How Sports Betting Can Make You Poor!

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Sports betting has exploded in recent years, growing from $400 million in gross revenue in 2018 to over $11 billion in 2023. In most states, you can bet on nearly any game, from football to lacrosse, to surfing and darts. Thanks to smartphones, betting can happen anytime, anywhere. But what could go wrong?

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In 1989, former MLB player and Cincinnati Reds manager Pete Rose was accused of betting on games involving his own team, which violated the rules, as he could influence the outcome. He was banned from professional baseball for life, and this led to broader concerns about the impact of betting on the integrity of sports.

In 1992, Congress passed the Professional and Amateur Sports Protection Act (PASPA), essentially banning sports betting across most states, with exceptions like Nevada. Major sports leagues supported this ban, fearing that betting scandals could erode fans' trust in the fairness of the games.

However, in 2018, the Supreme Court invalidated PASPA, allowing states to legalize sports betting. Since then, sports gambling has been legalized in most U.S. states, with fantasy platforms like FanDuel and Draft Kings leading the charge. These companies quickly integrated real money betting options into their apps, cornering around 70% of the market.

These platforms introduced innovations like proposition bets, where users can wager on specific game events, and single game parlays, which combine multiple bets into one larger bet. Although these bets offer high rewards, they carry poor odds for bettors, with bookies making substantial profits from them.

Supporters of legalized sports betting argue that it provides a service people want while boosting state tax revenue. However, it has also led to an increase in gambling addiction, particularly with the convenience of smartphone apps. New studies have shown that households in states where sports betting is legal have experienced financial strain, with lower savings and higher rates of bankruptcy.

Betting companies use advanced AI to track user habits and employ strategies to keep gamblers engaged, often blurring the lines between sports watching and gambling. This has led to a rise in gambling scandals, which have raised concerns about the future of sports. High-profile cases, such as athletes being banned for betting or mishandling insider information, have only added to the scrutiny.

Despite these issues, the gambling industry is unlikely to shrink, as it's too financially entrenched. However, states like California and Texas, which have yet to legalize sports betting, are hesitant, possibly influenced by recent scandals.

If you're in a place where sports betting is legal and are considering it, it's essential to approach it as entertainment rather than a reliable way to make money. The odds always favor the house, and even when you win, you might not always get paid due to clauses like "obvious error" in betting contracts. If you're looking for a safer way to grow your money, investing in the stock market is a better option, as it tends to pay out more over time than gambling platforms.

In fact, investing in Draft Kings stock since 2018 would have yielded more returns than betting on their platform.