I recently watched a baseball game and kept a count of the number of sports betting ads that I saw. It was fourteen such ads by the 7^th inning. In short, if you watch sports these days, you are inundated with messages urging you to be cool and bet on sports. I’m a curmudgeonly old fart, so it’s my job to disapprove. I disapprove.

I imagine there are good reasons why the Ontario government decided to get in on sports gambling. The first one is that Ontario gets a healthy cut. Just how healthy that cut is, I’m not sure.  A recent government reports showed that in the first three months of legalized sports gambling, Ontario’s gaming site recorded $162M in revenues. However, Sportsnet Ontario says “iGO’s report didn’t provide specifics regarding how much of Ontario’s revenues came from sports betting and online casinos or how much tax revenue was generated for the provincial government.” Suffice it to say that there’s big money flowing into gambling coffers and the Ontario government gets a slice from its licenced booking site.

PlayCanada.com, a gambling news and analysis web-site was frankly underwhelmed by the reported revenues, describing them as about one quarter of the revenues from similar sized US jurisdictions like Michigan, New Jersey and Pennsylvania. Given that this was just the first quarter of legalized sports betting in Ontario, though, those revenues are expected to grow.

I have some sympathy with the Ontario government’s decision to licence sports gambling sites. I imagine that there was a substantial stream of Canadian dollars going across the border to American sports gambling sites, and it probably seems reasonable to recognize reality and try to at least share in the revenues.

Although the revenues from sports gambling are expected to grow, they are but a drop in the bucket compared to the total revenues from lotteries and casino gambling. In 2020/2021, OLG reported $4.2B in total revenues, down 42% from the previous year owing to Covid related closures. From that revenue, OLG realized $359M in profits for the province.

Let me talk a little but about gambling issues in general and then sports book gambling in particular.

The big problem with gambling is gambling addiction. I don’t pretend to a sudden flash of brilliance in the realization that gambling produces gambling addicts. Everyone knows that to be true. The real question is, how do we deal with that problem? How big is it? Does the downside (gambling addiction) seem to be balanced by the upside (profits for government, retailers, First Nations communities, horse racing industry)? Are there adequate guard rails in place to minimize the social costs of problem gambling?

Australia was one of the early converts to state-run gambling. About 11% of Australian gambling is associated with sports and racing. The remaining 89% is driven by lottery games, scratch tickets and poker machines. Australia estimates that approximately 7% of its populations is at risk of experiencing gambling related problems. 

In Finland, 3.3% of the population is estimated to have gambling problems. They note that 50% of the government’s gambling revenue comes from 5% of the players.

A June 2021 report on Australian gambling stated that Australians lose $24.9 Billion annually to gambling and their per capita gambling losses are amongst the world’s highest. “The Productivity Commission estimates the social cost of problem gambling to be at least A$4.7 billion a year with countless studies linking gambling to theft, loss of employment, bankruptcy, family violence and homelessness”. Problem gamblers are 15 times more likely to commit suicide. If they’re not committing violence on themselves, they are frequently committing violence on their families. The same Australian report says “while the causes of family violence are deeply embedded in gender inequality and gender stereotypes, what we do know is that, with gambling addiction, the frequency and severity of family violence incidents increase…. The rough social cost of a single problem gambler is about $10,000 a year.”

So, should we make gambling illegal? I think the answer is unequivocally “no”. First of all, it’s not practical. Gamblers will find a way to gamble, and in this high tech inter-connected world, there is no lack of options for any gambler who wants to have a flutter. Second, for most people gambling isn’t much of a problem. I buy lottery tickets. I know that it’s a losing proposition but I’m not worried about that. If you don’t buy a lottery ticket you can’t dream a little about what you’d do if you won. People like me aren’t the problem. The problem is that small fraction of people who cannot control their gambling and wind up in financial difficulty. 

