Below, Danny Funt shares five key insights from his new book, Everybody Loses: The Tumultuous Rise of American Sports Gambling.
Danny covers sports betting as a contributor at The Washington Post. His reporting has also appeared in The New Yorker, The Wall Street Journal, and the Columbia Journalism Review. He previously worked as an editor at The Week magazine.
What’s the big idea?
In 2018, a landmark Supreme Court decision set off an explosion of legal sports betting across the country. Since then, Americans have wagered more than half a trillion dollars on sports. Sports gambling has become inescapable, transforming both the business of sports and the very nature of what it means to be a fan.
1. Until recently, sports leagues despised gambling.
After the Chicago White Sox—or the “Black Sox,” as they came to be known—colluded with gamblers to intentionally lose the 1919 World Series, Major League Baseball decided it needed a commissioner, whose top assignment was ridding the game of gambling. This proved impossible because determined fans have always been able to find someone to take their bets, but for a century, professional sports leagues and the NCAA discouraged gambling as emphatically as they could.
In the 1990s, NFL commissioner Paul Tagliabue warned Congress that sports gambling turns fans into cynics who assume referees must be looking out for a bet whenever a questionable call is made. Tagliabue and his counterpart at the MLB, Bud Selig, used the same word to describe betting on sports: “evil.”
About a decade ago, New Jersey sought to overturn a federal ban on sports betting outside Nevada, believing it could revitalize Atlantic City casinos. Governor Chris Christie led that charge, and he told me that of all the league commissioners who opposed him, none got more animated in private conversations than NBA commissioner David Stern, who would argue that gambling degrades fans’ relationship with their beloved teams and treats athletes like, as Stern put it, “chattel.”
But even as the leagues fought New Jersey in federal court, they began meeting secretly with representatives of the gambling industry who explained how much money they stood to make if gambling were made legal, both from partnerships with betting operators and from increased TV ratings, since the average gambler watches about twice as many games as a traditional fan. The NFL, for example, stood to make $2.3 billion every year from legal gambling. That potential windfall proved irresistible, and after the Supreme Court sided with New Jersey, the leagues abandoned their reservations and helped lobby states to legalize sports betting.
2. It’s harder than you think to win money betting on sports.
Gambling odds are skewed to give the house an inherent edge, what bookmakers call “the vig” or the “juice.” This means that to come out ahead, a bettor must win about 53 percent of the time. That might sound manageable, especially to sports fans, who tend to be rather arrogant about their ability to predict the future.
It turns out that winning 53 percent of your bets is extraordinarily difficult; less than one percent of bettors can pull it off. In the U.S., football generates the lion’s share of wagering and, generally speaking, the more popular a sport, the harder it is to beat the odds. That’s why one of the sharpest professional sports bettors working today, Rufus Peabody, told me he gave up betting on the NFL after it became impossible for him to come out ahead.
“It turns out that winning 53 percent of your bets is extraordinarily difficult; less than one percent of bettors can pull it off.”
Gamblers can now bet on many statistical propositions, or “props,” within a game, such as whether a certain wide receiver will catch a touchdown. Most people prefer to wager on positive outcomes, since it’s more fun to root for the touchdown than to spend the game hoping that a receiver doesn’t score. Knowing this, bookmakers skew, or “shade” the odds, making bets on positive outcomes pay out even less. Combine shading and the vig, and bookmakers have a nearly insurmountable advantage.
It’s incredibly hard to beat the odds, but even if you manage to pull that off, most American sportsbooks will drastically limit how much money you can bet. I’ve seen gamblers who, after just a week of winning, aren’t allowed to wager more than a few bucks at a time. FanDuel and DraftKings, which control about three-quarters of the U.S. sports betting market, are especially ruthless in limiting winning customers. FanDuel’s founding CEO, Nigel Eccles, told me, “I think their advertising is untruthful. They’re selling that you can win, but you can’t.”
