Paspa Interview with Keith Whyte

An interview with Keith Whyte, the executive director of the National Council on Problem Gambling on the five-year anniversary of the Supreme Court's repeal of the Professional and Amateur Sports Protection Act (PASPA).

STEVE RUDDOCK: We are five years post-PASPA repeal and a lot of things have changed. I'm interested to hear your thoughts on the transformation, both the positive and negative?

KEITH WHYTE: I think it's a mixed bag, but the good stuff is that we're closer than ever to looking at gambling and gambling addiction as a national issue. For the longest time most Americans have looked a gambling as a local issue. So has the industry as most operators are regulated on a state-by-state basis.

So, one of the positive impacts of the massive expansion of sports betting and national gambling advertising is that more and more people are now realizing, finally, belatedly, that this is truly a national issue.

I think another positive is it allows us to destigmatize addiction because it allows everybody to talk more openly about gambling. Americans have always gambled, and we've always had a lot of gambling. But most people are unsure and uncomfortable about gambling addiction.

The flip side of this massive expansion of gambling is we do see increases in risk for gambling problems. Our big telephone surveys of 28,000 people show risk has increased by about 30% between 2018 and 2021 alone. Most of that increase in risk is among a very particular segment. I'm not going to surprise you very much when I say its young male online sports bettors.

So nationwide, if you're not a young male online sports bettor, are you really seeing your risk or rate of gambling problems go up in the last five years? Probably not. But in that segment that was already high risk we think risk grew even greater. Most of these young male online sports bettors also gamble in other verticals, so we want to be very careful and not assume the increase in risk for gambling problems is all associated with their sports betting.

These are people that are gambling a lot online, who probably play online casino, poker, and certainly play daily fantasy sports. So, there's a collision of a lot of different things, but risk is additive. And when you increase the advertising in this segment, when you increase the bonusing, you raise the stakes even higher.

The other big factor about this period between 2018 and 2023 is the pandemic. It had broad impacts across, and certainly it increased risk factors among gamblers. Our ongoing research will tell us a lot more about whether or not that increase in risk was temporary. We did big national studies in 2018 and 2021 and we're putting that same survey into the field in 2023.

I think a lot more people are trying to figure out what good responsible gambling really means. On the good side, there's a lot more people talking about it. On the bad side, some of the people that are talking about responsible gambling have absolutely no idea what they're doing. And I lump a lot of the politicians, and frankly, more than a few regulators into that category.

So, we're starting to see some odd responses to issues we've been working on for five decades. But rather than working with us, there's a lot of people that are just jumping in. It's great that more people are talking about responsible gambling, but a lot of them are amateurs, and a lot of them don't really understand gambling and particularly problem gambling. As a result, they're not focusing on things that would really meaningfully cause change.

STEVE RUDDOCK: You mentioned how a lot of people were gambling before. Where does the added risk come from? Does it come from the bonusing? Is the increase in the amount they wager because bonuses change the landscape of how people are interacting with betting?

KEITH WHYTE: I think it does. Obviously, there's a lot of increased advertising and there's that old adage, only half of advertising works, but we don't know which half that is. I think that's where the sports betting industry is. But there's no question that advertising drives participation even amongst existing gamblers.

My own guess is that most advertising is more about recruiting new gamblers, but it may be getting some existing gamblers to bet more, and like you said, bonusing also has an impact. Loyalty programs have an impact, as before if gamblers were betting offshore or with your corner bookie, they weren't getting total reward points. Now those are very tangible rewards, so that may incentivize people to gamble a lot more.

I think it's also definitely true that the vast majority of folks that were betting sports before 2018 and even in the early days were betting before the game on the outcome of the game. Nowadays I believe the slight majority of sports bets placed in the United States are in-play. Some people engage with in-play in a very recreational way, but I think there are people who are vulnerable or with gambling problems that can use in-play to increase betting frequency, to bet every single down, every single pitch.

