Make Sports Betting Taboo Again
Turn on any ESPN or Fox Sports show and you’ll hear anchors discussing spreads, Vegas odds, and laying points. The rise in sports gambling is a boost for states’ tax revenues — but it’s a disaster for the often low-income young men losing their money.
A DraftKings advertisement at a National Hockey League game on December 13, 2022, in Nashville, Tennessee. (Brett Carlsen / Getty Images)
In the midst of a recent pickup basketball game, a friend of mine called a time-out. He ran to the sideline, hopped on the bleacher, and yanked out his phone. Still scrolling, he yelled out the final score of the Cleveland Browns football game to the group of mostly undergraduate students who — to my surprise — seemed unbothered that the flow of the game had stopped.
Giddy with excitement, he told us he won his three-leg parlay on DraftKings. I surveyed my team of twelve after the game, and seven of them (all jobless) told me they regularly gamble on sports. Any longtime fan can see that something is amiss here.
I wrote several years ago for Jacobin about Robinhood and the massive growth of retail investors in the stock market: amateurs were encouraged to day-trade with no guard rails and got fleeced by the middleman in the process. As infuriating as it was to witness people lose their savings on obscure options contracts in 2020, I fear a more lasting, and therefore sizable, wealth transfer is undergirding the growth of sports gambling. This also has some surprising beneficiaries: namely state and local governments.
This April alone, sports bettors in North Carolina lost $110 million; the state collected $20 million in taxes off their wagers. From 2020 to 2022, Illinois residents lost a combined $812 million to sports betting. The state raked in $122 million from it. The owners, the governors, and the CEOs of the books have now forged a dark alliance of mutual interest in expanding this market.
This came after a key turning point. In 2018, the Supreme Court struck down the Professional and Amateur Sports Protection Act of 1992 (PASPA), opening the floodgates for states to legalize sports gambling. Seemingly overnight, thirty-eight states passed legislation allowing one or more forms of sports gambling. With little explanation, sports leagues and their media apparatuses — which had for decades fought tooth and nail, in and out of court, to protect PASPA and the integrity of competition — traded faces on this key ethical issue.
Today sports itself has undergone a near complete casinoization. Simply turn on any ESPN or Fox Sports show and you’ll hear an anchor discussing spreads, “Vegas odds,” and laying points. The current conversational lexicon of sports shares almost nothing with that of just a decade before.
As with the Robinhood debate, which also regarded rival claims of agency and exploitation, we might well believe that anyone should be free to throw their money out a car window or wager it on games, if they so please. But this isn’t about throwing money away. It’s about a “heads I win, tails you lose” system where we are made to feel as though we have a chance. It’s about our governments propping up an addictive, predatory taxation regime aimed at young vulnerable men and telling us it’s about their “fan experience.”
What is a commission fee for market investors is the “vig” for sports bettors. Short for “vigorish,” this is the percentage the books take off the top for setting up the market; bettors on each side pay the surcharge, around 5–10 percent if you’re lucky. In doing so, they’ve in essence canceled out each other’s potential for profiting over the course of continued bets. The same was true for Robinhood: an undisclosed $10 fee on every $100 investment kneecaps an otherwise profitable year for a retail trader; and if their friend took the other side and shorted the stock, his losses would multiply due to the commission. Sports betting isn’t much different.
Moreover, as with the incentivized options trading craze during the first years of COVID-19, sports bettors, too, are being led into the dark alleys of derivatives and futures markets. Up to half of all sports betting today is not a “pick the winner” wager, but rather a labyrinth of parlays and random props that take low entry costs — like the options contracts — and yield disproportionate payouts when they hit. One issue: they almost never hit. Average fans are up against the proprietary artificial intelligence algorithms of multibillion dollar corporations: the result is a wasteland of losers (in one study, 91 percent of all profits were collected by just 1.3 percent of the bettors) who felt “so close” to winning after the first leg or two of their parlay hit.
To try to summarize the issue in a short truism: the books win even when they lose, and we lose even when we win.
