Georgia could profit from sports betting, but risks of gambling addiction cause concern

Free gambling credits, unlimited access can lead to dependence, harm to society, experts say
Casino patrons play an NFL-themed gambling machine at the Circa Resort & Casino in Las Vegas. Online sports gambling exploded across the United States following a 2018 Supreme Court decision that allowed states to legalize sports betting. Photo by Bridget Bennett/The New York Times

Credit: NYT

Credit: NYT

Casino patrons play an NFL-themed gambling machine at the Circa Resort & Casino in Las Vegas. Online sports gambling exploded across the United States following a 2018 Supreme Court decision that allowed states to legalize sports betting. Photo by Bridget Bennett/The New York Times

As the Georgia Legislature continues attempts to legalize sports betting, experts say the Peach State should look closely at lessons learned in the 38 other U.S. states that have legalized the practice.

The National Council on Problem Gambling warns addiction is a significant public health concern, affecting approximately 7 million American adults.

“When people ask me who’s most addicted to gambling I say, ‘It’s the government!’” Jeffrey L. Derevensky, Director, International Centre for Youth Gambling Problems and High Risk Behaviors at McGill University, told The Atlanta Journal-Constitution. “States are very much addicted to the tax revenues from gambling.”

A lucrative business

Georgia stands to profit from making sports betting legal here. Supporters estimate it could bring anywhere from $30 million to $100 million in revenue to the state each year, although critics say the revenue could be much less.

Online sports gambling took off in the U.S. in 2018, after the Supreme Court decided states have the right to legalize sports betting. Around the same time, Americans began placing bets on non-U.S. websites and apps. States have argued that legalizing sports betting can keep revenues in the U.S., and benefit their jurisdictions.

Yet in many instances, Derevensky and other experts told the AJC, states aren’t setting aside enough money to educate people about the addictive nature of gambling nor the risks of using free credit to try sports gambling apps. They say Georgia should set aside funds to treat those who will inevitably become addicted if it lifts the sports betting ban.

“We can comfortably predict that in the state of Georgia, if sports betting were legalized, 1 to 2% of people will become problem gamblers,” Derevensky said. “The problem is, every problem gambler negatively impacts seven people — spouses, children, extended family, workplace colleagues. Impact rises to 10% of society.”

Recognizing a problem

A survey by Sienna College found that 39% of Americans bet on sports, and 15% know someone with an online sports betting problem.

U.S. Rep. Andrea Salinas of Oregon and U.S. Sen. Richard Blumenthal of Connecticut have proposed a bill called the Gambling addiction Recovery, Investment, and Treatment (GRIT) Act that would establish the first dedicated stream of federal funding for gambling addiction treatment, prevention, and research. Up until now, the states have financed their own addiction treatment efforts.

Half of U.S. states’ gambling addiction programs are underfunded, according to the National Association of Administrators for Disordered Gambling Services (NAADGS). Oregon, Maryland, and Delaware spend the most on a per capita basis.

Young men at risk

The risks are greatest for young men who follow or play sports, said Marc N. Potenza, Director, Division on Addictions Research at Yale University School of Medicine. “As states like Georgia debate legalizing gaming, they have to give significant thought to those people who will be adversely affected. Typically, resources for gambling treatment are underfunded compared to substance use disorders.”

The U.S. spent $94 million in 2021 to treat gambling addiction, and $31.8 billion to treat addiction to drugs and alcohol, according to NAADGS.

Commercial and Native American casino gambling brought in nearly $110 billion to U.S. casino operators in 2023, according to the American Gaming Association. Sports betting generated $10.92 billion in revenue, up 44.5%. New York topped all states with $1.69 billion in revenues from sports betting.

The grip of addiction

Gambling has been classified as a substance-related and addictive disorder since 2013, but the relationship between gambling and drug or alcohol use has only more recently been established, Shane W. Kraus, Director, Behavioral Addictions Lab at the University of Nevada, Las Vegas, told the AJC.

Kraus says 20% to 40% of people who develop a gambling addiction are also dependent on drugs or alcohol. “Even if it’s a small part of the population, that’s still thousands of people who will have to be in treatment. Georgia has a moral obligation to (offer) free problem gambling treatment.”

Treatment programs that have been shown to work include peer support and 12-step programs, such as Gamblers Anonymous, as well as brief advice-giving psychoeducation and cognitive behavioral therapies.

Kraus says there’s a 3- to 5-year gap between gambling legalization and when states typically see people needing addiction treatment. “I am not necessarily against legalization, but Georgia legislators have to come up with a plan to increases resources over time — otherwise they’re going to see increases in suicide, foster families, spousal abuse, people spending their 401Ks or liquidating their houses, like we did in Nevada.”

“Young people don’t have the cognitive capacity to limit themselves or understand probability,” Derevensky said. “Given that men ages 21 to 25 have the highest likelihood of gambling addiction, we are urging the industry to impose limits of a certain amount of money per day for gamblers in this age range. This will stop young men from chasing their losses.”

Gambling debts

Although recent stories of people robbing banks in Delaware and Pennsylvania to fund their gambling additions have made headlines, Derevensky said many young gamblers whom he has treated have racked up debts on their parents’ credit cards while at college.

And that’s not surprising, given how much gambling has now become linked to entertainment.

Sports betting was once considered “discontinuous,” meaning gamblers would have to wait until the end of the game to know if they won. “But now you can bet during the game — what color Taylor Swift’s blouse will be or what will happen in the first quarter. It’s exactly like a slot machine — people never have to stop playing, " Derevensky said.

Pay to play

A proposal by Georgia state Sen. Clint Dixon would charge license holders a $100,000 application fee, an annual license fee of $1 million, and a 20% tax on adjusted gross income. New York, New Hampshire, and Rhode Island have the highest taxes on online sports betting houses in their states, at 51%. Ohio has the lowest at 10%.

Kraus says the public must urge lawmakers to commit to a concrete funding source for treatment before the state’s gambling ban is lifted.

“If they don’t obligate the funds for treatment now, it will go to other parts of the budget,” Kraus said. “Unfortunately, legislators have a tendency to grab the money now and underfund treatment priorities that states will need later.”

Tips for ways Georgia can lower the costs of treating gambling addictions, provided by experts consulted by the AJC:

  • Educate young people about gambling addiction
  • Limit gambling to people over 21, but ideally 25
  • Establish a loss limit in the state to avoid situations in which a user who has lost big on one app can continue gambling on a second app
  • Train university officials and high school guidance councilors to recognize the problem and treat it
  • Place restrictions on predatory ads and play credits
  • Require money from sports betting tax revenues to be placed in a fund to finance treatment of gambling addiction