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Abstract

For many years, gambling was limited to lottery tickets and casinos in select states and Nevada was the only state where sports gambling was legal. In 2018, the Supreme Court ushered in a new era of gambling when it struck down the federal Professional and Amateur Sports Protection Act (PASPA) in Murphy v. National Collegiate Athletic Ass’n.

States are now free to regulate sports gambling, including mobile gambling on cell phones. Thirty-six states have legalized sports gambling, and twenty-nine of those states allow for mobile betting. Online casino games such as slots and blackjack have been legalized in six states.

If you have watched a sporting event on TV in the time since the Murphy decision, there is a good chance you have seen an ad for sports gambling as numerous companies work to grab market share in the new industry. These ads promote the possibility of big wins and offer attractive sign-up inducements such as “risk-free” and “no-sweat” bets. Some online promotions even tout the opportunity to win “guaranteed” money. These ads mislead individuals on their likelihood of winning by playing on cognitive biases. Research shows that people are overly confident in predicting events, which can cause them to misunderstand the risks of gambling. It is estimated that less than 5% of gamblers win money in the long-term. For the rare person that does make money in the long term, many gambling websites will restrict winning users’ ability to bet. Unsurprisingly, the increased prevalence of gambling has led to increases in addiction that comes with financial and social costs. Some states have begun to prohibit misleading promotions for “risk-free” and “free bets” to protect the public, but the volume of ads continues.

In Part I, this article will describe the current state of gambling advertisements and the negative effects of legalized mobile gambling on the public. Part II will examine and propose reforms to the regulation of online gambling, drawing lessons from solutions developed in response to the public health crisis created by the tobacco industry. This article proposes closer regulation of misleading advertisements and requirements that gambling companies inform consumers of the risk of addiction and the likelihood of loss, rather than falsely glamorizing their product.

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