LEILA FADEL, HOST:
NCAA March Madness begins with Selection Sunday this weekend. Millions of people are expected to fill out a bracket and pay to enter pools. The American Gaming Association estimates that people will legally bet more than $3 billion on this year's men's and women's college basketball tournaments. But it will cost. Jonathan Cohen is the author of the new book "Losing Big: America's Reckless Bet On Sports Gambling." Welcome. Thanks for being on the program.
JONATHAN COHEN: Thanks for having me. Good morning.
FADEL: So, Jon, it's impossible to watch American sports and not see commercials for legalized betting. How big has sports gambling gotten?
COHEN: Yeah, so legalized gambling arrived in the United States just seven years ago. And since then, Americans have bet around $500 billion on sports just over that period. And as many as 20% or 40% of American adults have placed at least one bet on sports in the last seven years.
FADEL: And seven years ago because of the Supreme Court decision to strike down a law that effectively banned commercial sports betting in most states.
COHEN: That's right.
FADEL: Are states benefiting from the legalized betting industry? Is this good for them?
COHEN: This is sort of the perplexing question. States, of course, are benefiting. You know, that $500 billion translates into revenue for states down the line. But the question I have is exactly to what degree. So $500 billion sounds good on paper. Sports betting is actually a very small-margin business, so only about 95% of that money gets returned to players, and then 5% goes to sportsbooks. And then there's tax on that money. That's what goes to states. So it ends up being a - relatively, percentage-wise, a small percentage of the money goes to states. And then that money accounts for an even smaller percentage of states' actual budgets. So They are benefiting, but to what degree?
FADEL: And what is your concern around sort of deregulating it?
COHEN: Yeah. The concern is - and the word I use in the title of the book is reckless - is that this was sort of rolled out so quickly. And particularly the fact that it was available online right away, that it did not have sufficient safeguards in place, particularly for young men, who have been sort of the most affected by the rise of sports gambling. And we've seen, in that population, rising rates of both problem gambling and just general financial insecurity, and the - people betting more than they can afford to lose.
FADEL: Well, if the states aren't benefiting in a big way and there's this concern around gambling addiction and financial insecurity, what is the upside of this?
COHEN: Well, the upside is that lots of Americans before 2018, before the Supreme Court decision, were gambling anyway. They were gambling offshore. They were gambling illegally. And now they have a chance to do so aboveboard - legally, in a safe, regulated market. I think, actually, that's a good thing. I'm in favor of, you know, people being - having a chance to bet and having a chance to do so safely and legally. The question is, are - have we gone sort of a bridge too far with the marketing that you mentioned or some of the other, what I think are predatory practices by sportsbooks that are inducing more people to play more than they otherwise would have?
FADEL: And so, really quickly, what would you propose should be happening, where it can be legal but regulated in some way?
COHEN: Yeah, there are lots of, I think, reasonable policy solutions. Things like deposit limits - you know, limiting how much money someone can deposit into their account, limiting the number of bets they can place in a 24-hour period, lots of sort of wonkish ideas. Editing the advertising or fixing the advertising - that would, I think, not actually do that much damage to the overall sports betting infrastructure but would make the games a lot safer for people who are at risk of developing problems.
FADEL: Jonathan Cohen is the author of the new book "Losing Big: America's Reckless Bet On Sports Gambling." Thanks for being on the program.
COHEN: Good luck with your bracket.
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