So why are our elected officials leading us into this dystopian fan future where smartphone gambling apps are an essential element of spectatorship? And what role should, or could, socialist politics have in fighting for the definancialization of sports and fanhood?
Trickle-Down Taxation?
Besides the rising monopoly figures like DraftKings and FanDuel picking our money off trees, the less-discussed winners here are state and local governments.
Take Illinois, a run-of-the-mill midwestern state that has embraced the sports betting world. Illinois, as discussed ad nauseum by its residents, has a financial problem: namely a pension-liabilities tsunami and the nation’s most tax-exhausted populus. With some of the nation’s highest property taxes, gas taxes, and sales taxes, the state’s pension system is still only around 50 percent funded.
Enter sports betting. What better way to expose a particular population to extreme taxation than to mask it as an additional freedom? Elected officials in Illinois and elsewhere finally found a way to increase tax collections while increasing their electability.
Now that the astronomical betting figures are coming in, Illinois recently decided to play hardball with the books. Last month, Governor J. B. Pritzker signed a piece of legislation that more than doubles the rate at which DraftKings and FanDuel, among others, would be taxed by the state — from 15 to 40 percent.
Pritzker and others claim the new tax will generate several hundred million dollars for the state in revenues. The state boasts that the money currently coming in, and the future betting receipts, will be directed toward public education and popular infrastructure projects. Fair enough.
But it will be the average bettor who will suffer from the new tax, not DraftKings or FanDuel. Let’s call the process “trickle-down taxation.” As opposed to the mythology of trickle-down economics, this mechanism does actually materialize. Even prior to the bill being passed into law, DraftKings and FanDuel issued a warning to the government, essentially promising to rig the spreads even further for Illinois residents, hiking their vigs and offering less appealing odds.
It’s hard to imagine that the potential good these new taxes will generate justifies leading millions of people into an organized shakedown.
So where does this leave us? A lot of ink has been spilled in the past few years about the crisis among, or of, men. A recent study out of University of California, Los Angeles, found that “young men in low-income counties” are experiencing the most financial distress due to the legalization of online sports betting: this translates to lower credit scores, more bankruptcies and more auto loan delinquencies for those already most at risk. The data on these consequences are young, but one can imagine a slew of related downstream social consequences: higher divorce rates, alcoholism, economic inactivity, and general anxiety and depression, to suggest just a few.
In an era of hypernormalized liberalism on any number of formerly taboo subjects, the Left should, at times, draw the moral line somewhere. The trivialization of gambling seems like a good starting point.
And on top of the sociofinancial stakes, we are, I believe, simply losing our ability to sit and watch sports; and that should matter, too. Observations are now enmeshed with random calculations, quick clicks, and a quantified experience of athletics. This is supposed to be fun, “enhanced,” and apolitical. If it is to continue, we should at least recognize the folly of the latter claim.
Sports, from the perspective of athlete and spectator, are being financialized in an array of unnecessary, degrading ways. Despite a certain traditional Marxist accusation that sports reproduce the social order of hierarchy and inequality, this is not necessarily endemic to the game. Even degrees of change in experience matter.
Insofar as the Left is demanding a more complete definancialization of sports, professional and otherwise, outlawing or at least curtailing sports gambling is atop a short list of realizable future goals. Others might include player and fan ownership of teams (see: Green Bay Packers), stripping the leagues of their cartel status, athlete-friendly schedules, and lifetime health insurance.
For now, could there not, perhaps, be an organized movement toward a decentralized, open-source platform where friends can bet against friends online without enriching corporate monopolies and acting as a pawn to the state’s taxation regimes?
I can’t say I’m hopeful. Advocating against sports betting isn’t a winning issue; but then again, just a few short decades ago, a majority of Americans opposed its legalization. Before it’s a winning political issue, the stakes and the alternatives need to be made clear.
A growing number of Gen Z and millennials are rejecting smartphone culture and attempting to recreate a romanticized engagement with life akin to the 1990s. We can see the value in this from a sports fan’s perspective, too. What’s wrong with watching a game with friends, betting a five-spot, a bunch of push-ups, or a bad haircut on the winner — and enjoying the performance?