Missouri, think about human cost of legal sports gambling

With the launch of legal sports betting in Kansas this past September, Missouri finds itself almost completely landlocked by states with legal betting. Only a minor travel inconvenience prevents Kansas Citians from moving across the border to place bets. This is one of the reasons that proponents of sports betting — such as state Sen. Denny Hoskins, whose bill S.B. 1 was pre-filed on Dec. 1 for the next legislative session — argue that it only makes sense for Missouri to keep that potential gaming revenue within its own borders.

While this may be the reason that Missouri ends up following suit with its neighbors, it is necessary for the state to be prepared for all of the collateral consequences that the new avenue of gambling could bring.

Kansas provides a useful precedent for Missourians to gauge the impact of sports betting legislation. During the first month of legal gaming in Kansas, the state reported a total of $160.5 million wagered with a revenue of $1.3 million, netting just $130,000 in taxes for the state. This amount (a revenue of 0.81% compared to total) is remarkably low, especially when compared to the average of 7.5% among other states. This deduction in revenue has been blamed on industry standard launch promotions, so Missourians should expect a slow return on the state’s investment as well.

But there is a reason why sportsbooks have no issue sacrificing profit during critical startup days in exchange for promotions targeting a wave of new players. These promotions often come in the form of so-called “free money” for new players to bet with — a cost that is insignificant to sportsbooks that stand to hook these new bettors for life, and often early in their lives compared to other forms of gambling.

According to the National Council on Problem Gambling, sports betting is the most popular form of gambling among young people age 14 to 22. The Associated Press reported that more than 80% of legal sports betting in the U.S. is done online. In addition, nearly 1 in 5 U.S. adults wagered on sports in the past year, according to a survey conducted by the Pew Research Center. These numbers show how the legalization of a more accessible form of gambling targets an expanded audience of young bettors, representing entirely new consequences of problem gambling.

Since Missouri should expect an obvious increase in addiction with the launch of a new form of gambling, it stands to reason that the state would be prepared for a greater allocation of resources to tackle the increased demand for counseling. In Kansas, however, only 2% of money generated from gambling is allocated to the Problem Gambling and Addictions Grant Fund, with only 7% of that total actually going to problem gambling services, averaging out to about $600,000 yearly.

In 2020, the National Council on Problem Gambling reported that the estimated social cost of problem gambling in Kansas is $879 million a year, resulting from effects such as bankruptcy, unemployment and crime. For reference, the state problem gambling fund spending $600,000 a year is 0.07% of the impact which it is intended to negate. Missourians should ask whether a similarly minuscule allocation would be sufficient for combating a new wave of addiction. Or — better — perhaps Missouri could break from this precedent and carve out larger allocations to problem gambling services proportionate to an increased demand.

Though none of these metrics can fully account for the individual human cost of sports betting, it is important to consider every consequence as the decision approaches. As lawmakers prepare a 2023 legalization push, Missouri may very well have no choice but to bring sports betting inside its own borders. With all the cards on the table, it is essential for Missourians to know the odds as they gamble big on sports betting.

Carter Groves is a student in the Master of Fine Arts program in Creative Writing at the University of Missouri.