Why The Sports Betting Epidemic is Far Worse Than You Think

Sports gambling is today the most popular form of entertainment in America, and that didn't happen by accident. Have you noticed that football just feels different now? The NFL has always been a production, a little theatrical, but now gambling has brought the spectacle to a whole new level. What does the Super Bowl really mean to DraftKings? A lot of companies, they say, you know, this is our Super Bowl, and they're talking about something else. But when we say this is our Super Bowl, we're literally talking about the Super Bowl.

We get weird interruptions in the games, reminders that FanDuel and DraftKings are official partners of the league. LeBron James and Sidney Sweeney use their assets to promote polymarkets. It's ruining everything we love about sports. That pure joy of just rooting for my favorite team is tainted, knowing that millions of dollars are being made and lost. on every pass, injury, and call. Last year, Americans legally wagered $166.9 billion on sports. Add in illegal or unregulated gambling to that. Well, one study estimated Americans wager $673.6 billion annually.

Gambling ads are everywhere, and everyone's doing it. 23% of young men gamble In fact, 10% of Gen Z men are considered full-on addicts. And the thing is, we know it's hurting us. 34% of people who placed a sports bet in the past year still say legal sports betting is bad for society, up from 23% in 2022. 8 in 10 Americans say gambling addiction is as serious or more serious than alcohol or drug addiction. If even the gamblers think gambling is bad, how is it the fastest-growing entertainment industry in America?

Did we all just freely decide one day that sportsbooks make the Super Bowl better? What is really going on behind all the flashy ads and big wins? And can sports ever recover? Until just eight years ago, even in-person sports betting was illegal in the United States, with a very few exceptions, including Las Vegas. Today, 39 states have some form of legal sports betting. You can just open up an app while sitting on your couch, and you can bet in multiple ways.

Now, I'm not a gambling expert, so I needed to spell out for myself what we're talking about when we say America has become a nation of gamblers. There are basically two different models of online sports gambling right now, and while they look almost identical on your phone, what's happening behind the screen is very different.

First, you have the traditional sports books, FanDuel, DraftKings, BetMGM, SportsBet. With these platforms, you bet against the house. So, say the Patriots are playing the Seahawks. FanDuel sets the odds, you put down $100, and FanDuel takes the other side of that transaction. Sportsbooks use odds and enormous amounts of data to make sure the system favors them over thousands and millions of wagers. Individual players do win, but the business only works because, collectively, customers lose more than they win. The house's revenue is losses.

Now, meet the second model, prediction markets like Kalshi. Here, theoretically, you're not betting against Kalshi. You're betting against another trader. Imagine a contract asking, will the Patriots beat the Seahawks? A yes contract might cost 60 cents, and a no contract, 40 cents. Together, they're worth a dollar. If the Seahawks win, yes settles at one dollar, and no at zero. Kalshi facilitates the trade and collects fees. It doesn't really care about the game. It profits off of the bet itself. These are legally structured as federally regulated event contracts, rather than ordinary state-regulated sportsbook bets.

But increasingly, sports are all people are predicting. In 2026, Kalshi's general counsel reported that sports accounted for nearly 70% of trading volume. Whether you're betting against the house or another gambler like yourself, the same question appears on your phone. Patriots or Seahawks? The nationwide sports betting boom began with a fight led by New Jersey. In 2011, 64% of New Jersey voters legalized sports wagering, and Republican Governor Chris Christie signed it into law, happily. The NCAA, NFL, NBA, NHL, and MLB all sued.

They said sports betting threatened the integrity of American sports. And that bans ensured a high level of trust between fans and players. NFL Commissioner Roger Goodell gave deposition testimony warning that, quote, If gambling is permitted freely on sporting events, normal incidents of the game, such as bad snaps, dropped passes, turnovers, penalties, and play calling, inevitably will fuel speculation, distrust, and accusation of point-shaping or game-fixing. After losing repeatedly in lower courts to the big leagues, New Jersey reframed the whole fight as a states' rights issue.

Congress, Governor Christie argued, had no right to force the states to maintain their own gambling bans. The case reached the Supreme Court, and in May 2018, the justices ruled that every state could decide for itself whether to legalize sports betting or not. Once legalized, Nothing held back this new and enhanced vice economy. The sportsbooks lobby was ready in the wings, with an army of former regulators and politicians to legalize sports betting in all 50 states. Draft Kings, FanDuel, and the broader gambling industry poured millions into lobbying and political contributions, while spending hundreds of millions more on ballot campaigns.

