Mobile Sports Betting, Gambling Expansion and Problem Gambling: We Have a Responsibility

100 Great Oaks Blvd., Suite 104 Albany, NY 12203
                                                                Voice: 518-867-4084 ▪ Fax: 518-867-4087
                                                                 Email: council@nyproblemgambling.org
                                                                         NYS HOPEline 1-877-8-HOPENY

February 10, 2021

Mobile Sports Betting, Gambling Expansion and Problem Gambling: We Have a Responsibility

The New York Council on Problem Gambling (NYCPG) takes a neutral stance on gambling, however, it is
our long-standing belief that New York State (NYS) government is significantly challenged by being both
the promoter and the regulator of legalized gambling in NYS. Therefore, NYCPG is in support of
the Governor’s proposed decoupling of the Gaming Commission and Gaming Inspector General. Further
the Council recommends the formation of a Division of Problem Gambling specifically dedicated to
developing and monitoring problem gambling services in NYS.

In 2021 we are once again facing the expansion of gaming opportunities in NYS. With the legalization of
mobile sports betting, online availability of Lottery play and deregulation of Quick Draw and the Lottery,
we must prepare for both the immediate and long-term consequences for NYers who will be affected.
Families will be devastated-financial loss, employment impacts, family dissolution, domestic violence
and suicidality are just a few of the challenges they will face. These families will suffer alongside the
individual with a gambling disorder. How do we as a state plan to mitigate the impacts to them? We
should not, we cannot, afford to wait to begin funding and delivering the necessary measures to reduce
the impacts. State revenue generation is the priority, but it cannot overshadow the fact that we have an
obligation, a social responsibility, to prevent and protect NYers from the harms related to the business
of gambling revenue generation.

In NJ sports betting has been legal since the summer of 2018. According to the Council on Compulsive
Gambling of New Jersey,

        “Helpline calls where sports gambling was referenced as the primary issue PRIOR to 2018
        legalization ranged from 1% – 5% per year. Calls received on the 800-GAMBLER Helpline, since
        June 2018 where sports gambling is a PRIMARY issue jumped to 10.8% of all helpline calls for
        period ending October 31st, 2019. In addition, the Councils treatment providers have reported
        that over 50% of their practice is treatment geared toward those who are struggling with sports
        gambling related issues.”i

Additionally, the following chart shows the correlations between increased sports betting handle and an
increase in sports betting related problem gambling helpline calls by month in NJ.

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This correlation has also been reported by the Council on Compulsive Gambling of Pennsylvania.
Pennsylvania first launched sports betting in 2018 and expanded online in 2019. The state’s helpline
data shows the following:

    •   The calls from individuals reporting problems primarily from internet forms of gambling
        increased 285% from 65 in 2019 to 250 in 2020.

    •   From those describing sports betting as their primary problem, help line calls increased 66%.

    •   While calls from older individuals fell — presumably due to months of casino closures — the
        number from those in the 25-to-34 age group increased from 183 in 2019 to last year’s 254. The
        18-to-24 age group calls increased from 80 to 94. ii
These staggering statistics are even more compounded by the ability to gamble on mobile devices. This
has recently been supported by a study released by Winters and Derevensky, where the research shows
that mobile device bettors were found to have had a higher proportion of problem gambling (22%) than
were individuals who used other modes of betting (18% offline, 16% PC). iii
In New York we cannot ignore what our neighboring states are reporting, we know problem gambling
calls for help will increase. What we don’t know is what impact all of this will have on youth in the short
or long term. We can however learn from our past, twenty, even ten, years ago if we had known what
the opioid crisis would look like in NYS we surely would have taken measures to avoid the epidemic of
death and family destruction we are facing today. I think we all can agree we would have rather
invested in prevention- educating prescribers and pharmacists, funding law enforcement, developing
other solutions to pain management, than to be dealing with the aftermath. We have that opportunity
when it comes to mobile sports betting.
In the immediate, The Council calls for efforts to prepare NY for this expansion that are comparable to
efforts that will be made to launch new gaming opportunities. To be sure, the industry will advertise the
new gambling opportunities widely, create user friendly mobile platform applications, and focus strongly
on customer recruitment. How many millions of dollars will be dedicated to developing this business in
NY? How can we move forward without a solid plan to do the same for protection? Problem gambling

