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‘It’s like an addiction’ — American teenagers fall victim to online sports gambling apps

Antonio, aged 16, with a nervous laugh tells me “its really bad. I’ve probably lost hundreds of dollars. I’m not even the worst within, you know, my friends. I know kids who have lost over a thousand.”

Antonio is not discussing the typical ways one might imagine a teenager irresponsibly spending their money, such as going out with friends or buying clothes. He is describing his experience with online sports gambling, a phenomenon that is taking over the lives of American teenagers.

“It’s like an addiction. I have friends who, whenever you’re with them, they’re constantly checking their phones,” Antonio adds.

Sports gambling is one of the fastest-growing industries in the United States, with over $220 billion in bets wagered by Americans in the past 5 years.

The growth has some insidious undertones, however: it has an extreme prevalence among teenagers. A study by the National Collegiate Athletic Association (NCAA) found that of respondents aged 18-22, 58% had placed a wager on a sports game in the last year (although legal in some, most US states do not allow those under 21 to gamble).

Moreover, young people (aged 10-24) have higher rates of problem gambling than adults which can continue on to form an adulthood gambling addiction. This influx of underage gambling is not accidental. Given the exposure of teenagers to various gambling advertisements, both overt and covert, this epidemic has been a long time coming.

A vast array of digital media targeted towards Gen-Z frequently promotes gambling.

 

Popular sports content brand Bleacher Report boasts 21.4 million followers on Instagram and 5.7 million followers on TikTok, not including the millions of followers on its subsidiary pages. It’s a hub for media among youth, with Bleacher Report themselves noting that it aims to identify and build “trust with its young audience” during an interview with CNBC.

Bleacher Report also owns @br_betting, one of its subsidiary pages focused solely on gambling and sports gambling content, which itself has over one million followers. While ownership of its betting page may not seem insidious in itself, Bleacher Report often promotes the page on its various other accounts.

Instagram enables creators to generate collaborative posts, in which posts may be shared on two accounts at the same time, causing users to receive posts on their feeds from accounts they otherwise may not have followed. Bleacher Report often uses the feature to expose users to other accounts under their brand, and @br_betting is not an exception.

@br_betting’s collaborative posts with various other Bleacher Report brands normally receive substantial likes, with its last gaining over 224,000 likes. The use of these combined posts introduces the young audience of Bleacher Report to online sports betting and gambling in general, leading them to develop tendencies similar to Antonio and his friends.

Bleacher Report is not the only online brand—or influencer—to promote gambling. Influencer Adin Ross is one of the most popular streamers in the United States, boasting 6.7 million followers on Instagram. He has over 600,000 followers on Kick (and 44.12 million hours watched on the popular streaming site Twitch prior to his banning), where his streams often garner over 100,000 live viewers at a single time.

Although Ross is famous for his gaming and ‘Just Chatting’ content, his streams often show him participating in online gambling activities.

Ross’s Instagram biography has two accounts linked to it: @kickstreaming and @stake, an online casino where he often gambles. Ross’s connection to the industry is not just one of passion; he gets paid large sums of money to promote gambling on his channel.

During one of Ross’s previous streams on Twitch, he accidentally opened a message exchange in which a sponsor linked to online gambling companies described payments upwards of $2 million in exchange for marketing the activity.

Although Twitch has now banned the once-frequent gambling content on its website, Kick still allows it to be shown on streams. Although Ross claims the majority of his audience falls between 20-22, his fans are known to comprise a large portion of those under 18.

Antonio notes the popularity of Ross among his friends, remarking that he is “easily one of the celebrities [my friends] interact with the most.”

Kick, while stating you must be 18 years or older to access the site, does not require any verification to prevent those younger partaking. The result of this is an environment that exposes underage fans to online gambling, with the social pressure of its prominence introducing them to possible addiction.

Gen Z has also been exposed to gambling beyond sponsorships with online companies. While betting and advertisements for betting have restrictions, many video games and other forms of online media indirectly promote gambling within their systems.

