A new kind of bet on sports gambling
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COMMENTARY | The Online Problem Gambling Act, while far from perfect, will reshape sports betting in Colorado and could provide more insight into how to curb harms.
Last month, Colorado Gov. Jared Polis signed the Online Problem Gambling Act, a law aimed at reducing some of the harms associated with online sports betting. The bill limits each bettor to no more than five deposits in any 24-hour period, restricts push notifications that explicitly solicit bets, and bans gambling deposits with credit cards, among other measures.
The bill made it to Polis’ desk because the final version was the product of substantial compromise. In April, a provision to ban prop bets was stripped. A restriction on gambling advertising between 8 a.m. and 10 p.m. also disappeared. The measures that survived the negotiation process are not nothing. But they fall short of the kinds of sweeping reform that many gambling critics believe is necessary to prevent addiction or financial harm.
The industry, for its part, argues that the bill is a bad bet that could backfire. If gamblers know they can only make five deposits, they will increase the size of each deposit and bet more than they otherwise would have. And the industry insists that advertising is crucial to help customers differentiate between licensed and unlicensed providers, and any restriction on marketing is a gift for operators that don’t have to follow the same set of rules, which, these days, also means prediction markets.
These arguments should be taken seriously. But the bill is important not only because of how it will reshape gambling in Colorado, but because it represents one of the first genuine experiments with the setup of online sports gambling in the U.S.
By the standards of American policymaking, sports gambling arrived extremely quickly. Thanks in large part to industry lobbying, 39 states and Washington, D.C. legalized sports betting within seven years of a 2018 Supreme Court decision. By comparison, from the launch of the New Hampshire Lottery in 1964, it took 40 years for lotteries to reach 39 states and D.C.
One consequence of this rapid spread is that sports gambling is mostly the same across states, particularly in the states that allow online gambling. There are some exceptions: Oregon and Florida are monopolies, with only a single sportsbook. D.C. also experimented with a monopoly model. It did not go well. Massachusetts and Ohio have the most proactive and aggressive gambling regulatory agencies. Tennessee and Vermont are the only states with online sports betting but no in-person sportsbooks.
But for a bettor opening a gambling app on a Sunday afternoon, the basic experience is largely the same across states: the same apps, the same frictionless deposits, the same live odds, the same parlay promotions, the same in-game betting, the same incentives to keep playing.
That uniformity is a missed opportunity.
States are, per Louis Brandeis, “laboratories of democracy.” The beauty of American federalism is that states are free to test out different policies and other states — or even the federal government — can apply those lessons.
That’s not what’s happened with sports betting. Instead, states are basically all experimenting with the same version of the same product. There are some differences here and there, around things like tax rates, the betting catalog (the sports and types of outcomes that sportsbooks can take bets on), and funding for problem gambling treatment. But these are not the kinds of things that shape the day-to-day experience of the vast majority of customers.
Colorado’s law is notable because, however modestly, it breaks from that pattern. The bill does not fully reshape online sports gambling. It does not fully resolve the tension between consumer freedom and consumer protection. It may not even work as intended.
But failure would still be instructive. Anyone interested in making gambling safer will have information about deposit limits, in particular, as a reform idea. Do they affect the total amount gambled? Do bettors actually increase the size of their deposits? Are there indications that fewer people are gambling more than they can afford, or are developing gambling problems? The answers to these questions can inform the kinds of reforms that advocates call for, and the kinds of changes that states implement.
The current state of state-run sports betting simply does not provide enough evidence as to what works to curb harms from legalized gambling. Sports betting is still evolving. More states need to bet on new policy ideas. Without more experimentation, we’re all losing.
Jonathan D. Cohen leads gambling policy for the American Institute for Boys and Men. He is the author of Losing Big: America’s Reckless Bet on Sports Gambling.