I think increases in advertising, accessibility, bonusing, and in-play betting for people who are already gambling may push them to gamble more and push them into the at-risk problem category. That's only part of the story. But that's some of what we're looking at.

STEVE RUDDOCK: I played in a home poker game, right after Massachusetts legalized sports betting, and 12 of the 15 men were talking about the bets they had on the college basketball games. These are middle-aged men, who weren't betting before. And obviously they were also talking about all the free bonus money they've received. I wanted to throw that out there and just get your reaction to this other segment of the population that I don't think a lot of people talk about.

KEITH WHYTE: There's so much more accessibility and although there's still some stigma there, over the past several years people are openly talking about the bets and the apps they have. So, I think that's both good and bad, but there's a lot more social acceptance now of gambling in general and sports betting in particular, and almost to the point where among certain segments, and probably your home poker game's a pretty relative example, it would be weird if you weren't betting. I was asked to do a presentation to a group of forty 17-year-olds in a sort of youth league in the town next to mine. So, I went out there and I said, how many of you have a sports betting app on your phone? And of the forty, thirty-five raised their hands. None of them were of the legal age to gamble. Some of them probably had daily fantasy apps. Some of them probably had prediction apps or social sports betting apps, where either there's no age limit or they don't verify age. Some of them were probably using offshore sites. Some of them may actually have accounts with legal sportsbooks as many sites don't do KYC (Know Your Customer) until you deposit.

What that means is a bunch of these 17-year-olds that I'm talking to already have DraftKings and FanDuel accounts, and they're getting—I use this word very rarely—they're basically getting groomed.

While we may know the legal differences between these apps, or why a site may not do KYC until deposit, parents and kids do not. The general public sees sports betting exploding. They see basically unlimited access, because a kid can sign up and get an account, even if they can't use it.

STEVE RUDDOCK: You mentioned some less than perfect policies that have been implemented or bandied about in different places. What would you chalk that up to? Is it just the counterintuitive nature of gambling and responsible gambling policies?

KEITH WHYTE: Part of that is that I think many Americans, if you scratch the surface, they still think about gambling in moral and religious terms. You know, it's only been five years that sports betting has been legal in most places. Most of our lives, most of our country's history, betting on sports has not just been illegal, but condemned. Even though it's starting to shift, there's a big chunk of the population where it's already shifted. They're not thinking about gambling in religious terms, just like they don't think about alcohol. Those old habits and beliefs die hard.

I think most people, if you ask them about gambling, a lot of them default to what they learned in Sunday school. We still have a lot of this moral and religious bias, if you will. Sometimes people just don't understand gambling, but sometimes the default perspective is anti-gambling. They believe that people who gamble are bad or greedy or immoral. In our national survey in 2018, 15% of Americans do not believe gambling is ok for themselves or others. And of course, such an attitude has terrible repercussions for someone who has a gambling problem. Anti-gambling tropes are far worse for people that have problems because they blame you for your problem, that it's your own fault. And that rarely helps someone with a severe gambling problem.

STEVE RUDDOCK: The opposite side of that would be that the person gambling is going to hide it more just because, even if it's only 15%, that's a lot of people in their lives that will look at them differently. That's exactly right. I think there's far less stigma for recreational gamblers, but for people who may be at risk for problems, there's still tremendous shame and stigma and it's hard for them to openly talk about it. You don't see prominent people in recovery from gambling like you do from other addictions, so I think it makes it much harder for everyone, but especially for those who are at risk.

You mentioned there's new attention on these topics now that PASPA has been repealed. How do we make sure that responsibility from the operators and social harms doesn't subside over the next few years?

I think one, we have to prove the economic benefits of responsible gambling. There's a lot of evidence from Europe and some from the United States that if you offer your product responsibly, if you try and create sustainability, you'll have higher lifetime value. I couldn't tell you exactly what the ROI (Return on Investment) for responsible gambling is but I believe it's a net positive. And I think there are some operators that are only going to be convinced to engage in responsible gambling by the dollars and cents.

All the data that's collected in online gambling and online sports betting is going to tell us more and more if most players are responsible and sustainable. It's certainly not true for every customer though.