The 2022 California sports betting fight alone ...cost the competing gambling interests more than $400 million, and they won. And, in a spectacular halftime adjustment, the sports leagues themselves turned into the sportsbook's greatest allies. Roger Goodell's NFL announced its first-ever partnership with DraftKings and FanDuel, as well as Caesars Entertainment, its own special casino sponsor. The announcement came across as euphoric and visionary. Goodell promised an enhanced fan experience. The way fans consume sports years from now will look drastically different, crowed DraftKings CEO Jason Robbins, and he was right.

For the first time, sportsbook commercials could run during NFL games, and now it's everywhere, all the time. DraftKings' national TV spending in the first eight months of 2021 DraftKings' national TV spending in the first eight months of 2021 Shot up 98% year over year. More than 75% of its TV impressions came from games and sports highlight programming. The people warning us about gambling became the people selling us gambling. The NFL alone estimates it has earned $1 billion in revenue since trading jerseys with the sportsbooks.

Sportsbooks, after payouts and other expenses like lobbying and marketing, still take home about $17 billion annually. Compare that with almost $9 billion in movie box office revenue, or $11.5 billion in recorded music, and $5.8 billion in top concert tours. The money is flowing, but who's paying for it? One major study looked at hundreds of thousands of online gamblers across multiple states. Fewer than 5% of bettors withdrew more money from their app than they deposited over roughly five years. In other words, more than 95% were net losers by that measure.

Now, these aren't all major losses. Most Gen Z and millennials fall into the category of casual gamblers or event bettors. They make frequent smaller bets that add up over time. According to the reports, approximately 60 to 80% of bettors withdraw more money from their app than they deposited 80% of Sportsbook's profits are generated by just 3% of the worst bettors. Those online betting platforms intentionally design their products and services to hook their VIPs, or the heavy bettors. To keep the coffers full, they need those guys to keep losing.

And it's mostly guys. Young men between ages of 18 and 35 are the most likely to chase their losses. And fall into an addiction spiral, also known as guaranteed revenue for a sportsbook. So, these companies deliberately court the losers. They give them tickets to games, concert, free alcohol, parties, all to keep them gambling until there's nothing left.

Sportsbooks are coming under intense scrutiny as lawsuits alleging predatory customer grooming have emerged. Terry Thompson is suing FanDuel, DraftKings, the NFL, and VIP Life. For manipulating him into losing roughly $1.83 million and almost his life. According to the complaint, his VIP treatment included a $500 bottle of champagne, Super Bowl tickets, and hotel accommodations. After one particularly bad losing streak, his fan-duel host actually called to suggest that he take a break for the holidays. But a month later, she contacted him about an emergency, which turned out to be a gift package for Super Bowl 57 in Arizona.

She then commissioned a personalized video for Thompson from Philly star Bryce Harper, who later said he did not know it was being used as a gambling company reward. Hey, Terry, what's up, brother? Hey, man, your host, Brittany from FanDuel, wanted to make sure your Thanksgiving was extra special. My dude. Another case centers on the man known as M. Dallow, 1990, but it's being brought by his estranged wife. She sued DraftKings after discovering that his wagering exploded from about $174,000 in 2020 to more than $6 million in 2023.

The lawsuit says he deposited 300% of his annual salary in 2022. And more than 440% in 2023. Rather than losing VIP status as his loss is mounted, the perks allegedly continued. See my video about credit card debt. Thompson's and M. Dallow 1990s losses are the house's cash cow. But the truth is, DraftKings and FanDuel and company probably don't need to court lawsuits in cases like this. They don't need to pay for their biggest losers to visit the casinos or when the internet and legalization put the casinos directly in the losers' pockets.

Before legalized sports gambling, guys like Thompson would have to drive to Las Vegas, walk into a casino, open a sportsbook, and make the wager. You had to actually be present at horse tracks and greyhound tracks, most of which were on the seedier side of town. It was considered shameful to be seen placing bets. But not anymore. Just like that twinge of shame that lecherous teenage boys had to endure to buy Playboy magazines from actual clerks in physical stores, the social and physical barriers to becoming a gambling addict evaporated with the smartphone.

