the leagues argued that not only was legalization not a threat to corrupt their sports, but they actually argued that it would make the

sports safer from corruption because by bringing it above board you could monitor the gambling more easily than if it's happening through illegal operators. To some extent that's valid. To some extent I think it's quite fishy to say let's create this massive temptation for our players but it'll be easier to catch them because of it. At the same time there's still plenty of illegal betting happening, so you've got people who hear about betting through all these ads, but then they do it nefariously through illegal channels. So the leagues have created this enormous headache, to put it mildly, for themselves. I want to talk a bit about how betting has altered the behavior of fans. NBA players from Clippers veteran PJ Tucker.

It's getting outrageous. It's getting kind of crazy. Even in the arenas, fans yelling at the guys about their bets, it's unreal. To Pacers point guard Tyrese Halliburton, have talked about the increase in fans sitting courtside at games, yelling at players on the court or sending them DMs about how they've cost them money. I mean, that's what, I mean, if I were to look at my mentions right now, I'm sure the majority of them are about me looking up somebody's parlay

I mean the front more likely, you know, if I have a good game It's just like yeah, you're supposed to if you have bad games like what I'm a parlay. It's like I'm sorry And you've reported on hecklers on the golf course at the US Open of all places How has sports betting change how we how we the spect, watch sports? Yeah, I found that so striking. I was at Pinehurst this past year for the US Open Golf Tournament. I was following the leader and eventual champion, Bryson DeChambeau. You'd think Pinehurst, this iconic golf course, the US Open, one of the most iconic events in the sport, is going to be the height of decorum and discretion among the fans.

And yet Bryson is about to tee off and someone yells, hey Bryson, I bet on you to score over a certain number today. Basically, I bet on you to fail. Derek trying to get in his head, trying to screw him up. Some people argue that, as I said earlier, this has really always been happening. We've just legalized it to install consumer protections, to generate tax revenue from it. But we're not actually growing the amount of gambling that's happening.

I don't think it betrays my neutrality as a reporter to say, I think that's nonsense. Just because of the examples you gave, the players say, this is so stark. Sure, I used to occasionally hear about fans betting on me. Now it's all I hear about. Not only will I'm playing and I hear hecklers in the stands. When I go back to the team hotel, there have been instances of disgruntled gamblers stalking players, threatening them, literally saying, hey, you cost me money, you owe me, finding them at their homes, certainly harassing them incessantly on social media

with some extraordinarily brutal harassment. Also, when we talk about the harassment and the threats college athletes face, that's a whole different story, and you can imagine how unpleasant that can get. So this is really, again, a night and day difference from just six or seven years ago when this was largely illegal. This is one of the biggest consequences that the leagues have had to own up to. And is

this really the trade-off that we're willing to make? Is something that they're still trying to convince not just the fans but their own employees that it's worth it in the long run. You know, we were just talking about these ads for sports gaming apps and sports gaming websites and how they paint a picture of wealth that can be supposedly attainable from gambling. But is this the reality? Like you've reported that some US sports book operators actually restrict winning customers. How are they doing that?

Right. So to your point, it's overwhelmingly difficult to make money on betting on sports in the long term. Less than one in a hundred sports bettors is going to be profitable over the long haul. And yet, because it seems like sports is something where you can outsmart the bookmaker, you can't outsmart a slot machine, you can't outsmart a roulette wheel. But a lot of sports fans think they know better than everyone else, at least about their favorite sport or their favorite team. So they think, aha, if I put in enough effort, if I look at, you know, my phone day and night to find the best odds, I can outfox these odd makers and make money. It's brutally difficult, even for people who try to do this professionally.

