Matt Lucky reviews Jonathan D. Cohen’s new book, Losing Big: America’s Reckless Bet on Sports Gambling.
In the penultimate chapter of The Prince, Niccolò Machiavelli admonishes readers against a fatalistic spirit he observed taking hold of 16th-century Italy. Events were so chaotic in the divided peninsula beset by recurring invasions and wars that human enterprise appeared ineffectual, and thus many resigned their lives to the whims of seemingly omnipotent fortune. Today, Jonathan Cohen in Losing Big: America’s Reckless Bet on Sports Gambling observes a similar fatalistic mindset ensnaring young Americans who view the economy as rigged and the world driven by a ceaseless train of crises. For those struggling in an economy that offers seemingly no “realistic possibility of saving up to buy a home, start a business, or pay off their student loans…gambling presents a seemingly rational alternative way to try and get rich.” For many Americans, and especially young Gen-Z men, surrendering to fate and betting it all on the Chicago Bears appears as rational, if not more so, as betting that a steady 9-5 job will bring personal prosperity.
In Losing Big, Cohen examines the contemporary national embrace of ubiquitous gambling: one can now bet on sports, game shows, even political events through platforms like DraftKings and Kalshi. The recent proliferation of legal gambling began with the sports industry after the Supreme Court legalized it in its 2018 decision Murphy v NCAA. Prior to that decision, sports gamblers either had to travel to Nevada, find a local illegal bookie, or gamble through offshore Caribbean websites.
Legal gambling is not in itself a new phenomenon in the United States. Cohen traces betting in the American experience back to the early Southern colonies, though he also narrates the first prohibitions of it in the Puritan Northeast. For centuries, American local and state governments have turned to legalizing gambling as an easy revenue source, one much more digestible to constituents than rises in general taxes. The most obvious example, as Cohen recounts in his previous book, For a Dollar and a Dream, is state lotteries. In an amusing bit of creativity, New Hampshire in the 1960s exploited a federal statute that permitted gambling on horse races to raise revenue through a state lottery tied to thoroughbred racing.
Cohen expresses less moral concern about the right of the sports-betting industry to exist than the Puritans, but his central argument is that its contemporary business models are designed to harm Americans most vulnerable to what he calls problematic gambling. This includes behaviors such as compulsively chasing losses, lying to friends and family about gambling habits, and committing illegal acts to finance gambling. Reform and regulation is necessary, but run up against industry lobbying and advertising.
Cohen presents Colorado as a case study of how these issues of government finances, personal choice, industry influence, and regulation (or the lack thereof) are producing the legal sports-gambling industry following Murphy. The story begins with state representative Alec Garnett, who was personally excited to bet legally on the Denver Broncos in the aftermath of Murphy. Proponents of legalizing gambling enlisted the support of brick-and-mortar casinos by promising a cut of the sportsbetting pie through mandatory licensing agreements. The eventual bill, HB19-1327, easily passed through both legislative chambers with an overwhelming bipartisan majority with promises of easy revenue to support Colorado’s infrastructure projects, particularly its water system (always an important issue for Southwestern states). However, the bill also had to pass a public referendum, which it did only with a narrorow 51.4% of the vote. The public vote fell along partisan lines, with urban Democrats in favor and rural Republicans in opposition. Cohen notes that the referendum nearly failed even with promises to invest revenue in infrastructure and without any organized opposition campaign.
Cohen describes the regulatory process following the referendum as one operating under a total “absence of adult supervision.” The gambling industry went virtually unopposed as it helped write the rules to govern gambling in Colorado. They were able to keep their tax rate low at 10%, gain a tax exemption on promotional first bets, set a generous cap on the total number of state licenses, and place few restrictions on advertising. Cohen concludes that “gaming interests got the rules they wanted not through subterfuge or regulatory capture, but because the state’s gaming officials, like its lawmakers, had a vision for sports betting fundamentally aligned with the industry.” While Cohen can cite that 66% of Americans support legal sports betting as of a 2022 Washington Post-University of Maryland Poll, in Colorado, at least, we see political elites collaborating with the gambling industry to foist vices on a less-than-willing public for the sake of revenue.
How legal gambling platforms are designed to harm Americans
To illustrate the personal impact of gambling addictions, Cohen supplies the portraits of two actual young men, Kyle and Andrew. The latter receives a dedicated chapter that recounts how he lost more than $300k over the course of his struggle with gambling. Andrew “would bet in the shower. He would bet while driving. Betting became his reason to wake up in the morning.” His romantic partner, family, work, and everything were shunted to the side as sports betting colonized his life. Gambling is properly understood as an addiction, Cohen instructs readers, and is categorized in the fifth edition of the American Psychiatric Association’s Diagnostic and Statistical Manual of Mental Disorders alongside substance abuse disorders like alcohol and drug addictions. The brains of problem gamblers become restructured so that they release far more dopamine in the moments of high uncertainty before the outcome of a gamble is settled, and “these instances provide the rush and the fleeting pleasure/pain equilibrium to which problem gamblers are addicted.”
The design of gambling apps, fusing lessons from slot machines and social media apps, offers affordances that facilitate problem gambling. Some of this is the predictable, prominently placed targeted bets for a gambler’s preferred teams, followed by an endless scroll of betting options. That long tail of gambling options enables problem gambling for people who are not simply excited for the Bears game but who need their fix from something at 3 am. Problem gamblers “are seeking action wherever they can find it,” Cohen articulates, and “they would bet on a coin flip if they could—and Kyle describes his late-night betting on minor league British darts as effectively doing this.” Effectively infinite gambling options for obscure sports only make sense as an app feature to entrap problem gamblers.