I think the second thing we need to do for operators is remind them that the backlash that we're watching in real-time in the UK can come here as well, because as far as I know it's happened in every single other jurisdiction that has liberalized or expanded online sports betting.

This backlash has been driven by concerns about too much advertising, concerns about integrity of sports, concerns about gambling addiction. That backlash usually takes place within 10 years of expansion, and usually within two to five years. We're hitting that point right now, so our operators would be wise to remember that.

And the third thing I would say is the social license to operate sports betting and partner with the leagues, all that's predicated on public acceptance. And that is a hard thing to measure and you don't know what will change that usually until too late.

If there is a backlash, operators would do well to have as many responsible gambling programs and policies and procedures in place as an affirmative defense. I don't think anybody's going to make sports betting illegal again, but what government giveth government can taketh away. And there's a whole lot of things they can restrict, such as advertising and credit, that could dramatically affect the market.

There are a lot of good reasons why operators should think long-term and care about responsible gambling as we look at the fifth-year anniversary of the PASPA repeal.

As I look back at the last five years, I think sports betting sponsorship deals with colleges have generated the biggest negative public reactions. That's one of the first things we hear when we are on Capitol Hill.

We're five years since the PASPA repeal, five years from now, what would you like to see? Not the utopian version, but something tangible that we can do in the next five years?

KEITH WHYTE: A set of national minimum standards on responsible gambling, so that finally every jurisdiction that regulates gambling—48 states, some 200 tribes, 47 state lotteries—can have a common consumer protection framework with the same general protections.

As an example, a framework where you only have to exclude yourself once instead of with hundreds of different locations. Where there is one national helpline number that's promoted everywhere that gets people to local help. I think in five years, that's doable, but we'll have to tackle some tough things.

Things like what is the appropriate minimum age to gamble, is it 18 or 21? The science points towards the elder age, but there's a lot of segments of the industry who allow gambling at 18. But eventually we have to, as a field, as an industry, as a society, find consensus.

Because when you've got hundreds of different regulations ranging from almost nothing to New Jersey style, consumers suffer. And the people that suffer the most are people with gambling problems.

There's so much risk for gambling problems that could easily be mitigated by just getting some harmonization of these regulations.

I think if we did that on the responsible gambling side, there's a lot of benefit.

STEVE RUDDOCK: Do you see that as a federal bill? Or is that an organization that creates minimum standards. How do you see that playing out?

KEITH WHYTE: That's a great question. I'll show my hand a little bit. We've spent 50 years encouraging the industry to get together and do this themselves. They're the folks with a lot of power who reap enormous profits. But to date there has not been much progress on the national level.

I think they're changing a little bit because they realize achieving compliance across the hundreds of jurisdictions in the U.S. is almost impossible. But I think the time for the industry to take the lead has probably passed. When can we get all the regulators together? Well, the National Council's now offering free membership to regulatory agencies. And the more we engage with them, the more we develop our blueprint for common responsible gambling standards.

We recently did a benchmarking report on the iGaming states and their responsible regulations. We're expanding that to all the online sports spending states. So, the more we map where the regulations are, and show each state where there's deficits, we're going to continue to push to close those gaps.

It might well take national level, federal level action. That's not our first choice. That's not our second choice.

But we may have to try something else different.

Still, we are making progress. Last week we released the brand standards for 800-GAMBLER, the national helpline number that works in all 50 states by referring callers to all the existing local contact centers. It's like 9-1-1, you call once and you get routed to the correct place.

As we've seen this national explosion of sports betting advertising everywhere over the past five years, we've been able to make progress in getting all the states to allow operators to promote the national number. We're not there yet, there's still some obstacles, but I think by the end of this year a majority of states will have signed off, and then in five years, I would hope that everyone is using the national problem gambling number.

If we can do that with a national number, maybe then we can start to roll out a common self-exclusion process or agree to a nationwide minimum age. It's doable. It's just going to take a revolution in responsible gambling.

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