Nascent Beginnings of the Long-Term Consequences of the Sports Betting Sector
On 14 May 2018, the U.S. Supreme Court struck down the Professional and Amateur Sports Betting Act of 1992 (PASPA). PAPSA had previously outlawed sports betting across the country, save for a few jurisdictions. Sevens months later, sports gambling markets had rapidly expanded across thirty-eight states. Since then, the American online sports betting industry has been booming. The total sports bets placed in the U.S. in 2023 reached about $120 billion, with the industry itself raking in about $11 billion that year.
Unsurprisingly following suit, the Canadian federal government passed Bill C-218 in the summer of 2021, an Act which amended the Criminal Code and decriminalized betting on single sporting events. Following decriminalization, Ontario launched its own regulated market a year later. The Alcohol and Gaming Commission of Ontario (AGCO) created iGaming Ontario, a subsidiary of the commission, which enables private firms to operate as contractors for the government. If you watch televised sports, you are probably already familiar with many of the big names from their rapid proliferation inside both live and televised games, such as Bet99, DraftKings, and FanDuel.
However, like the parallel rapid Canadian expansion to that of the U.S. markets, we can expect much of the same fallout to the sports betting boom as that of our Southern counterparts. In the United States, alongside the rise of sports betting, there have been corresponding detrimental impacts on consumer financial health, which have hit vulnerable households the hardest. A study following the U.S.’ 2018 Supreme Court decision revealed an average decrease in average credit scores in states that had legalized sports betting. The study concluded that this nationwide decline in credit score was associated with changes in indicators of excessive debt, including a substantial increase in average bankruptcy rates, debt sent to collections, use of debt consolidation loans, and auto loan delinquencies. Concerningly, the rise of these gambling-related debts concentrates around financially unstable households. Another 2024 study indicated that households with below median savings allocated close to twice their quarterly income to betting when compared to bettors with above median savings, exhaust more of their credit availability, reduce their credit card payments, and increase their account overdrafts. These studies reveal that the expansion of the sports betting market negatively impacts those who are already the weakest financially in our society.
It is unlikely that our own sports betting market will be immune to these negative financial impacts. The aforementioned American trends provide a “crystal ball” in anticipating the long-lasting impacts of sports betting in Canada, says wealth management consultant Preet Banerjee in writing for the Globe and Mail. We have already begun to see the nascent beginnings of the long-term consequences of the sports betting sector: in late 2023, the Journal of Gambling Studies reported that the Ontario Problem Gambling Helpline had reported a dramatic increase in the proportion of calls related to online gambling from 34 percent to 48 percent, after the expansion of online and sports betting in the province. Mental Health Research Canada estimates that 15 percent of people between the ages of eighteen and thirty-four are at a high risk of problem gambling. Further, problem gamblers have one of the highest rates of suicide of any addiction.
The link between the rise of sports betting and the negative impacts of engagement can be attributed to both the ease of use and rampant exposure to online gambling. The Centre for Addiction and Mental Health, Canada’s largest mental health teaching hospital, says that from a public health perspective, the most relevant risk factors for gambling-related harms are both exposure and the form of gambling. In a traditional gambling setting (think casino), gambling was in part regulated by space and time, from the practical considerations that you could only gamble inside the building and for so long. In contrast, online betting is available everywhere and at any time, which means that the possibility of regulation, or lack thereof, now falls squarely on the player. At the University of Alberta, Fiona Nicoll, a political scientist and former Research Chair in Gambling Policy says that new forms of sports betting, including “in-play betting,” where viewers place bets throughout live sports games as odds change, and “micro-bets,” which are placed in individual turns within a sporting event, have infused sports gambling “with the idea of recreation and entertainment.”
This seamless integration of gambling and entertainment has been propelled by the sports betting industry itself: CBC’s Marketplace found that Canadian viewers now spend about 20 percent of any professional sports game watching betting ads and gambling messages, and that segments on sports betting have become regular features of sports commentary. In five NHL games and two NBA games broadcasted live between 25 October and 29 October, CBC researchers counted 3, 537 gambling messages across all broadcasts, or about 2.8 broadcasts every minute, totalling one-fifth of viewing time. More than 90 percent of the logos or references were found directly on the playing surface, court, or rink-side.
The AGCO is aware of these issues: in the summer of 2023, the commission announced that it would institute new advertising regulations to protect minors and reduce harms associated with online sports betting. More specifically, the AGCO announced it would restrict retired and active athletes from appearing in conventional sporting betting ads. This comes after high-profile celebrity athletes have begun to receive endorsements and appear in gambling advertisements, including Auston Matthews, as brand ambassador for Bet99, as well as Wayne Gretzy and Connor McDavid, who each appeared in ads for BetMGM. Tom Mungham, CEO of the AGCO, made statements acknowledging that “children and youth are heavily influenced by the celebrities they look up to,” and that the AGCO was therefore “increasing measures to protect Ontario’s youth by disallowing the use of these influential figures to promote online betting in Ontario.”
These new restrictions are not without one massive caveat: though athletes are not allowed in traditional sponsorship ads, the AGCO has made an exception for “responsible gaming” ads, in which gaming operators tell users to “play within their limits.” Connor McDavid appeared in one such ad for BetMGM in March 2024. Critics of these new regulations have called the allowance of celebrity athletes appearing in “responsible gaming” ads as a “truck-sized loophole” to the regulations themselves. “Responsible” messaging or not, in Ontario, athletes are still allowed to endorse these major betting companies. Combined with the pervasive nature of sports betting advertisements on broadcasts and in real-time, viewers will continue to be bombarded with gambling messaging through whatever medium they watch sports.
York University Professor of Marketing Markus Geisler says there should be social worries about how intertwined gambling and professional sports have become in the province: “All of this is contributing to the normalization of gambling… Something we conventionally think of as very risky and a very dangerous practice [is framed] as something that’s actually just fun and harmless.” Between 2023 and 2024, Ontario’s gaming market saw a 70 percent increase in Ontarians engaging in gambling. The province is expected to become the biggest market for online betting in North America in the future. However, the industry itself has not been the only winner: a separate 2023-2024 Deloitte report concluded that Ontario’s market contributed $ 1.24 billion to federal, provincial, and municipal pockets.
What the future holds for stricter regulations in Ontario and beyond remains unclear, as the only federal attempt at regulating sports betting advertising, Bill S-269, remains stalled. Clearing the Senate in November, the bill proposes the development of a national framework to regulate advertising from sports betting in Canada, and to set national standards for prevention of risk for persons negatively implicated. However, Trudeau’s resignation and prorogation of parliament until 24 March has left the legislation in limbo. Until then, the sports betting markets, and their ads, show no signs of stopping.