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services should be funded at a level that allows for wide promotion, the creation of mobile platform
applications for education and assistance, and focuses on client recruitment, retention, and recovery.
The 2021 Spectrum Gaming Market Study Reportiv for NYS cites that,
        “According to a 2016 report by the Association of Problem Gambling Service Administrators
        (“APGSA”) in collaboration with the National Council on Problem Gambling (“NCPG”), New York
        ranked 24th out of 50 states “in terms of per capita public funds invested in problem gambling
        services. The average per capita allocation of public funds for problem gambling services in the
        40 states with publicly funded services was 37 cents; New York’s per capita public investment
        was 15 cents.”v
Currently all problem gambling services in NYS are funded at a total of $5.7 million. The majority of the
funds have been utilized to begin building the infrastructure that was sorely lacking and needed to
provide problem gambling treatment. As is the case with gaming industry, or any product and service
for that matter, simply building a system of care does not ensure that individuals and families will be
aware the service exists. One of the largest areas of insufficient funding for problem gambling services is
advertising and marketing. By contrast, Draft Kings alone spent $203 million in sales and marketing in
the 3rd quarter of 2020vi. According to the NYS Comptrollers 2020 report vii on gaming revenues and
problem gambling, the state-run NY Lottery spent 90 million to advertise its products in fiscal year 2019-
2020. For 2018-19 fiscal year combined state-sanctioned gambling marketing was $272 million. Like the
Comptroller, we also believe that “policymakers should consider whether resources for such programs
appropriately balance the dollars spent to promote State-authorized gaming.”
The Council maintains that a total of $15 million is needed for comprehensive problem gambling
services statewide. We commend the NYS Legislature’s mobile sports betting bill for including that 5% of
85% of tax revenues be dedicated to problem gambling services. In absence of the bill’s approval
however, we remain troubled by the lack of dedicated funding for problem gambling services outlined in
the Governor’s budget proposal. The Council recommends that sports betting licensees or operators be
required to pay dedicated fees directly into the State Problem Gambling Services fund on an annual
basis. Much like the annual fees paid by commercial casinos that are dedicated to problem gambling,
the mobile sports betting industry should also be responsible for contributing to the solution. More
specifically we recommend, at minimum, the following:

    •   Problem gambling prevention and preparation support fee calculated at 2% of the initial, one-
        time mobile sports betting licensing fee.
    •   An annual problem gambling support fee calculated at 2% of the required annual NYS mobile
        gaming licensing fee

    •   An annual problem gambling advertising and marketing fee calculated at 5% of the licensee's/
        operator’s annual NYS targeted advertising and marketing expenses.

    •   All fines paid specific to NY in violation of regulations related to responsible and/ or problem
        gambling be dedicated to environmental prevention efforts to combat the violations.
In closing, while NY is focused on closing the budget gap, it cannot be at the expense of suffering NYers.
As it seems the expansion into mobile gambling for both the lottery and sports is now an inevitable
reality, we must be socially responsible enough as a state to prepare. We must provide truthful
education for the masses, protection for those at risk, and treatment and support for those who will
suffer. Several years ago, Governor Cuomo stated, “…all gaming activity conducted in the state will be

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of the highest integrity, credibility and quality, and that the best interests of the public, both gaming and
non-gaming, will be served.” To that end, dedicated funding for each newly legalized form of gambling
introduced in New York State should no longer be a question, it should be a given.
To be clear, as an organization that takes a neutral stance on gambling, we have no comment on efforts
by NYS Government to raise revenue through expansion. But as the advocates for problem gamblers,
their families and for adequate services, we demand that the state show the same humanity as we begin
to recover from the COVID-19 pandemic, as it did while we were in the heart of it. This can only be done
with actions that demonstrate there is NO “acceptable loss of life” in re-opening our economy.

iSPORTS BETTING AND THE IMPACT ON THE PROBLEM GAMBLER AND THE FAMILY: An Analysis of the
800GAMBLER Helpline
https://800gambler.org/sports-betting-and-the-impact-on-the-problem-gambler/

ii
 PROBLEM GAMBLING TIED TO INTERNET AND SPORTS WAGERING EMERGED STRONGLY IN 2020 IN PA
https://www.pennbets.com/problem-gambling-internet-sports-wagering-emerged-2020/

iii
 A Review of Sports Wagering: Prevalence, Characteristics of Sports Bettors, and Association with
Problem Gambling
https://www.ncpgambling.org/wp-content/uploads/2020/01/sports-gambling_NCPGLitRvw.pdf

ivGaming Market Study: State of New York
https://gaming.ny.gov/pdf/Spectrum%20New%20York%20Gaming%20Study%20Main%20Report,%20Fi
nal.pdf

v2016 Survey of Problem Gambling Services in the United States. Boston MA: Association of Problem
Gambling Service Administrators (APGSA).
https://www.ncpgambling.org/wp-content/uploads/2019/01/2016-Survey-of-PGS-in-US_FULL-REPORT-
FINAL-12-19-2017-1-18.pdf

viDRAFTKINGS REPORTS THIRD QUARTER RESULTS AND RAISES 2020 REVENUE GUIDANCE
https://draftkings.gcs-web.com/news-releases/news-release-details/draftkings-reports-third-quarter-
results-and-raises-2020-revenue

vii
  A Question of Balance Gaming Revenues and Problem Gambling in New York State
https://www.osc.state.ny.us/files/reports/special-topics/pdf/gaming-report.pdf
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                                      www.nyproblemgambling.org

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