One in five Americans has created an online sports betting account in the seven years since the Supreme Court ruled states can legalize sports betting. For men between ages 18 and 50, that number is double. Sports betting access is at an all time high and taboo at an all time low — the thrilling promise of a winning bet is always just a few clicks away.
Illinois’ diehard sports fans have embraced online sports gambling with the same enthusiasm they show for their favorite teams. The state legalized sports gambling in 2019 with the passage of the Illinois Sports Wagering Act. It now comprises the third largest sports betting market in the country, behind only New York and New Jersey. In 2023, Illinois consumers bet $11.6 billion on sports.
Advocates of legalization tout the entertainment value and public revenue generated as proof of its benefits. But as researchers have gotten time to study the issue, its serious harms have become impossible to ignore. To protect consumers from the deleterious fiscal and social consequences of online sports betting, Illinois policymakers must act and impose a ban.
Online operators exploit behavioral biases — anchoring, overconfidence, the gambler’s fallacy — to coax consumers into wagering more than they intended. Stanford economistsestimate behavioral biases are responsible for over 8% of what online sports gamblers wager. Moreover, online sports gambling is highly accessible, available to anyone with a smartphone at any time. Online sports books rely heavily on aggressive marketing and promotions, familiar to any modern sports fan who is inundated by them whenever they watch a game on tv or in person. Odds are priced in confusing ways that require bettors to perform mental math to reveal the true price.
The results are predictably disastrous for the finances of bettors. A flurry of academic studies were released last year showing that consumers in states that legalized sports betting had less savings, more excessive debt, and overall worse financial health. One study estimated that annual net savings and investment falls by $144 per household after legalization. A back of the envelope calculation suggests that Illinois lost $730 million in 2023 that could have gone to college savings, retirement accounts, or small business investment because of legalized sports gambling. Dwarfing the $150 million the state collected in tax receipts from sportsbooks.
Even Illinoisans who don’t participate in online sports betting feel the squeeze. Researchers at UCLA and USC have shown that banks have tightened credit limits and lending standards on all consumers in states that have legalized online sports gambling to account for the extra risk presented by the abundance of betting. Meanwhile, public resources — counseling, fiscal support, family services — strain under the weight of problem gambling, eroding the very tax revenues that boosters tout.
The fallout extends to a myriad of negative social effects from gambling. Beneath the ledger lines lie deeper wounds: addiction, deteriorating mental health, spikes in domestic violence, and harassment of athletes. These harms ripple through families and communities, exacting a human toll that far outweighs any fleeting thrill of the wager.
Policymakers need to act to address the unique dangers online sports gambling poses.
The gaming industry champions “behavioral interventions” — self‐imposed limits, self‐exclusion tools, pop‐up warnings — that shift the onus onto individual gamblers. But evidence of their effectiveness is scant. With algorithms designed to keep users hooked, these minimalist safeguards resemble putting a Band-Aid on a gaping wound.
Legislators attempted to slow the growth of online sports gambling by raising the tax on sportsbooks in Illinois last year. Almost a year in and it is clear that taxation has failed. The amount bet on sports has continued to grow even after the tax went into effect last July.
The only way to ensure Illinoisans are properly protected from exploitation is through a ban of online sports gambling. Without easy access, many with a limited attachment to sports gambling may simply choose not to participate; and those that continue to do so will be in an environment that will promote healthier choices. Absent a ban, online sports betting will continue to lead to worse financial outcomes for all Illinoisans.
The fight for such a ban will certainly be a challenge. Deep pockets and political influence have ensured sportsbooks a powerful seat at the table. Yet if Governor Pritzker and the legislature are earnest in their claims to be progressive consumer advocates, they should welcome the battle for public well-being over algorithm-driven profit. Illinois shouldn’t balance its budget through an industry exploiting its citizens’ love for its pastimes.
Daniel Koslovsky and Prabhdeen Kaur are students at the University of Chicago’s Harris School of Public Policy.
