Sports Betting Is Legal. Watch Out.

(Bloomberg Opinion) -- Since ancient Rome, gambling on athletic events has been a fun, popular and hugely ill-advised pastime. Now states across the U.S. are racing to legalize it. They should remember that the benefits of this enterprise are limited, the risks large, and the social costs entirely unpredictable.

Last year, the U.S. Supreme Court struck down a federal law that had effectively banned sports betting outside of Nevada for nearly three decades. Since then, eight states have approved legal wagering, and another 20 or so are considering it. But as Justice Samuel Alito wrote in striking down the ban: “Americans have never been of one mind about gambling.”

On one level, the appeal is obvious. In all likelihood, the U.S. will soon become the world’s largest sports-gambling market. Jobs and tax dollars should follow. Casinos and sports leagues should profit handsomely. Black-market bookmakers — thought to handle some $150 billion annually — could be put out of business as gamblers gravitate to safer and more transparent alternatives.

Yet states have barely begun to consider the downsides.

One concern is addiction. More than 2 percent of U.S. adults suffer from gambling disorder, which can impose devastating personal and social costs. By one estimate, legalization will make 28 million Americans more likely to place bets. Yet states are entirely unprepared for this added risk: Only three of the eight that have so far approved sports wagers have also increased funds to treat addiction. On average each year, states spend 23 cents per capita on such treatment; it’s not hard to foresee a serious problem.

Another potential threat is corruption. Gambling has long provided a convenient conduit for organized crime. Point-shaving scandals have marred college sports in the U.S. for decades, while match-fixing is routine in some overseas leagues. Without safeguards, widespread wagering — particularly on college games, where athletes are unpaid — might in theory increase such temptations and corrode the integrity of competition.

A final, less tangible concern is that gambling could diminish the social value of sports. Athletes are already being subjected to intrusive tracking technology that reduces their every move to data, the better to predict – and profit from – their performance. If civic or sentimental attachments to teams give way to a preoccupation with cash and probabilities, something will have been lost.

Be that as it may, Congress should protect the public from the more imminent dangers. A bipartisan bill that would set federal standards for states that want to legalize sports gambling is on the right track.

Among other things, it would mandate self-exclusion safeguards, which can help addicts prevent themselves from gambling. It would require operators to devote an “appropriate percentage” of revenue to treatment and education. And it would institute some sensible advertising standards. Importantly, it would also create a clearinghouse to share data among leagues, bookmakers, regulators and law enforcement, which would make it easier to detect suspicious betting and prevent crime. Coupled with a renewed effort to shut down overseas shops, it could help make bookmaking a more honest business.

The long-term consequences of social experiments such as liberalized betting are hard to predict. But states can and should lessen the dangers as they roll the dice. Congress can demand sensible rules of the game. And the gambling public, newly liberated, can be more confident that they’re about to lose a lot of money fair and square.

Editorials are written by the Bloomberg Opinion editorial board.

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