Newsletter | You Can Bet on It

When the Chiefs take on the Eagles in Super Bowl LIX this Sunday, one thing is certain: tens of millions of Americans will collectively bet more than a billion dollars on the game – and not just on the final score, but also on the most minute aspects of the game and even on the non-sports elements, such as the length of time Jon Baptiste holds the note of the final “brave” in the national anthem and whether Travis Kelce will pop the question to Taylor Swift.

Nearly three years ago, we shared an article from Peter Kafka, then at Vox, who wondered aloud whether combining something known to be addictive – gambling – with something also known for its irresistibility – the smartphone – was such a good idea. It was a rhetorical question and Kafka’s main concern was that more people weren't alarmed by where this unholy combination could go. He was right to be concerned. Last week, Leander Schaerlaeckens, writing for The Guardian, laid out just how far online sports betting has come since then in “How the quick high of ‘fast-food gambling’ ensnared young men”: the annual spend on sports betting is now $150 billion per year and was as high as $1,000 per capita (and that’s per capita not per gambler) in seven states. Total bankruptcies are up by as much as 30% in the states that have legalized online gambling. The industry has been hugely successful in reaching young people and especially young men: 60 to 80% of high school students reported gambling in the past year; 58% of 18-to-22-year-olds have bet on sports and this number rises to 67% on college campuses – despite the practice being illegal in most states for youth under 21. Schaerlaeckens points out that this might all seem like a little innocent fun if it weren’t for the fact that for many (16% of youth who gambled according to one study) develop full-blown gambling addictions.

A number of factors have led us here. Gambling has been de-stigmatized – you can do it privately, from your bedroom, and ads, featuring high-profile celebrities, for gambling apps are ubiquitous. But a big part comes from the design of the product – and how the smartphone as a delivery mechanism has enabled a turbocharging of an already addictive product. Schaerlaeckens shares this perspective from Dr. Harry Levant, who studies gambling addiction at Northeastern University:

“Gambling addiction has nothing to do with money. It has to do with how the product makes you feel, the action, the anticipation. The light-up of the dopamine occurs in the anticipation of the result, not the actual result. What’s happened here is we’ve taken a known addictive product and we’ve come up with a way to market and distribute it to people at lightspeed.”

Hence the hundreds of in-game bets (think “will the next pitch be a curveball?”) that appear and disappear rapidly, forcing immediate decisions based on instinct and quick, aggressive play that triggers dopamine hits.

The sports betting industry has seemingly mastered how to provide the right game mechanics, the right doses of compelling in-game bets, at the right speed, to develop a loyal, addicted customer base and, like social media platforms before it, they leverage the usage data to optimize their design for maximum consumer engagement. (We won’t get into the controversial question of whether smartphones and social media platforms are technically addictive – that they use usage data to optimize engagement, however, is indisputable.) And let’s not forget about the food industry, which famously created the concept of the “bliss point” – the perfect balance of sugar, salt and fat to create hyper-palatable foods that consumers crave while somehow not finding them full. What we’re seeing is different industries getting better and better at precision engineering products in order to stimulate unconscious, impulse-driven consumption. How these techniques land in today’s world is the subject of a New York Times Magazine interview of Stanford Psychology professor Anna Lembke, by Lulu Garcia-Navarro. Lembke, author of the best-seller Dopamine Nation, has argued that the overstimulation provided by the modern world has led us to more anxiety, depression and unhappiness. The theme, in Lembke’s view, that ties together our modern experiences with TikTok, FanDuel, Doritos and of course online porn is that they’re all mastering dopamine delivery to the point that our brains might actually be changing in response:

“It seems to me we’ve crossed over some kind of abundance set point where we went beyond meeting our basic survival needs and now have so much access to so many pleasure-inducing substances and behaviors that we may actually be changing our brain chemistry such that we’re in a dopamine-deficit state. Now we need to keep using these highly stimulating drugs and behaviors, not to get high and feel good, but just to level the balance and feel normal.”

This abundance, combined with ease of access and precision-engineered craveability isn’t likely to stop. AI is already powering the user experience designs and one can only expect it to become even more effective at doing so. So what’s to be done? We’ll close with a perspective from Cal Newport, who argues that it really depends on how we, as a society, see the nature of the harm. In “Is Social Media More Like Cigarettes or Junk Food?,” written for The New Yorker, Newport contrasts the history of the US’s approach to youth smoking and junk food. Sales of tobacco to minors has been outright banned for more than a century, whereas sugary cereal and other junk food consumption led to information-based interventions (which we discussed in our last newsletter) and ultimately left to parents to regulate. Newport, writing specifically about social media, notes that the US has thus far treated it like junk food while Australia, with a recent ban on social media for kids under 16, views it more like tobacco. Online sports betting is technically already banned in most US states for under 21-year-olds (though that’s clearly not working). So perhaps a bit more like tobacco, which is hard to describe as a regulatory success given an annual death toll of more than 400,000 lives. As a public health problem, online sports betting is far from tobacco levels, but with its rapid and growing adoption and addiction levels ranging from 9% (adults) to 16% (youth), it’s a serious one. The states who legalized it did so to capture a share of the action and they indeed they have, collecting $1.8 billion in taxes in 2023. Hope it was worth it.

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