Sports betting skyrocketed in pandemic. Experts warn of a 'ticking time bomb'
S E E D E D C O N T E N T
On the outside, he seemed to be living a charmed life. He was a new dad, with a loving wife and a high-paying job at a Fortune 500 company. But by this March, the 29-year-old man from Rhode Island had hit rock bottom.
He had been throwing away money on sports betting for years, but the Covid-19 pandemic brought it to a new level. Trapped in his house, staring at his computer screen all day, the man experienced a malaise that drove him to gamble more. And more. And more.
"I started to bleed money," he said.
Chasing his losses, he took out four high interest loans. Then he emptied his 401K account. Even after finally coming clean to his wife and promising to quit, he still continued to bet, increasing his losses to about $200,000.
"I'm so ashamed of myself," said the man, who requested anonymity out of fear his story could cost him his job.
"I cry at night. I can barely look at my daughter. I can barely look at my wife."
The U.S. is in the midst of the largest and fastest expansion of legal gambling in the nation's history.
Sports betting surged after a 2018 Supreme Court decision paved the way for its legalization in states beyond Nevada. Legal sports betting became available in five states and Washington, D.C., in 2020 — bringing the total number of sports betting states to 21 — at the same time as the Covid-19 pandemic sparked a sharp rise in online gambling of all forms as casinos closed and Americans hunkered down in their homes.
Despite the proliferation of online gambling, in which large sums of money can be lost with a few clicks on a smartphone, federal and state governments still devote few resources to tracking and treating people with gambling problems, experts say.
"It's this ticking time bomb," said Keith Whyte, executive director of the National Council on Problem Gambling. "We have to take action now, but the problem is almost impossible to quantify."
Sports betting companies like FanDuel and DraftKings have become ubiquitous, sponsoring major events and unleashing a blizzard of advertisements on social media and TV.
The companies offer features designed to stem problem gambling, allowing players to set deposit and spending limits and to restrict themselves from placing bets for certain lengths of time. And the industry is highly regulated, with companies risking fines and other penalties from state oversight agencies for such infractions as operating unapproved games and activating accounts for people on self-exclusion lists.
But some experts worry that the industry lacks adequate guardrails to protect problem gamblers who are at increased risk of suicide, and to prevent illicit activities like money laundering. As online gambling platforms vie for supremacy, there is growing concern among people in the addiction field that the companies have little incentive to prioritize the policing of their sites over the pursuit of profits.
"The operators have enormous amounts of information and enormous power," Whyte said. "And they have very little obligation to be transparent about how they make these decisions, which in some cases involve millions of dollars and life-threatening situations."
A recent episode at the DraftKings sports betting site appears to underscore such concerns.
Last December, a man from New Jersey had reached his DraftKings monthly deposit limit but wanted to keep gambling, according to internal emails obtained by NBC News.
He was not your average player. By then, the man had gambled more than $1.9 million since January, according to the emails, playing mostly blackjack.
All such requests go through a DraftKings team responsible for monitoring player accounts. When it was brought to a manager's attention on Dec. 19, the manager saw red flags, according to emails viewed by NBC News.
A review of the player's financial statements showed that he had made large — and untraceable — cash deposits into his bank accounts. In addition, his balances were precariously low due to paying off credit card debts and spending at gambling sites, according to the emails.
The manager denied the request. She later explained in an email that she suspected the player may be using the site to launder money. She also noted that his account had been twice suspended after he made comments indicating that he had a gambling problem.
But the next day, a supervisor reported that the decision had been overturned. "The case was escalated for review and approved for a temporary increase of $22K," the supervisor said in an email obtained by NBC News.
A former DraftKings employee in the compliance division told NBC News that they reported the incident to the New Jersey Division of Gaming Enforcement among a host of other issues they found troubling.
The former employee said higher-ups were increasingly overlooking potential money laundering cases and overturning decisions to freeze accounts after the accounts' owners gave statements indicating they had a gambling problem.
"They really got aggressive the last six months I was there about us being too much of a friction point for the customers," the former employee said.