A system that has been undergoing frequent criticism is the “loot box” system of rewards within games. A loot box is a reward system within a game, granting a random item when purchased. Many times, loot boxes are purchased with real-life currencies or in-game currencies that are bought through real-life currencies.

While the amount paid is standard, the item received through a loot box can vary from very common to rare items, with many games offering items whose in-game strength differs greatly.

The purpose of the system is to encourage more purchases of loot boxes: if a player desires a certain item, they cannot purchase it directly and instead have to continue buying loot boxes until they randomly receive the item. They are extremely common in the industry and found in titles ranging from sports behemoths such as the FIFA franchise to mobile games like Clash Royale.

Loot boxes are a rewarding system for the video game industry, with experts estimating the industry generated $30 billion in profit from them in 2018. The system has similarities to gambling, as the reward is based on chance.

Learn more:

Study links 'loot boxes' to gambling

‘In 2019, a study found that teens who played luck rather than skill-based games online were more likely to become regular gamblers in adult life, prompting heightened concerns about some of the ways students are using smartphones.’

By: The Educator

In the rare instance that an exclusive item is won from the loot box, the pleasure-seeking hormone dopamine is released in the brain (the same phenomenon that occurs when a gambler wins big on a bet). This becomes problematic when it is combined with the popularity of video games, and thus loot boxes, among adolescents.

One study found that the average 12-17 year-old spends $50 a month on loot boxes. Loot boxes themselves are present in almost every game played by those in the age range and a gateway to gambling problems later on.

One thing is clear: whether through indirect or direct means, teenagers are being influenced to pursue online sports gambling.

The rapidly growing industry is preying on those with underdeveloped minds, increasing profits to the detriment of future generations. Other industries and influencers, whether they originally intended to do so or not, are also making billions of dollars through advertisements or systems that promote gambling, causing teenagers to be drawn to online illegal sports gambling.

But what is the impact of this? Gambling can lead to numerous health issues such as depression and sleep deprivation, with gambling addiction being classified as a mental illness. Within economic theory, gambling is a textbook example of a demerit good.

A demerit good is a good or service that has a negative effect on the buyer when consumed. Left alone, free markets tend to over-allocate resources to the good and produce too much of them. Governments seek to intervene to address the market failure caused by the price mechanism neglecting the costs, helping to improve social aspects. In this case, the market is over-providing the good to a demographic that should not even have access to it: teenagers and children under 18.

While laws in the United States ban those under 18 from gambling (and for many states, those under 21) more needs to be done to curb the issue.

Regulation could take many forms but inherently needs to aim to modify the behavior of organizations. One way that has been experimented by governments for other websites restricted to youth is the use of an ID check to access the website.

Moreover, more awareness about the issue to parents could also make a major difference in limiting the access of their children to gambling platforms.

Many youths, such as a significant portion of Antonio’s friends, use their parents’ accounts or credentials to gain access to online gambling websites (making ID checks a barrier that cannot stop all underage use), so stopping them through a parental level can make a major difference. With parents understanding the negative consequences, this will reduce the negative effect of consumption.

In addition, Companies and influencers must also realize the repercussions of all their initiatives and programs, as the impact is often young people being drawn into the illegal scene. Fines or penalties from companies that are found to willingly turn a blind eye to the issue could be a possible solution that incentivizes firms to take action.

Online sports gambling is a proven rapidly growing concern that leads to severe ramifications for all the economic agents (government, consumer, firms), and especially to teenagers and their families.

Written by:

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Arham Shah

Contributor

New Jersey, United States

Born in 2006 in New Jersey, Arham Shah is a senior at the Bergen County Academies in Hackensack, Jersey. He is interested in a variety of topics, but loves to learn and write about economics, the financial world, and sociology.

Arham enjoys seeing the intersection between the topics and especially the way academics can be applied to analyze issues in the real world.

Outside of learning, he enjoys running and playing lacrosse. He also likes to watch sports, and is an avid fan of the New York Giants, Memphis Grizzlies, and New York Red Bulls.

Edited by:

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Timur Boranbayev

Economics Section Editor

London, United Kingdom

economics

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