With all of the strong emphasis on a thriving industry and massive tax revenues, there hasn’t been enough attention paid to a key threat to gamblers and the industry as a whole – problem gambling.
While vast majority of gamblers gamble responsibly, 5 million Americans may develop a gambling problem each year. The effects of gambling addiction extend beyond the addicts themselves, negatively affecting their families and communities along the way, and these effects may be exacerbated as gambling becomes more prevalent throughout New York if operators do not strengthen their responsible gambling measures.
New York taxes gambling companies’ gross revenue at a rate of 51 percent: The highest in the country. New York collected $70 million in state tax revenues in its first month of legalized NY sports betting, thanks to this astronomical tax rate. Gov. Hochul applauded the fact that they’ve seen how mobile sports wagering can be an economic engine for New York, driving significant funding for schools, youth sports, and so much more, which begs the question of why responsible gambling measures aren’t at the top of that list.
This revenue benefits a variety of programs across the state, but it is not a sufficient remedy in and of itself for problem gambling in this state. A greater portion of this tax revenue should go toward helping problem gamblers, not just through treatment centers, but also through research into the root causes of addiction and how operators can incorporate the data into their safety protocols.
The state has a responsibility to address problem gambling: gambling companies protect their customers, not only because they are in charge of managing the products on which people gamble, but also because they are best positioned to implement changes that can reduce the threat of problem gambling.
Operators should use all available tools to track problematic gambling activity and restrict access to their platforms for those players. Gambling firms can collect a variety of data points that indicate addictive gambling behavior or protective markers, which must be incorporated into their compliance and safety processes.
Gambling companies may want to increase their revenues and customer base through advertising, but it must be conducted in such a way that problem gamblers are still protected. Utilizing digital advertising mediums, which allow users to opt-out of related advertisements, is preferable to those that gamblers can’t avoid. Gambling companies should consistently reevaluate their regulatory compliances to ensure they’re meeting the changing needs of gamblers.
Operators can also support responsible gambling projects that are looking for innovative methods to reach out to gamblers and high-risk demographics, such as college athletes. Entain Foundation U.S., for which I am a trustee with Princeton Public Affairs Group Partner Bill Pascrell III and former New York Giants wide receiver Amani Toomer, for example, supports or partners with a variety of responsible gaming groups.
The gambling industry in New York cannot hope to thrive unless it adequately addresses all forms of problem gambling. Aside from the ethical obligation that operators have to protect their customers from harm, gambling companies rely on a healthy customer base, a reasonable regulatory environment, and widespread public support to survive. So long as problem gambling continues to harm New Yorkers, none of these dependencies can be assured.
With the Problem Gambling Awareness Month in full swing, it’s up to gambling companies to do their part to protect vulnerable populations. We’ve passed the point of recognition. It’s time to get started.