More than 30 states and the District of Columbia have launched some form of legalized sports betting, establishing the U.S. as one of the fastest-growing markets in the world.
There is currently no legal California sports betting.
But two different sports betting initiatives — one offering retail sports betting at tribal casinos and one legalizing mobile sports betting — go before voters in November in the nation’s most populous state. The online initiative officially qualified for the ballot last week.
When online betting does come online in a state, operators are tasked with doing their fair share to prevent customers from becoming problem gamblers.
Much has been made of late about steps the nation’s leading sports betting and iGaming operators can take to embrace problem gambling solutions.
In California, tribal sports betting proponents have said online sports betting will increase problem and underage gambling. Those supporting online gaming say those claims are “false attacks.”
BetCalifornia.com chatted with Keith Whyte, who serves as the executive director of the National Council on Problem Gambling.
Below is a transcript of that conversation, edited for brevity and clarity.
NCPG Neutral on California Sports Betting
BetCalifornia.com: How exactly does regulated online gaming impact problem gaming as opposed to the black market?
Keith Whyte: So, I think that regulated online gambling done well can actually have less of a negative impact. Because there's so many more tools available to monitor player behavior, create informed choice among those players, and then nudge or steer them towards interventions, and there's a lot of online help available.
The problem is, absent regulation, and absent good regulation, online gambling can be just as dangerous or even more dangerous. So, it really depends on how operators use and what tools regulators require for responsible gambling that makes the impact, either less or more on people with gambling problems.
BetCalifornia.com: Much has been made from organizers of both California sports betting initiatives about how their solution is the best for tackling problem gambling. What’s the NCPG’s stance on those claims?
Whyte: Well, we're neutral on legalized gambling. So, to be clear, we're not taking a position on any of the referendums or whether or not California should legalize sports betting or not, or whether or not any particular state should do it.
However, we would say that any form of gambling creates people that have gambling problems. And that, really, we understand that various proponents are using problem gambling to advance their own particular agendas.
We stay out of that fight, we would just say that any form of gambling can have problems. It really depends on how you perform that has a greater impact.
BetCalifornia.com: How far has the U.S. sports betting and iGaming industry come in terms of problem gaming, and what are some of the things they’ve done to crack down on problem gaming among their customers?
Whyte: One thing I would say is that there are operators who have gone quite a long way at not just developing good policies and procedures, but in actively using the data they collect on players to try and spot potential markers of gambling harm.
There’s more robust efforts to make sure that there are services in place to help players who have a problem in a number of areas. And so, I think there's a lot of good, and again, putting the massive technology and innovation and expertise the online gambling industry has in terms of marketing and encouraging people to gamble, putting some of that same technology and expertise in the service of encouraging people to gamble responsibly.
There’s some obviously great stuff that's happening there. The problem with the online industry is that that's only really a relatively few leading brands. And there are a number of smaller operators that are in a few jurisdictions who only are doing what's required of them.
And in many of these jurisdictions, outside of New Jersey, the regulations around problem gambling are pretty lacking. And so, you've got a few leaders who I think are setting a really good example. But you've got a lot of followers, and some people who are doing as little as they can to protect people with gambling problems.
And so, until that issue is addressed by the online gambling industry, we still have to judge them, not by the highest performing member, but by the lowest performing member of the online gambling industry. And that, unfortunately, is a pretty low bar.
U.S. Learning from European Markets
BetCalifornia.com: How does the American online sports betting market compare, when it comes to problem gaming services, versus more established markets, like the U.K. and other parts of Europe?
Whyte: That’s absolutely a lot of what we do is try and find policies and procedures, regulations that work in other markets. And that can be adapted into the U.S. culture, because culture matters.
And we have a different regulatory environment and a different kind of business culture than they do in some of these other markets overseas. But one thing we know is that the U.S. is probably starting at a higher rate of gambling problems. Because we’ve done a lot less with problem gambling.
In fact, there's still today some U.S. states, including the District of Columbia — which has legalized online — they don't have any public funds available to prevent or treat gambling problems.
So, I think we're starting at a higher base rate than some of these other jurisdictions, just due to government inaction, and due to the lack of availability of health care in general. And then, we believe, between 2018 and 2021, national surveys showed a 30% increase in risk for gambling problems. That increase was concentrated almost entirely among young male online betters.
And many of those, of course, are online sports bettors. But the good news is, there's also been an increase in protective factors. There’s more money than ever being spent to prevent and treat problem gambling, there's more responsible gambling tools available, sites are moving from kind of an opt-in approach, where there are less responsible gambling tools. So, you’ve got to put in place more opt-out approaches, where they're promoting those tools a lot more, and they're trying to encourage users to take them up.