In a March email to the New Jersey Division of Gaming Enforcement, the former DraftKings employee wrote: "I really encourage the DGE to audit DraftKings for its practices, as I believe there are many conflicts of interest within our operations that are allowing for irresponsible gaming, potential money laundering, and negligence towards the consumers that use the platform."
Sabrina Macias, vice president of corporate communications at DraftKings, did not respond to specific questions about the handling of the New Jersey man's account. But she said the company "takes responsible gaming very seriously" and she described the December episode as an example of DraftKings employing multiple layers of review when issues arise.
"In its entirety, the specific customer interaction referenced is an example of DraftKings' multistep process through various departments and reviews, all of whom are accountable for the safety and experience of our customers," Macias said.
"In a regulated system such as ours, there are many checkpoints put in place by each operator and regulators to ensure that cases are properly investigated and documented," she added. "It is in our best interest as an operator to ensure that consumers who may fall into a problem gambling category have the intervention and resources that they need."
A spokesperson for the New Jersey Division of Gaming Enforcement declined to comment.
Record revenues
Sports betting in the U.S. generated record revenue of $1.5 billion in 2020, up 69 percent from last year, according to the American Gaming Association. In the first quarter of this year, sports betting revenues increased 270 percent from last year, another record.
DraftKings' revenue soared to $644 million in 2020, up 49 percent from the 2019 total of $432 million.
Online casino gaming, now legal in six states, is also booming. In the first quarter of 2021, games like online blackjack and slots generated triple the revenue from the same period last year, according to the American Gaming Association.
As states reap the benefits of legal gambling with soaring tax revenue, nonprofit organizations designed to help problem gamblers remain chronically underfunded, officials say.
Delaware is one of the leading states in terms of gambling addiction funding per capita - with about $1.46 allocated for each resident - but it is among a group that have provided no additional addiction funding after legalizing sports betting.
"To not have any additional funds when opportunities to gamble have expanded so substantially is crazy," said Jeff Wasserman, judicial outreach and development director for the Delaware Council on Gambling Problems.
Wasserman, 65, knows the importance of addiction resources firsthand.
Jeff Wasserman, a recovering gambling addict poses at the Delaware Council on Gambling Problems in Wilmington, on Oct. 23, 2018.Mike Wood / Reuters file
A former lawyer, his gambling addiction drove him to the brink of suicide in 2015. But Wasserman, who mostly gambled at brick-and-mortar casinos, ultimately managed to quit with the help of a gambling addiction specialist and the Delaware Council on Gambling Problems, which covered the costs of the sessions.
"I can't even imagine if I was still gambling now what it would be like to have it at my fingertips," Wasserman said. "I did a pretty good job of wrecking my life and that of my loved ones just gambling mostly at casinos."
Gambling industry insiders note that Americans have been betting on sports for decades through unregulated offshore sites.
Casey Clark, senior vice president of strategic communications at the American Gaming Association, said the rise of the legal market has created a landscape where problem gamblers are more likely to be identified and have better access to addiction resources.
The companies operating legally in the U.S. post phone numbers to hotlines for problem gambling, provide ways for customers to lock in deposit limits and restrict their playing, and employ staff responsible for identifying players gambling beyond their means.
"There's certainly a lot more protection in the marketplace today than there ever existed in this country before," Clark said. "There are a lot more people engaging in sports betting, but now you see millions of Americans, who were only able to bet illegally, transition to a market where there's a lot more visibility and certainly better protections."
'A hidden addiction'
Gambling tends to receive little attention compared to other addictions. School programs that focus on alcohol and drugs rarely address it, experts say, and there are only a handful of gambling-specific treatment centers in the U.S.
By some estimates, roughly 1 percent of American adults, or about 2.5 million people, have a severe gambling problem. But experts say it's difficult to put a precise number on it, in part because few seek treatment and the addiction, unlike alcohol and drugs, produces no physical signs.
