Gamifying Sports — Sports Betting & its Implications.

Gambling is older than its close cousin, the futures market, yet ironically unlike the latter, sports betting has been banned in the United States since 1992. Industry participation was stymied by the Professional and Amateur Protection Act— a law dating 1992 that forbade the lower 49 states (with the exception of Nevada) [1] from sports gambling. Once considered taboo industry, today sports gambling is legal in 30 states — an effort duley imparted by New Jersey’s lobbying efforts. Moreover, it is predicted that 50 million Americans will participate in a wager this year, accounting for roughly 20% of the American adult population. Ironically, football is America’s favorite past time, thus making gambling our favorite vice. Per PRNewswire, the sports gambling subindustry is expected to realize a $106.5 billion market cap by 2025.

To contextualize sports betting’s meteoric growth, Bitcoin took nine years to surpass a 100bn market cap, having occured in 2017. [3]

As football NFL viewership and popularity increase, one can also expect an increase in gambling. But, transversely, the gambling market is cash intensive and privty to market forces, so an industry specific downturn could occur during economic turbulance, while leaving spectator viewership unaffected.

Although becoming a pro football player or team owner may be out of the realm of one’s possibility, the ability to participate as one is gamified through betting and fantasy teams. As a result, the industry has the opportunity to convert casual viewers into beloving fans as gambling and sporting events become synonymous.

It can be argued that some may misconstrue the speculative nature of sports betting as — erm — ‘an investment’. The misunderstanding could be financially devastating to families and communities — especially in areas where fiscal education is not taught. A financially illiterate population, the ubiquitous presence of sporting, and the easy access to mobile gambling could potentiate addiction rates and further poverty.

On the other hand, supply will always meet demand — regardless of regulation. Thus legal restrictions work in veil, because banned substances/activities will find homage in the illicit markets. Unfortunately, today, social purism has stigmatized gambling, relegating it to the shadowy black markets. Accordingly, this then segues to violent crime, as underground organizations cannot leverage the legal system to enforce contractual obligations. For example, suppose a bookie lost money on a deficit ‘john’; what is he to do? The legal system would not help recuperate his contract, since his proceeds come from illicit activity. Thus, presumably the bookie would have to resort to enforcing his accord. Unfortunately, recuperating gambling debts sometimes involve forced coercion or even indentured servitude. However, and fortunately, the new legal market forgoes most of the black-market misgivings.

Now suppose the gaming industry adopted big-tobacco’s advertising methodology and encouraged teenagers to gamble their money. Encouringing the youth to addictive things is bad. And I personally would then consider the industry exploitive. Till then, lets see how the transition from black to white market fare.

Adel Al-Aali

Sources:

[1] Cornell University: Professional and Amateur Sports Protection https://www.law.cornell.edu/uscode/text/28/part-VI/chapter-178

[2] MarketWatch: Supreme Court Opens Door To Sports Betting Across The Nation. https://www.marketwatch.com/story/supreme-court-opens-door-to-sports-betting-across-the-nation-2018-05-14?mod=article_inline

[3] PRNewswire: Sports Betting Market Size to Grow by 106.5 Bn 2025 https://www.prnewswire.com/news-releases/sports-betting-market-size-to-grow-by-usd-106-25-billion--by-platform-offline-and-online-geography-apac-europe-north-america-south-america-and-mea-and-segment-forecasts-2021---2025--301497480.html

[4] Forbes: Bitcoins Marketcap is now More than 100-Billion https://www.forbes.com/sites/cbovaird/2017/10/20/bitcoins-market-cap-is-now-more-than-100-billion/?sh=ce2cbd22b8bc

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