It's an extremely tough way to make money. That being said, even if you are talented and disciplined and rigorous enough to make money in the long haul, almost immediately these sportsbooks will identify that and refuse your business. Sometimes they can't literally say, we're not going to take your bet, but they can limit how much you can wager. So I've seen bettors who aren't allowed to bet more than literally a penny on certain games because they've been identified as a winning better. Some states are looking at whether that's something they

want to regulate, but for now, that's totally within the right of these sportsbooks and they're ruthless in the way that they cut down anyone who's not going to be long-term profitable for them. Now, I know that one of the main arguments for legalization in the first place was just how much money it could bring in for governments via tax revenue. So has that windfall materialized? Matthew 20.10 Some places, yes. Some places, definitely no. On the whole, I think voters would be surprised to see how puny that money is compared to the big picture. So this money, yeah, it's more politically convenient than raising income taxes or raising corporate tax rates, but it's pretty trivial in the big picture.

If you look at a state like Colorado, their annual budget is $40 billion. And in the five or so years that sports betting has been legal, that's generated about $100 dollars for the state. So let's say $20 million a year. $20 million for a state that has 40 billion in expenses annually, not a significant amount of money. And you also have to look at all of the consequences that come with it beyond, you know, if people are losing money betting on sports, are they spending as much with other businesses?

Is their credit as healthy as it would otherwise be? Are their savings as responsible as it otherwise would be? Are there health consequences? I'm putting this hypothetically, but the answer is yes. There are health consequences that come with more expansive gambling. Sometimes the state has to shoulder those burdens.

So I think we ought to look holistically and see sure we've generated $7.5 billion in tax revenue, but on the whole, are we making as much as we're losing by unleashing sports betting to this extent? Yeah. I mean, let's talk about those trade-offs for a second. Like you mentioned some of the social effects. There's been reported that online sports betting increases the odds of household bankruptcy by 25 to 30 percent. It also increases debt delinquency and several studies have linked sports betting to a number of social and public health issues, including intimate partner violence. How deep do these problems go? We're really in the early innings of grasping the scope of the consequence of making gambling this mainstream. But you only have to look to other countries that have had illegal online gambling for a lot longer than the US and Canada

to foreshadow where we might be heading. So I think the UK is a pretty useful analogy. Brits lose about five and a half billion pounds every year gambling online. One study found that reduces economic activity annually by 1.3 billion pounds. The British government has found that gambling related health harms cost the country at least a billion pounds annually and likely much more than that So again, yes, they're generating tax revenue just like the US and Canada are generating tax revenue But they're beginning to see the bigger picture and how the weights and measures

Can be a lot more skewed than? It seems on paper. So, Danny, where does the industry go from here? Is there any prospect to your mind that adding guardrails is something we can expect to see in the near future? Yes, absolutely. And even still, you know, I don't think there are many states or places that are going to say we legalized it, it was a mistake, we're now going to outlaw it.

But I also think that that is reductive and really misses the point that there's this huge middle ground of regulations and consumer protections within legalizing something and banning it. Other countries that have had legal gambling for longer, whether that's in Europe or Australia or Latin America, are sort of re-regulating and realizing we let this rip without enough protections we need to rein this in. Whether that's banning advertising during games or during certain hours when kids are more likely to be watching TV or listening to the radio Restricting certain deceptive advertising techniques like calling something risk-free

When there is risk involved or calling something a bonus even if you have to pay to get that bonus limiting The ability to deposit money through credit cards, which obviously allows people to run up debts and bet over their heads. Those sorts of reforms are being kicked around in Congress and in other legislative bodies. And I do think it's only a matter of time

before some of that re-regulation is implemented in the US and Canada. Danny Funt, thanks so much for your eye opening reporting on this and thanks for coming on the show. Danny Funt My pleasure. Thank you for having me. Pete Slauson Frontburner was produced this week by Ali Jaynes, Kieran Oudtshorn, Lauren Donnelly, Cecilia Armstrong, Mackenzie Cameron, and Matt Omaha.

Music is by Joseph Shabason. Our senior producer is Elaine Chao. Our executive producer is Nick McCabe-Lokos. Jamie's back on Monday. I'm Jonathan Mobutze. Thanks so much for listening. For more CBC podcasts, go to cbc.ca slash podcasts.