I think it would be easy to slough off this past Sunday’s episode of “60 Minutes” and its segment on sports betting. I also think that doing so would mean missing some potentially significant developments for the sports betting industry, even if we already knew about them.
“60 Minutes,” CBS' long-running TV news magazine, began its sports betting report by noting this coming Sunday’s Super Bowl will be played in Las Vegas, “a fitting venue given the prominent role gambling plays in sports today.”
Not too long after, correspondent Jon Wertheim states that “Americans have spent more than a quarter of a trillion dollars sports betting. That's the GDP of Greece.”
Never mind that Greece’s gross domestic product in 2022 was just shy of $218 billion, or less than 1% of the more than $25 trillion in economic output the U.S. created the same year, according to World Bank data. We’ve got the Super Bowl, in Las Vegas, and a boom in U.S. sports gambling. It’s an easy hook.
Americans have spent more than a quarter of a trillion dollars on sports betting. That’s the GDP of Greece. https://t.co/8amfHixDur pic.twitter.com/2LpBQGkVXz
— 60 Minutes (@60Minutes) February 5, 2024
From there, though, we’re hearing about more stuff we probably already know, even if we only know it intuitively.
There’s the importance of the 18-to-35 demographic of young men to the sports betting industry and how people within that demo are now gambling more than they should.
There are also nods toward technological advancements, how much more people can bet on, such as an obscure tennis match, and the new ways they can wager, such as via in-game microbetting on every pitch in a baseball game.
“Using algorithms powered by AI, DraftKings refreshes the odds constantly,” Wertheim states. “The common fan can't possibly calculate whether it's a good bet or bad bet, much less in real-time.”
I didn’t find this particularly shocking, but I’m also someone who works in the sports betting industry and who bets regularly. To me, this is just describing how the typical sports betting experience is now. It’s not sidling up to a bookie in a bar or even traveling to some casino to wager at a brick-and-mortar sportsbook; more likely, it’s going on a computer or phone and gambling there on whatever your heart desires.
To keep people betting, there are now wagers on every pitch, serve and snap in real-time. Using AI-powered algorithms, the odds change constantly. https://t.co/vTcEORDO3w pic.twitter.com/8LTOQvG8WR
— 60 Minutes (@60Minutes) February 5, 2024
That doesn’t mean what "60 Minutes" is saying isn’t important or isn’t news. Indeed, it’s likely important and news to somebody. I also think that it’s around this point of the “60 Minutes” segment that we start to hit on some interesting stuff concerning customer data and how it’s used.
We meet Matt Zarb-Cousin, “a leading gambling reformer” in the United Kingdom, who used public information laws to obtain data that Flutter Entertainment PLC, the parent company of FanDuel, had on a U.K.-based customer.
“That data was used to tailor offers and push notifications to keep the guy in action,” the report states.
Flutter told "60 Minutes" that they take steps to protect “vulnerable customers” and even ban them outright. DraftKings and FanDuel reportedly stressed similar points.
It’s still a troubling allegation, that online sportsbooks could collect data on customers and use the information to float inducements their way that may keep them gambling. That’s even as the companies claim to be a solution to “predatory” sportsbook behavior, which they did just last week in Hawaii, a state weighing whether to legalize sports betting.
The sports betting company Flutter told 60 Minutes that it takes steps to protect “vulnerable customers,” sometimes banning them outright. https://t.co/CqT21sAInL
— 60 Minutes (@60Minutes) February 5, 2024
“60 Minutes” doesn’t go so far as to suggest sports betting should be made illegal again in most states. It does, however, introduce us to the Northeastern University-based Public Health Advocacy Institute (PHAI), its associated Center for Public Health Litigation, and law professor Dick Daynard, an "architect of the first major lawsuits against the big tobacco companies."
PHAI and its litigation center filed a proposed class action lawsuit in Massachusetts in December against DraftKings over an allegedly misleading promotion in the Bay State. DraftKings disputes those allegations.
But this, we hear on "60 Minutes," is what will be the first in “a series” of lawsuits. The same folks are also pushing the U.S. Congress to intervene with federal regulations.
If you weren’t aware, "60 Minutes" is famous for a story (one its executive producer would later say was "mishandled"), regarding Big Tobacco whistleblower Jeffrey Wigand, who alleged his former company had long known its cigarettes were addictive.
Wigand’s whistleblowing helped inform Daynard’s work. Daynard then went on to say in a December press release, apropos of online gambling, that “massive advertising using unfair and deceptive promotions to hook customers on an addictive product bears an uncanny similarity to what the cigarette companies used to get away with.”
It's not normal for everybody
If you’re in the sports betting industry, I don’t think this is a spot you want to be in. Talk of big data and comparisons to big tobacco, broadcast by a big, prestigious name in news (ESPN also televised a multi-part “Outside The Lines” series on sports betting last week). And it’s why, I think, the “60 Minutes” segment may someday turn out to be foreshadowing.
There are arguments as to why sportsbook operators are doing the things they are doing. Advertising alerts the public to legal options to wager that are available to them. Promotions can pull users out of the unregulated market and into the regulated. Automation using data and artificial intelligence can reduce expenses and help drive revenue growth, and it can also help detect and deter problem gambling.
But just because it makes sense to someone like me doesn’t mean it makes sense to everyone or that it is good for customers and companies in the long run. Lawmakers and regulators across the U.S. are already stirring and revisiting their various rules for sports betting. A news report like we saw on Sunday could prompt further action.
"Safe to say," Wertheim says, "when the Supreme Court opened the floodgates to sports betting in 2018, it didn't anticipate AI-powered odds on every snap or tailored push notifications engineered to keep bettors betting."
At the very least, I think “60 Minutes” did well to remind us that the new normal in sports betting is not normal for everybody.