In an earlier article on taxation, I proposed the use of a smart card which would limit the amount that a gambler could stake in any given period of time. I still think something like that is desirable and achievable. Additionally, the government should devote a significant portion of the money it rakes in from gambling to addressing the social costs of that gambling. Gambling addiction treatments should be covered by provincial medical coverage plans. 

I would like to see some changes in gambling advertising too. I’d like to see limits on how many gambling messages a TV station could broadcast in a given day, and I’d also like to see a regulatory requirement to run a “gambling addiction support” ad for every two or three gambling ads. We’re all used to the “know your limit, play within it” message from OLG. We also see some sports gambling sites talking about the tools that can be used to control your gambling. I regard both of those as insincere, hypocritical messaging designed to satisfy lawyers and protect the advertiser from “lack of due diligence” lawsuits. In all of those ads, the intended message is “gamble more and do it with us”, and the cautionary message is lost. Gambling caution ads should have a clear bottom line message that gambling isn’t necessarily cool and you’re not a loser if you refuse to participate.

OK, so enough about gambling in general. What do I have to say about sports gaming? Well, first, I dislike the fact that sports coverage is now more about gambling odds than it is about sports performance. That June 2021 Australian article on gambling said ““Our TV screens have been overtaken with gambling ads during sport, and that creates a subsequent normalisation of gambling for kids. We have a situation now where children quote the odds instead of focusing on the game.” Football is particularly laden with this issue. In many sports broadcasts, it seems to be more important how a team did against the spread than whether they won or lost.

The next problem is that of corruption. A November 2021 article in The Atlantic said “Gambling produces corruption the way salt water produces rust”, and I think that’s true. Not every horse race goes to the fastest horse. 

Shoeless Joe Jackson will never be in the hall of fame for baseball because of the Black Sox scandal in 1919. Pete Rose will likely never be in the hall of fame because he gambled on his own team. Tim Donaghy was fired from his job as an NBA referee in 2007 and went to prison for fixing games. There have been innumerable scandals in soccer. Tennis has had a whistleblower spilling the beans on tennis match fixing. The more I research, the more I could write, but I don’t think it’s necessary. We all know it’s happening, and with the legalization of sports gambling, there’s no reason to expect that it won’t get worse.

Corruption in gambling affected sport is driven by greed and hunger. Greed motivates the corrupting influence and hunger motivates the person they approach to fix a game. That person could be a player, a coach or an official. The more hungry the target is, the more likely the corruption approach will work. So, when we think about gambling corruption in sports, think about lower level leagues. Maybe you won’t be effective approaching a $25M per year ball player in the majors, but what would happen if you approach a pitcher in a collegiate baseball game? Would any OHL junior who saw the writing on the wall and knew that he wouldn’t get drafted ever be tempted to take a penalty at a key moment in a game? Would a CFL kicker ever deliberately miss a field goal? The CFL is a lower level league, and it doesn’t get all that much attention, but the Canadian Centre for Ethics in Sports estimates that $4M is bet on a CFL game. CFL players don’t get paid a lot – which makes that kicker a tempting target for a corruption approach.

There is no real cure for this. Gambling produces corruption the way salt water produces rust. But maybe we can limit the problem and try to protect the integrity of sport. The gambling public wants to be able to bet on games, but there’s no need to allow them to bet on every game. Let’s make sports related gambling legal in a defined subset of sports encounters. So BetRivers.net could offer gambling on the NHL but not on AHL games.

Let’s force the league to apply to the regulator for the ability to be listed on gambling sites, and make that league demonstrate what their rules and processes are to guarantee the integrity of their game. 

Let’s force gambling industry to enter into revenue sharing agreements with the approved listed sports leagues, and let’s force the leagues to share that revenue generously with coaches, athletes and officials so that the hunger is less and the temptation to accept a corruption deal is stifled.

Prohibition of gambling is unnecessary and unmanageable. But regulations designed to protect problem gamblers and to protect the integrity of sport is highly desirable. Our government needs to look past that highly desirable gambling revenue and think about what they ought to do to address the downsides of gambling.