Which is smart, because responsible family theory says a healthy, sustainable customer has a better long-term or lifetime value. So operators should be doing everything they can and doing a lot more than they are now to encourage their players to use responsible gambling tools, if they truly believe in gambling, because a sustainable customer has higher lifetime value.
So, there’s good sense of progress. And we are learning a lot from overseas markets. We're learning a lot about how operators can use the day-to-day action to spot potential markers of harm. We’re learning a lot about how to encourage people to use the tools that are available. Because right now for most of our operators that sort of passes, and you're seeing overseas, a lot of success, a lot more active approach.
No longer is it okay to say, ‘hey, we have these tools available, but we know only 1% of our customers are using them and we've done our part.’
I think what we're seeing in jurisdictions internationally, is the regulators and legislators and the public are saying that it's not enough just to have the tools available. When you know that 99% of your players aren't using them, you got to flip that, you've got to make sure that the majority of your players are using these tools.
Because [operators] say it's in your best interest that the players use responsible gaming tools. So, there's an obvious disconnect between promotion of responsible gambling tools and usage of responsible gambling tools, and that's something that we're seeing.
We’re seeing a lot of international jurisdictions go to mandatory or at least opt out approaches, where in the US it's still primarily opt in. And as a result, there's very low uptake of responsible gambling tools in our country. Even though it would behoove everybody — it would reduce the potential for backlash and government regulation. There are only good reasons for operators to adopt these tools. And there are only negative consequences when they don't. But most operators still, if they have the tools at all, they don't tell anybody about them.
Next Five Years Key for Problem Gaming Regulation
BetCalifornia.com: Where do you see the industry going in the next couple of years in terms of responsible gaming, and what are some of the main aspects you see that evolution riding on?
Whyte: I think in the next three to five years, we're going to reach an inflection point in responsible gambling in the United States.
So, in three to five years, you'll either have one future where the industry sort of proves that voluntary self-regulation can work, because they've gone above and beyond the minimum, and they've got all their peers and competitors going above and beyond in retail. Or, I think, unfortunately, what is more likely, is you're going to see the same trends we have now, but even more, so you're going to see that the white label operators operate nationally, and even internationally. They're the ones that have invested the time and technology into real aggressive response gambling solutions.
And then you're still going to have the bulk of the operators, and especially smaller and regional or local ones, that still only do what's required and no more. And they tend to operate in jurisdictions where the requirements are much less to start. And I think that's where the problems are going to be.
And I think that's going to result in UK-style backlash. It’s not going to be the major brands in the well-regulated markets. But the leakage and the problems, I think, are going to come from lesser regulated markets, where operators are just barely doing the minimum, and it's going to give the entire industry a black eye.
And I think it will result in a crackdown. Even [last week], there was a lot of reporting about remarks by regulators at the International Association of Gaming Attorneys and Advisors, at their meeting up in Boston. And pretty much every regulator on the panel said that we are going to take action, because the entire industry is not. There’s some good stuff going on. There are some markets where the protections in place are better. But as a whole, the industry should expect greater regulation around advertising, around data, around a lot of things, because of responsibly handling concerns.
I mean, we’ve been watching what happened in the UK. I don't think it takes a huge crystal ball. But I think the industry still has some time to turn it around. But it's going to take a significant amount of work, and a significant commitment of all the rest of the online gambling operators to follow the lead of the top.
So, they still have to step it up, but they don't have that much further to go, I think, to achieve pretty good responsible gambling. It is just they're being dragged back by their peers, who have deliberately chosen not to invest in responsible gambling, and who are not just content, but their business model is to do the minimum.
So, that’s our prediction. We can push those at the bottom, we work with those at the top, and we will even work with those at the bottom. We're trying to help them get to where they need to be, but we can't make them work with us.
And that is our 50th anniversary, the NCPG’s space for five decades. So, we're here to help. But there are still a lot of companies that choose not to work with us. And I think that's a shame.
BetCalifornia.com: What’s your parting shot for people that read this story about the state of problem gambling management in the U.S.?
Whyte: I think responsible gambling has enormous opportunity. But the window is starting to close for those who are still resisting embracing modern, responsive gambling. I do think the trend is pointing towards greater regulation. And companies that didn't get there, companies that don't do good response gambling voluntarily, I think are going to find themselves under considerable regulatory and even political pressure.
And that's not a pleasant place to be as well from looking at gaming and other jurisdictions where they have cracked down. So, the time to get your house in order on responsible gambling, I think, is here. And I think the window is closing to get ahead of further regulation.