3. Gambling companies go to remarkable lengths to keep their most valuable customers happy—and losing.
Get this: Just one percent of the people who wager on sports account for about 50 percent of the revenue. Inside sportsbooks, those customers are known as VIPs. They tend to wager at least a few thousand dollars a week, and often much, much more. As a result, top sportsbooks employ hundreds of people tasked with tending to VIPs’ every need. They text clients throughout the day. They meet up with them to take in a game, play a round of golf, or go out on the town. They also treat VIPs to some extraordinary perks.
I’ve heard of VIPs getting to throw out the ceremonial first pitch at a Major League Baseball game, getting to announce a draft selection at the NFL draft, getting to play pickup basketball on an NBA court, getting to tour the pit of a NASCAR crew moments before a race, and getting to take a helicopter to a PGA golf event that lands on the course.
There are also perks that have nothing to do with sports. One sportsbook treated a VIP and his friends to a cruise during his bachelor party. Another sent a VIP a custom blanket with an image of their dog, who had recently passed away. The goal is to keep these customers happy, loyal, and losing staggering amounts of money.
The danger is that all these perks can make it extremely hard to walk away, especially when a gambler couldn’t otherwise afford that VIP lifestyle. One person told me that he developed a gambling addiction while being showered with VIP benefits. At the time, he was working as a Cheesecake Factory server, making $65,000 a year.
4. Most sportsbooks aren’t profitable.
Even as Americans wager $150 billion every year, most sportsbooks are struggling to stay afloat. Industry analysts had expected the U.S. betting business to resemble Britain’s: dozens of companies, all making reliable profits. But sportsbooks operate on narrow margins, obtaining licenses in each state is expensive, and American betting operators have gotten caught up in an advertising arms race, spending a fortune to acquire customers.
After 2018, more than 60 companies flooded the U.S. marketplace. Many of them have since folded, and just a small handful are profitable.
“The goal is to keep these customers happy, loyal, and losing staggering amounts of money.”
I spoke with one top sportsbook executive who quit shortly before the company was sold. He saw that his company didn’t stand a chance at making money, but he also said, “Another reason why I left is I just didn’t like what I was doing. If you think about it, my job was to basically slowly bleed someone dry.”
“When I stepped out of my role,” he continued, “I made a conscious decision that I’m not going back into this industry. I mean, if you can find an executive job at one of these larger operators, you can make good money, but you don’t feel good about it, that’s for sure.”
Even FanDuel and DraftKings, despite dominating the market, are seeking to boost their profit margins by getting customers to bet more often and more recklessly. They’re also counting on more states legalizing online casino gambling, allowing people to play games like slots, blackjack, and roulette from their phones.
The hope is that it will be easy to persuade online sports bettors to give these casino games a try. But as a former top sportsbook executive put it, that’s “going to be so hard for anyone with an addictive personality to resist, and that’s where [things] could get really ugly.”
5. Health experts fear a surge of gambling addictions.
Historically, the general consensus has been that one to two percent of the population is susceptible to a gambling problem. But there has never been this much gambling advertising, the media has never promoted gambling so aggressively, and it has never been easier to place a bet anytime, anywhere.
Psychologists, gambling counselors, and even ER doctors say the fallout from sports gambling legalization is even worse than anticipated. Consider New Jersey, one of the first states to take advantage of that Supreme Court decision. By 2023, residents of New Jersey suffered from gambling disorders at triple the national average. Among young men, 19 percent were at high risk for a gambling problem. Researchers at Rutgers University found that New Jersey sports bettors were significantly more likely to abuse drugs and alcohol, and 21 percent of them had wished they were dead—a truly horrifying number.
“Among young men, 19 percent were at high risk for a gambling problem.”
The evidence is piling up across the country: Many college students who bet on sports are dipping into funds set aside for tuition. States with legal betting see worse credit scores and higher bankruptcy rates. A startling number of kids are finding ways to gamble online, even though they’re legally underage; in North Carolina, half of calls to the problem-gambling hotline come from concerned parents.
Jeffrey Derevensky, a child psychologist and world-renowned expert in youth gambling, noted that it often takes someone years of gambling to develop a problem. Meaning that if a generation of young fans is being groomed to gamble on sports, we can’t yet know the full extent of the damage. “What will happen in five years?” Derevensky asked. “God only knows.”
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