Should America Commit to the Legalization of Sports Betting?

You can bet on sports betting taking off. 31.5 million Americans bet on the Super Bowl in 2022. That’s nearly 10% of the country.

The extreme popularity of sports betting has caught the eye of lawmakers. They are considering the legalization of sports betting, at least for major sports like football.

But many people don’t have their minds made up on the issue. Before you make a decision about the legality of sports betting, you should look at the pros and cons.

What are the economics behind sports betting? Who stands to gain from it? What are the ethical concerns behind legalization?

Answer these questions and you can decide who is right in the sports betting debate. Here is your quick guide.

Economics

Ask someone about the benefits of legalizing sports betting, and they’ll talk about the economic impact of legalized sports betting. In reality, there are multiple impacts of betting, and not all of them are positive.

Casino Profits

The organizations that stand to gain the most from sports betting are casinos. They can charge fees for accepting bets, and they can keep the money from lost bets.

Some states like Montana do not allow casino-style gambling. They allow sports betting as a lottery product, with the state running it. This means the state government would benefit the most.

It costs little money for pre-existing casinos or state governments to accept bets. They need to hire employees to take bets and handle money, but that expense is low. This means that casinos and governments should expect to turn profits once sports betting is legalized.

Ratings for Games

Allowing sports betting would encourage fans to watch sports more often. They want to see what the outcomes of their bets will be. They may make prop bets based on unusual outcomes during the game.

Ratings increase profits for television broadcasters and sports organizations. Broadcasters can charge higher fees for advertisements as their ratings get higher, further increasing their profits.

Broadcasters may be encouraged to broadcast new sports. Bettors may want to try gambling on soccer, golf, and other events besides football. This allows athletes and organizations in these sports to earn more money.

New Betting Companies

As the gambling market grows, entrepreneurs will compete to start their own gambling operations. Bookies can accept bets by themselves, working with small groups in rural areas. The best bookie software is cheap and easy to use, so thousands of people may become bookies overnight.

Businesspeople can launch their own businesses. They can run news websites telling people about the latest developments in sports. They can accept bets through mobile apps or websites, and they can run consulting firms for bookies.

FanDuel and DraftKings will likely court the majority of new customers because they are pre-existing companies. But some customers will go to small companies, keeping them afloat. Big companies can eventually buy smaller ones, letting the owners turn a profit.

Sports organizations can also form partnerships with these new groups. The two can profit off of each other and sell merchandise together.

Taxes

The more money people make, the more taxes the government can collect. Gambling winnings are 100% taxable, and gamblers must report their earnings as income. They also must report the fair market value of any prizes they win, including cars.

The government may be able to make billions of dollars a year. This lets them cover essential programs that need funding. The government can also collect taxes from casinos and sports organizations.

Tax laws vary wildly from state to state. For governments to get the most money they can, they need to standardize the tax rates. They also need to hire enforcement personnel who can check documents and collect taxes from offenders.

Ethics

The biggest argument against the legality of sports betting is ethics. Players may accept bribes from people to throw games. This may be a big problem on the collegiate level, as college athletes don’t get paid for their work.

Islam and other religious traditions regard gambling as unethical. They see it as an unfair way to earn money, which should be earned through hard work.

Some people may steal money in order to bet it on games. Some bookies may also take money from their clients and run with it. On rare occasions, fights may break out between bettors or casino employees.

Gambling Addiction

Gambling addiction is one of the worst effects of the legalization of sports betting. People are more likely to develop an addiction in areas where betting is legalized. Some people may bet their homes or cars, which makes them vulnerable if they lose.

Some bettors use drugs and alcohol to remain focused while they are at a casino. Casinos sell alcohol to gamblers in the hopes of getting them intoxicated and keeping them inside. This means that betting legalization can make other addictions worse.

However, the legalization of sports betting may call attention to gambling addiction. State governments may provide more resources for people to get help with their addiction.

The Issues in the Legalization of Sports Betting Debate

The legalization of sports betting is complicated. Casinos, state governments, television broadcasters, and sports leagues are the biggest beneficiaries. But entrepreneurs can benefit if they open up gambling websites, especially in rural and local areas.

On the other hand, athletes may take bribes to throw games for the benefit of bettors. Rates of gambling addiction will rise, and addiction may become more crippling. States must prepare to collect new taxes and help people with their addictions.

These issues are just the tip of the iceberg. Read more gambling guides by following our coverage.