Sports Betting, Uncertainty, and Power

In the past decade, sports gambling has become wildly popular. What I hadn’t realized until recently is that sports betting used to be more broadly legalized. When I was in elementary school, President George H. W. Bush signed the Professional and Amateur Sports Protection Act (PASPA) into law. This made sports gambling illegal in the United States (with a few caveats). It was a prohibition-type moment, largely driven by the Pete Rose scandal of the previous decade. A few states had exemptions written into the law. Some were quite limited (Oregon, Delaware, Montana), but Nevada had total exemptions to run sports betting however they wanted. This is the reason I had been told that there were no sports teams in Las Vegas. That is until 2017 when the NHL added the Vegas Golden Knights.

Just a year later, in 2018 the Supreme Court struck down the PASPA. Now each state can decide if it wants to allow sports gambling.

During the life of the PASPA (1992 and 2018), the internet became a part of everyday reality for much of the world. Sports betting was taking place online through various black market sites. But after 2018, states saw the huge financial upside possibility to legalizing sports gambling. Today 39 states have opened the doors to this, 30 of those allowing online versions of sports gambling.

Today, it is not possible to watch any sporting event on television without seeing 17 ads for DraftKings, FanDuel, or the most recent popular choice—Kalshi.

Kalshi (and many of the other sites) allows you to bet on anything. It’s not just: who will win the NBA Championship? It’s also: Who will win the MVP? Will Jalen Brunson have more than 7 assists? What color glasses will Spike Lee wear in game 5?

And it’s not just sports. It’s everything. It’s election results. It’s the high temperature for the day. It’s betting if a stock will go above a certain value. It’s betting on if the US will bomb Iran. These are called “prediction markets” and they are getting a fair amount of press lately because there is suspected corruption involving these predictions.

But why am I talking about this?

A couple of reasons. First, this is becoming a problem, particularly for men 18-49. Around 22% of people have bet on sports in the US. About 48% of men 18-49 have activated an online gambling account. Estimates are that 70-75% of all bettors are men (with women’s share gaining in the past few years). Addiction is a real challenge in this space, as well as theological issues like shame and stewardship.

But the main reason I am interested is because I am trying to understand why. Why has sports betting become so alluring and popular when it is clearly just stealing people’s money?

I see a few reasons. The first is probably obvious. People want to get rich quick and this is one way to chase that fancy. It’s why people play the lottery or go to the casino. The mere possibility of winning offers a type of fun that some people enjoy. If you go to the casino with $20 in your pocket to lose, and you’re entertained by that, well that’s not much different than going to see a movie. But if you do that every day, it’s a problem. If you can’t stop at $20 (or whatever number you decided on), that’s a problem.

In sports betting, almost nobody does well. Current estimates are that only 4% of people actually make any money whatsoever from these sites (some research puts that even lower…1-3%). Some break even (and I’m praying that a healthy boundary people have placed for themselves). And many lose money. Estimates show 90-95% of sports bettors lose money in the long run.

That’s not to say people don’t win money in the short term. Bets do pay out. But when people are playing with the house’s money, they have a tendency to try and double down and win more…but end up just giving it right back to the house. The way gambling is structured, you have to win 54% of your bets to win money. If you were betting on a literal coin flip (which you can do by the way), your bet will be listed at -110. This means that to win $100, you have to bet $110 dollars. That’s how these betting sites make money. Baked into every bet is the reality that the bettor is taking more risk than the betting site.

The possibility of wealth, even if it is small, is one reason sports betting has become very popular. But I wonder if it is not only greed and the hope of wealth that is driving this trend.

If you can predict what is going to happen, you can avoid all sorts of unpleasantness. You could avoid booking flights you know will be delayed or cancelled. You could make plans for only days that will be beautiful outside. You would always order the tastiest dish on every menu.

It’s this second driving force to the trend that I find more interesting. I think that many people want to be able to say they predicted the future. People like the idea of saying, “I told you so.”

Or in theological terms: Lots of people want to be prophets.

