Since the Supreme Court’s 2018 invalidation of the Professional and Amateur Sports Protection Act (PASPA), dozens of states have legalized sports betting.
Then came a rise in gambling hotline calls and suicide rates, the telltale signs of addiction. These effects are particularly pronounced among young, unmarried, less educated men, according to research by Brad Greenwood, professor of information systems and operations management at the Costello College of Business.
In a forthcoming Information Systems Research paper, Greenwood and his colleagues Gorkem Turgut Ozer at the University of New Hampshire and Anand Gopal at Nanyang Technical University, focus on the deleterious effects of online gambling manifested in addictions. They attempt to answer the question: Who pays the price when digitized sports gambling goes mainstream?
The study investigates the effects of legalization of both online and offline sports betting by examining changes in the number of calls to the National Problem Gambling Hotline and the number of suicides reported per state. The results show both increased gambling hotline calls and higher suicide rates in states that legalized online sports books by the time of the study’s completion. They reveal a 22.8 percent rise in calls to the National Problem Gambling Hotline, with no significant change when physical sports books were legalized.
“That effect appears to be uniquely digital,” says Greenwood, “we see no concomitant rise when physical sports books are legalized. And while interpreting a null result is challenging, we think that easier access to mobile and web-based sports-betting facilitates compulsive behavior and gambling addiction.”
“The paper looks to the rollout in individual states and their decision statutorily to legalize sports betting online, in person, both, or neither. For example, Virginia has legalized online betting, but not in-person betting. We then compared changes at the societal level in the states that had legalized the various different combinations and exploited the difference in the timing of when the two kinds of betting were rolled out. I think, that's where the paper differentiates itself from other gambling literature,” Greenwood says.
Gamified elements of digital betting represent an important factor that leads to increased addictiveness of the habit. Gaming apps make it easier for participants to place bets not only on a game’s outcome but also on uncorrelated outcomes, such as a coin toss or a player’s foul count. Known as proposition bets, they enhance the appeal of gaming and increase its addictive nature, the paper argues.
According to Greenwood, “the way the apps are designed, with intermittent reinforcement between highs and lows and added social validation, it is easy to see how they become addictive.” The fact that the suicide effect is concentrated among young, unmarried men may be indicative of a problem among college students, although further evidence is needed.
The states’ economic benefits of legalization of the sports betting industry since PASPA was struck down have been significant. Nationwide sports betting revenue grew by 44.5 percent in 2023, increasing to $13.7 billion in 2024, with total wagers reaching $119.84 billion. By the time the study was completed in June 2024, the market had grown by nearly 27 percent annually since 2018. As to the effect of this change on mental health, further research is required to understand it better. With gambling carrying the highest suicide rate of any addiction disorder, the study’s findings raise alarm about the surge in mobile and web-based sports betting, linking its popularity to gamification.
The paper concludes that policymakers need to counterbalance the welfare gains from increased spending with human costs. “If they're going to legalize this type of betting, policymakers should be informed and devote resources to mental health issues,” Greenwood argues. “Although the downstream negative effects are harder to measure, we contend that policymakers should be aware of these problems and allocate resources to mitigate mental health issues in the states where the practice is introduced.”
The authors suggest that these funds should be directed to train mental health providers on recognizing and treating digital gambling addiction, to educate young people about the addictive nature of gamified betting, and to provide information about resources that help combat gaming addiction.
This represents challenging implications for policymakers. Individual legislative records could shed more light on the way published studies may affect legislative decisions, but so far there is little evidence that they are having a major effect. “Horror stories of gambling pop up pretty frequently in the popular press. But it doesn't seem like it's slowing the legalization down,” Greenwood said.