The problem with the media parroting regulation

The September 2021 issue of Sports Illustrated was focused almost exclusively on online gambling and prominent announcements of their upcoming sportsbook. It should then come as a surprise to no one that their writers have all neatly aligned behind the new narratives associated with the push for online gambling regulation. Many of those outside of gambling will likely think that in an industry where users are so often taken advantage of would welcome regulation with open arms, but under the surface it’s not so simple and certainly not just a binary choice between regulated and unregulated.

While it was once a dream for the vast majority of bettors in the early days of online gambling, the countries where regulations are the oldest and most developed have been showing signs of serious fundamental faults for quite some time now. Their answers to these have mainly boiled down to tightening regulations and throwing ever more money at the problem. This has created a rather hostile climate for both small and new operators, stifles innovation, greatly increases overhead costs, and a wide range of other issues. Bettors are left to choose between only a few giant networks who are largely uncompetitive and almost singularly focused on ways to squeeze more profit by increasing their margins and more indirectly through certain kinds of prop bets (-110 or worse on a Super Bowl coin toss, anyone?).

With that said, it should be clear that the staff of SI had plenty of interesting things to dig into on their deep dive but chose not to. For issues like problem gambling which has become too politicized and widely covered to ignore, they simply tout the massive amounts of funding that has gone to two organizations in the UK and Australia. What they leave out is that the actual effectiveness of these operations is rather unclear, and there have been very few legitimately objective attempts to even measure if their positive impact is enough to justify such exorbitant and rapidly increasing amounts of funding. The studies have almost exclusively been done by groups and individuals who stand to gain from the increased funding, and many in their movement still believe that outright gambling prohibition is a realistic solution. There is also the issue of these groups becoming increasingly politicized themselves and largely aligning to more general partisan narratives, which leads one to wonder whether or not any of the funding is being used more for political purposes than what it should be intended for.

At the very core for them though is the long-debated issue of the integrity of the game. After many decades of presenting this issue as a deal-breaker for any kind of large-scale sports betting, with the recent repeal of PASPA and the opportunity to make money with their own sportsbook they’ve had to make the jump to the other side of the argument. Their solution to this? Why of course it’s to introduce all sorts of new regulations and shovel even more piles of money into the regulatory furnace. To their credit though, they highlight mistakes made in the past with dehumanizing and yet largely ineffective restrictions on players and the often extreme punishments that go along with them. They also reveal some real truth in that the major leagues already have become quite adept at spotting abnormalities out of a sheer sense of self-preservation, which already carries far more motivation than any outside funding could hope to provide. The same holds true for most of the players themselves, and history has shown that when the majority of these did bet it was either on their team to win or simply on an unrelated sport or game. The cost of integrity fees would ultimately get passed down to the bettors, along with all of these other giveaways which serve to grease the wheels of an overly complex regulatory machine that seems to have become more about limiting competition among operators rather than any real net benefits to end-users.

Perhaps the most effective and interesting thing from all of it was some mention of the benefits of transparency in helping to mitigate many problems in the industry. It is disappointing though that it wasn’t expanded on, especially given the great potential it has in helping across a broad spectrum of issues. It leads one to question exactly how transparent these vast private companies will be, and to whom. I simply can’t see it coming anywhere close to the transparency of a public blockchain for instance, there will be a great deal left behind the curtain. With how carefully that major outlets are now covering this industry in order to maintain certain narratives, it remains difficult for one to expect straight answers from them even after this recent reversal.