And I wonder if beneath all of this is a desire to rid ourselves of all of the uncertainty we feel.

There is a powerlessness that comes with uncertainty. And that bothers us.

What’s strange and perhaps downright illogical is that people would chase away uncertainty with something that is so unpredictable.

And here’s where I think the problem truly lies. Sports betting isn’t encouraging us to get rid of uncertainty. It’s asking us to gamify uncertainty. These prediction markets aren’t offering the power of certainty. They are offering you the chance to prove that you are better than everyone else. That you are smarter. That you “know ball” more than everyone else. That you get it. That you will be one of the 4% who makes money.

Sports gambling doesn’t offer an antidote to uncertainty. It invites you to drink in more of it so that you don’t feel powerless from the uncertainty. It offers you the opportunity to substitute the feeling of uncertainty for other feelings: the thrill of victory or the agony of defeat.

Sports betting allows us to rid ourselves of discomfort of uncertainty and powerlessness by offering bigger, more familiar emotions in their place.

This, I think, is the more subtle allure of sports betting and prediction markets. It is an opportunity to assert power over the feeling of uncertainty.

Now, you are probably thinking through this and wondering the following. If at most 4% of people succeed. And the risk of losing is 90%. Why would anyone choose that over the feeling of uncertainty?

I think there a few layers to this. First, we are very good at exempting ourselves from bad news. (See Chapter 5 of Ten Lies Satan Loves to Tell.) We think we can beat the odds on everything from disease to divorce to delusions that our team really will win it all this year (except in Minnesota…we’ve given up on such hope for our men’s sports teams #golynx #gofrost).

Second, analyzing the chances of succeeding with sports betting is a logical endeavor. The betting itself is emotional. Logical arguments are seldom heard in emotional processes. Persuading people will take emotional arguments. On top of that for many people the emotional high of winning, even if it’s only half of the time and results in losing money, is preferable to the constant feeling of uncertainty. And for perhaps a smaller number, the feeling of losing is even preferable to the feeling of uncertainty.

Which means that the real bet that is going on is not a bet with money. People are betting their emotions. It is always a bet to feel a win or feel a loss, to feel like a winner or feel like a loser. And even if the money ends up in the negative, the feeling of being a winner is always just one bet away.

Third, sports betting is a private endeavor where wins can be shared and bragged about while losses are kept secret, locked in the darkness. The appearance of power, success, and prophetlike status can be curated without lying to anyone other than oneself.

And herein lies another facet to the allure of all this. You can get all the validation of prophet-like power by sharing your wins and hiding your losses. You can pretend to be in the exclusive 4% and feel all the specialness of that shine, and nobody will ever know that you’re lying. Nobody will know how much you’ve lost all told. You don’t even have to calculate it yourself.

And this opens up the final aspect of the allure of sports betting: escapism. Just like a fictional book or movie can help you escape the realities of life, so can sports betting. Want to forget about politics for a while? Go watch the West Wing for the twentieth time. Want to worry less about your job? Let’s try The Office, Parks and Rec., or Brooklyn 99. Want to forget that none of your men’s sports teams have been in a championship game since 1991? Bet on someone else to win and manufacture that feeling.

All told, sports betting offers the opportunity for wealth, power over uncertainty, the feeling of winning, the ability to curate a prophetic persona, and escapism from life’s realities.

But the reason sports betting is dangerous is that all of these offers are, quite frankly, bad bets. Escapism is never permanent. Reality and all its uncertainties is still here. You can pretend to be a prophet all you want, but imposter syndrome is waiting for you. The feeling of winning will always be equally yoked with the feeling of losing. You won’t win money. And at the end of it all, the uncertainty will still remain.

Like with the casino, I believe there are plenty of responsible sports bettors out there. People spending $50 a year and stopping when they’ve lost it, or whatever system they’ve created.

But there are plenty of people who would be better off stopping, who need to hear the emotional appeal to bet on themselves and who they truly are. To bet bet against sports betting and everything it will take from them, and the imposter it could make of them.

Thanks for reading.

Andy