Online betting now dominates the industry. In 2024, more than 95% of American sports betting was wagered online. And that's exactly where the sportsbooks want us to be gambling. 63% of online bettors bet more than twice a year, versus only 30% of in-person-only bettors. Online bettors were also significantly more likely to bet monthly, weekly, or daily. And the financial effects of legalized gambling, online betting, and the subsequent addiction epidemic are only the tip of the iceberg. Bankruptcy skyrockets, savings decline. And self-loathing ensues.

66% of daily gamblers, compared to 42% of men as a whole, report feeling like a failure. Even if you can keep it a secret all the way to bankruptcy, there is a deep personal shame when it comes to gambling addiction. As with drugs and pornography, it's correlated with financial failure, domestic violence, and self-harm. Respondents who gamble many times a day or almost constantly are more likely, 34% versus 24% of those who gamble less often or never, to feel lonely all or most of the time.

And problem gamblers are eight and a half times more likely to die by suicide. It's bad for the bottom 3%. It's bad for their families. But it goes way beyond that. It's warping sports itself in a way many people still don't realize.

Because of the omnipresence of gambling, we're seeing a massive onslaught of cynicism about sports. Sure, we still watch, but every game comes with a question hanging over it. Are we being played? The ads on the big screen and the DraftKings app on Uncle Joe's phone I mean, watching a game isn't just rooting for the team anymore. A new motive and suspicion infects everything. Humans, especially the males among us, love sports. Who doesn't feel a deep wonder in seeing the greats like Michael Jordan, Hussein Bolt, or Simone Biles in action?

Trying to describe our love for our teams and our players, French sociologist Emile Durkheim came up with this concept of collective effervescence. That pure energy of connection, a feeling that by rooting for the team, we're really actually helping them, and all the agony and ecstasy of tragic loss and epic comeback. Sports betting doesn't just betray the gamblers themselves. The treacherous reality of America's gambling industry is that it eats away at one of our most treasured pastimes. For many of us, our fathers taught us to love sports.

Our home team is still our home team. Even if we've lived seven states away for most of our adult lives, sports taught many of us great lessons, virtues like perseverance, graciousness in defeat, and generosity in victory. Sports betting, though, casts a shadow on all of that because it puts a monetary value on everything. Once virtually anything can be wagered on, people have an incentive to manipulate reality and change the world around them, and that is what sports betting is all about.

And we all start questioning everything. A libertarian strain of the GOP has argued that legalizing vice absolutely is necessary to supercharge the economy. At worst, it's a necessary evil. At best, they say, it's really the moral thing to do. Nobody's forcing anyone else to buy into the vice economy, after all, whether it's placing a bet or subscribing to OnlyFans. If people don't want to participate in vice, then great for them. That 3% of debilitated, debauched addicts who fund the industry? Well, they just lack motivation, purpose, and grit.

Too bad, so sad for them. So say the libertarians. And, in itself, gambling is not a grave evil. Small-time bettors like your local Knights of Columbus manning the parish bingo tables, they aren't the devil incarnate. But they also aren't the problem. The reality of our current sportsbooks and prediction markets is that they are designed deliberately to identify potential victims, turn them into compulsive gamblers, and suck them dry. Those who legalize everything for profit in the name of liberty are finding out that liberty looks more like slavery once a critical mass of young men are slaves to their addiction until it eats them and their families alive.

There are billion-dollar industries designed to degrade our humanity and strip us of the willpower and freedom to resist. It distorts everything that is specifically human in us. Sex is corroded by porn, eating by gluttony, play, politics, and sports by gambling. The corrosive effects of the vice economy haven't gone away or even been contained by the many, perhaps the majority of Americans who do make good choices. And that's why we can't be libertarian about the vice economy, as Americans or as humans.

There are any number of policies we could enact to get serious about ending the sports gambling epidemic, and getting back to a world where sports is an expression not of greed, avarice, and manipulation, but of joy, togetherness, and the great human drama.

Sportsbooks should be held accountable by law for the social harms associated with online betting. We should talk about safeguards like restricting advertising, banning credit cards for gambling accounts, And eliminating features designed to keep users betting, including in-game wagering, free promotional bets, and VIP programs. We need to reclaim sports for human beings, and it begins with each of us saying no to a little fun money. This is a fight we can win, because everyone, deep down, wants to get back to the thrill of victory, the agony of defeat, all without wondering if Patrick Mahomes threw the game.

Sports is worth everything. Saving, but it's going to take everything we've got. If you liked this episode, be sure to subscribe to the LOOPcast. We bring you a new episode of The Deep every Thursday at 4 p.m. Eastern.