Online Gambling ‘Safety Rankings’ are Backwards, Built on Bogus Prohibition Ideals
Credit: Pip! Gold/Flickr
An organization called the Center for Addiction Science, Policy, and Research (CASPR) recently released a study that purports to rank U.S. states by the level at which they protect residents from online gambling harms and bankruptcies. Unfortunately, it seems completely anchored to prohibition ideals, clinging to the false idea that not having state-regulated gambling is the same as not having gambling at all.
The complete state rankings are available here.
The study seems well-meaning. Here’s how CASPR describes itself:
“CASPR is a 501(c)3 non-profit organization. We are a true public interest non-profit, not funded by industry. We receive no funding directly or indirectly from pharmaceutical or other healthcare businesses nor from the gambling industry or related entities.”
I want to applaud anyone delving into this stuff. As online gambling explodes in popularity and more states continue to expand their markets every year, not nearly enough time, attention, or resources have been devoted to responsible gambling.
However, the idea that prohibition is protecting the residents of a state from online gambling is completely backwards.
Prohibition Methodology Powers State Online Gambling Safety Rankings
A look at the scoring methodology makes it clear how the rankings are calculated. The closer a state hews to completely disallowing online gambling, the better it scores.
Among states that do allow online gambling, the more restrictions they have, the higher they score. For example, bans on certain types of bets (in-game sports betting and micro-betting) earn points. Restrictions on mechanics like promos and bans on credit card deposits earn points.
Interestingly, higher tax rates earn more points. I can see both sides of this one.
On the one hand, higher tax rates on operators typically mean less promotional spend, which limits the in-your-face advertising that almost everyone agrees is bad. It also means more money for responsible gambling funds, which are usually tied to a percentage of the tax revenue.
All of that seems good. On the other hand, higher taxes generally result in a worse product for the consumer. There’s less free-market incentive to encourage competition and better products from the operators. That only serves to potentially push players to offshore and underground entities. And that’s the heart of the entire issue here.
The Problem: There’s No Such Thing as Online Gambling Prohibition
I’m going to let you in on a little secret that’s not actually a secret. Contrary to what this study says, there aren’t any states without online gambling.
Take, for instance, my home state of Nebraska. It’s ranked as the 13th safest, but it’s perhaps more instructive to look at its 95/100 score. In other words, it’s much closer to No. 1 Montana (99/100) than it is to No. 20 Massachusetts (62/100).
According to CASPR, Nebraska has protected me from online gambling harm and bankruptcy by not passing any laws allowing online gambling.
In reality, all I have to do is log in to an offshore account, and I can lose thousands of dollars gambling with absolutely no consumer protections. I know this because I’ve done it. If I want to open an online sports betting account, I can think of at least three people I could call right now who would have me online and betting within minutes. Suffice to say that anybody with a modicum of connections in the gambling world can probably find these people wherever they go.
How, then, is Nebraska protecting me from online gambling harms and bankruptcy? Pushing me to use these unregulated options seems like the opposite of that, if you ask me.
The spread of prediction markets has made this more true than ever. These operators like to tout legality in all 50 states, and they have been infamously crass when it comes to responsible gambling.
Here, I’ll note that CASPR’s ranking gives credit for fighting prediction markets via cease-and-desists and lawsuits. But until the courts (most likely SCOTUS) resolve the legality of prediction markets, posturing from the states isn’t stopping people from using them.
I don’t know whether Montana or Delaware (No. 50 in the rankings) is making things safer for their residents when it comes to online gambling. What I do know is that it’s a complicated, nuanced question. Sticking our heads in the sand and saying, “No legal online gambling equals good,” vastly oversimplifies things, at best.
Image credit: Pip! Gold/Flickr (license)
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