"Gambling is a hidden addiction," said Neva Pryor, executive director at the Council on Compulsive Gambling of New Jersey. "You're not going to see anybody staggering around outside because they spent too much money. You're not going to see track marks from people gambling too much."
The vast majority of people who gamble don't develop a problem, experts say, but the rise of legal sports betting has led to concerns that a new wave of younger people will become addicted. According to a survey commissioned by the National Council on Problem Gambling, people who bet on sports exhibited significantly higher levels of problematic gambling than other gamblers, and younger people tend to be at a higher risk of addiction.
People who call gambling disorder help lines tend to do so only after years of battling the addiction, experts say. But help lines in at least 10 states have received a sharp uptick in calls from gamblers in their 20s and early 30s since January 2020, according to Janet Miller, executive director of the Louisiana Association of Compulsive Gambling, which oversees the help lines in 21 states.
Calls to the West Virginia hotline for problem gamblers have grown more dire since early last year, said Jennifer Davis Walton, director of gambling addiction services for the organization that runs it, First Choice Services.
"Our calls are more intense, meaning that they have hit rock bottom quick," said Walton. "It's people contemplating suicide. We've gotten those before, but now it's more often that people are just at their very, very end and it's because they can do it all the time and anywhere."
Multiple people battling a gambling problem told NBC News that the pandemic exacerbated their playing.
Mitch was an 18-year-old college freshman in California when he began placing bets on UFC fights. The wagers were small — $20 here, $50 there. His gambling largely remained that way for the next few years, a fun and harmless activity shared with friends.
Then the pandemic struck. Mitch, now a 21-year-old senior, was forced to move home. It didn't take long before the walls started to feel like they were closing in. He needed an escape, and he soon found it in the intoxicating world of online blackjack and poker.
"It was so easy to play, right there on your phone," said Mitch, who asked to be identified only by his first name because no one in his family knows about his gambling problem.
Once he started, he couldn't stop. Mitch said he holed up in his bedroom and gambled online for several hours each day. He lost interest in his schoolwork, his friends, his health.
"Blackjack really put a hole in my soul," said Mitch, who estimates he lost about $3,000 from last October to this March. "There was nothing else I wanted to do other than gamble. I had no control around it, and that's how I knew I was addicted."
He managed to stop playing in March and now feels like he has regained control of his life. "I actually feel lucky," he said. "I caught it early."
The Rhode Island man — with the Fortune-500 job and the young daughter — has also managed to quell his addiction, for now at least.
On the night of March 19, he was scrolling through a Reddit forum devoted to people with gambling problems and saw a link to a Gamblers Anonymous meeting. He joined the meeting while it was already in progress.
"I was greeted by a group of welcoming people who asked me if I wanted to share my story," the man said. "I cried like a baby. I could barely speak."
He has since attended a meeting nearly every day and now has a sponsor. Still, it's difficult for him not to dwell on all that gambling has taken away from him.
"It's astonishing how quickly things can spin out of control," he said.
"It's the invisible disease," he added. "I've walked around for years with a smile on my face and I'm in pain."
The man said he wanted to tell his story in the hope that it would serve as a cautionary tale for others.
"It's very easy once you fall into the trap to be subconsciously blind to your problem," the man said.
"If you're a compulsive gambler, you will not win on will power alone. You will go deeper and darker than you've ever imagined, and it takes a community of people to overcome this."
If you or someone you know has a gambling problem, call the National Problem Gambling Helpline at 1-800-522-4700, or go online at ncpgambling.org/chat.
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First rule of gambling:
Never bet what you can not afford to lose.
Second rule of gambling:
When you break open your kid's piggy bank with a hammer cover it with a pillow.
I've personally watched this happen during the pandemic. I watch many of the younger generations get their stimulus and unemployment monies, and gamble away on their phones or in the "Skills" machines found bout EVERYWHERE in my area. Practically every local bar, convenience store, gas station etc., all have these "Skills" video machines that most definitely ARE causing a gambling addiction problem. (Coming to your neighborhood soon, if not already there)