On the flip side, there are many design features that sports betting apps do not implement that could arrest gambling addictions. These apps have extensive information on gamblers’ usage patterns, which can identify people with problems. Cohen notes that by far the best indicator of problem gambling is the frequency of deposits to an account (a high frequency indicating someone is compulsively chasing losses), followed by the percentage of their bets placed on days other than Saturday. DraftKings and FanDuel, two popular sports-gambling platforms, could employ user data to flag these people early for interventions, but they simply do not. Tellingly, the primary individuals who are excluded from gambling apps are those who demonstrate a pattern of winning too often. Place too many correct bets, and the platforms will kick you off (no accusations of cheating required). Cohen reports that some such successful “professional bettors purposefully engage in betting behaviors that make them look irresponsible, such as logging in at odd hours.” That is, they have reasoned that their accounts will not be banned for winning as quickly if they also appear addicted to gambling, according to the algorithm.
In discussing potential remedies to problem gambling, Cohen reviews two competing frameworks. The first is a responsible gambling (RG) model favored by the industry that calls for individual self-discipline to moderate gambling. This is an anti-regulatory rhetorical gambit that places the obligation to act on consumers while absolving the industry of the need to amend its practices. The rhetoric employed for RG is strikingly similar to that deployed by social media companies regarding responsible usage of screentime to place the burden of moderation on users rather than corporations. Journalist Johann Hari describes this rhetoric as “cruel optimism,” in that it promises there are solutions to your problems, but the demands fall all on isolated individuals rather than the industry.
The industry does offer a number of features users can employ to facilitate responsible gambling, but their usage statistics reveal these to be mere fig leaves. For instance, according to Cohen, “DraftKings reported 0.1 percent of players set a time limit for app use, 0.13 percent set a spending limit, 1.4 percent had used a “cool-off” period, and a whopping 2.3 percent had set a deposit limit.” RG is clearly ineffective for any purpose beyond affording the industry rhetorical cover. What is more, Cohen argues that since the industry is so reliant on problem gamblers for the bulk of their revenue, if RG tools were actually in wider spread use, that would endanger the business model. Five percent of betters account for 70% of the sports-betting industry’s revenue.
The alternative approach would be to adopt a public health framework that demands structural solutions similar to how we address addictive substances. Cohen offers a variety of reforms in Losing Big, yet he has also appeared ambivalent on their ameliorative prospects in writing elsewhere. Among the options that might be ventured would be limitations on the ubiquitous advertising for sports betting and inducing these firms to deploy their surveillance tools to limit, rather than exacerbate, problem gambling when detected. Likewise, eliminating highly obscure betting opportunities that appeal only to addicts, such as betting on “Malaysian women’s doubles badminton at four in the morning,” creating a national self-exclusion list, limiting the deposits a person can make in a 24-hour period, and preemptively banning the use of artificial intelligence systems to further target problem gamblers are all presented as options.
A complication for Cohen’s thesis is that regulating sports betting may do little in a world where gambling has broken containment beyond sports. Prediction markets Kalshi and Polymarket are attempting to incorporate gambling into every facet of the human lifeworld possible. Kalshi’s CEO has articulated that his long-term goal is to “financialize everything and create a tradable asset out of any difference in opinion.” These prediction markets indeed are propagating new broadcasts and award shows, not to mention their alleged use for insider trading on major geopolitical events.
Nominally, both Kalshi and Polymarket facilitate trading for event contracts, rather than the pure gambling offered by sportsbooks such as FanDuel, though the substantive distinction here appears vacuous. If we quickly cast our gaze further, we can identify the gambling contagion spreading through society through cryptocurrency speculators and randomized rewards unlocked by real cash in video games. The most lurid example may be the crisis of middle schoolers becoming addicted to gambling in offshore online casinos by way of the videogame Counter-Strike. Regulating sports betting more stringently even as gambling proliferates to every other facet of society appears to be like cutting off one head of a hydra and declaring “mission accomplished!”
Another point of broader social interest in this narrative is the mutual influence between the gambling and technology industries. Casinos have long pioneered the use of sophisticated design methods in slot machines to extract time and revenue from gamblers. The architecture of gambling floors, lighting, ergonomics of pulling the slot machine lever, visual/sound feedback, payout frequency, etc., are all deployed with precision to maximize “time on device,” the same metric of success also used for social media apps. Indeed, Adam Alter contends that many of the design lessons discovered by the gambling industry have been folded into the design of Big Tech. Tim Wu’s recent Age of Extraction (reviewed here at ProMarket) similarly argues that digital platforms leverage variable reward schedules in their design to provide the same dopamine hit for surprising outcomes as gambling. The chance that a social media algorithm sends a user’s post or video viral, however small, engages the user’s brain the same way a slot machine does.
Even when you are not betting money on your smartphone, there is a good chance you are engaging with an app whose design was in part inspired by gambling. The gambling industry is far too colossal to be described as a “tip of an iceberg,” yet given the considerations above, I think it is fair to say that Cohen is elucidating the leading edge of a broader phenomenon of digital technologies that become ever more effective at targeting the bottom of human brainstems.
Ultimately, Cohen crafts an affecting portrait of the social harms of the hasty rollout of sports gambling nationally in the U.S. and offers a compelling case for the necessity of changes to mitigate the risks of problem gambling. That said, the practical limits of reform are unclear, and any reforms will have to survive the lobbyists of a now very well-funded industry. If sports betting remains legal, the best we might hope for is an industry akin to alcohol, where the majority of the public partakes in moderation while a few indulge to the point of harm. That would suit the gambling industry just fine. Then again, perhaps I am likewise falling into the trap of fatalistic thinking regarding the prospects of reform for this industry.
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Articles represent the opinions of their writers, not necessarily those of the University of Chicago, the Booth School of Business, or its faculty.
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