December 7, 2022

Caesars, MGM and DraftKings should be wary of this NFL season

Gambling is a complicated problem in America.

The practice is legal at the federal level in the United States, but heavy state-level restrictions limit the reach of the gambling industry in the states.

Only two states, Nevada and Louisiana, allow casino-style gambling statewide. Other states like Maryland and New York allow casinos in certain jurisdictions, and other states like North Carolina and Connecticut offer them on tribal land.

But states that don’t allow casinos aren’t opposed to all forms of betting, as 45 states (plus Washington, DC, Puerto Rico, and the US Virgin Islands) have state-sanctioned lotteries.

Online sports betting has exploded in popularity since the United States Supreme Court struck down the PASPA (Professional and Amateur Sports Protection Act) four years ago and we are only just beginning to learn more about the demographics of people who participate in this new form of gambling.

Richer and more worried

Mobile sports bettors tend to be wealthier than the general population, with 54% earning $100,000 or more a year, according to a new survey from credit reporting agency TransUnion.

But while the majority of online sports bettors appear to have a solid financial footing based on their income and savings, a higher percentage of the nearly 3,000 gamblers surveyed also said they struggled to pay their bills and use short-term credit services like payday loans, compared to the general population.

“On the face of it, most consumers who engage in mobile sports betting can probably afford to do so,” said Declan Raines, head of US gaming at TransUnion.

“At the same time, our results demonstrate how important it is, especially in times of economic uncertainty, that carriers use comprehensive data to identify both resilient and struggling consumers.”

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Nearly 70% of mobile sports bettors saw their income increase in the previous three months, compared to 32% of the total population.

On the other hand, 79% of mobile sports bettors worry about their ability to pay their current bills and loans in full, compared to only 52% of the population.

This uncertainty translates into more timidity when it comes to placing bets.

“You certainly see the intention to change their spending habits in line with inflation. The ability to pay loans and bills. Consumers are likely to move away from discretionary activities in the current environment,” said Raines at TheStreet.

This could be bad news for online gaming platforms like Drafkings (DKNG) BeMGM (MGM) Caesars (CZR) and Stool (PENN) .

Disadvantage of the game

Online sports betting has some pitfalls that bettors should be aware of.

“Many mobile sports betting websites and apps allow credit card deposits, a form of high-interest revolving credit, so it’s imperative that sports bettors understand how to gamble responsibly,” TransUnion said. .

The fundamental rule of any game of chance is that the house always wins and the truism can bring out the worst in people with addictive personalities.

“People with gambling problems often have many of the same risk factors that predispose individuals to other addictive behaviors,” said the National Responsible Gambling Center said.

Overall, men tend to spend more money on gambling than women. And while people in higher socioeconomic groups tend to spend more money on gambling, those with lower incomes spend a higher percentage of their income on gambling, according to recent studies.