🎲💸 "Should I Sports Bet?" | 🔑🔓 An Unlocked 'Big Question' Edition.

The money stuff that you wish they taught in school

Mar 05, 2024

I love watching sports, and playing them socially. For me and my friends, it’s a great topic to argue about (in a fun way) in our group chats, and a way to catch up regularly.

What I don’t love is the amount of ads that I have to see every time I’m watching that tell me that I should be betting on what I’m watching.

Apparently I’m not alone.

Recent research shows that 7 out of every 10 Australians reckon there is too much gambling advertising out there. With the major winter football codes starting this week, chances are you’re about to see a LOT more ads. And that’s even more so because those of you who read this are the absolute prime targets of those ads. You represent the biggest pool of potential new customers to this industry. And they will target you relentlessly wherever you are: on YouTube, TikTok and Instagram.

All of that makes this ‘Big Question’ newsletter from last year really timely.

Because gambling is such a big, important issue for your age group, I’ve decided to unlock this previously subscriber only article for you all to read.

Here’s what I hope it helps with:

Making the right decision for you about sports betting, and,
Giving you a better understanding what to look out for from friends, partners and siblings (or even parents) when it comes to warning signs around gambling.

Q: “Is it ok to get a sports betting account? The ads are everywhere so it must be fine right?”
-Bailey, Qld

Hey Bailey. This is a great question. It affects a lot of people in Australia. But I know that there’s probably a lot of you reading this who think ‘well I’m never going to gamble or sign up to one of these services, so this doesn’t apply to me.’

But it might. Statistically, it is very likely that a friend, family member or partner will sign up at some point. It’s even more likely if you’re in the 18-30 age group.

So this newsletter will be useful for you too, so you can understand how it all works, and signs to look out for in people you care about.

One thing I want to get out of the way up top. Gambling can be an emotional topic. Many people have very strong opinions about it (both positive and negative).

A short reminder: the following post is an example of the type of question and answer that is in the ‘Big Question’ editions of Money Chats.

Big Question editions are normally only for paid subs. I wrote in more detail about the extra stuff that paid subs get here.

🔑🔓 If you’d like to read all of the ‘Big Question posts when they first get published then you might like to choose to become a paid subscriber. You can see your options by clicking the button below (and unsubscribe any time).

Now, let’s get into this Big Question.

Answer

This answer is broken up into the following sections:

Key Facts
Key Myths
Why is Gambling Legal?
A Bigger Issue
Practical Tips

Gambling: Key Facts ✅

It’s not my job to tell you, or anyone, what to do. But I can provide you facts and data. Then each you can take that information and make a decision that you feel is right for you.

So here’s some key facts to get us started:

Fact: gambling is legal in Australia.
Fact: there have been attempts to make gambling illegal at different times in Australia. They didn’t work.
Facts: there are many forms of legalised gambling. Sports betting is one. Betting on racing (horses, greyhounds) is another. So are casino games (blackjack, roulette) and lotteries or ‘lotto’ games. And electronic gaming machines, poker machines or ‘pokies’ are another.
Fact: sports betting is highly visible due to advertising.
Fact: sports betting is not the type of gambling that Australians lose the most money on (we’ll get to that soon).
Fact: gambling can be addictive.
Fact: many people can gamble without becoming addicted.
Fact: some people become addicted to gambling and lose thousands of dollars in a short amount of time.
Fact: gambling addiction is a real disease. It can have very negative physical and mental health consequences, as well as negative consequences for families and relationships.
Fact: gambling attracts a lot of different opinions. Some people believe gambling should be banned entirely. Others believe that all advertising of gambling should be banned. And others believe it is a harmless activity that should not be banned.

Gambling: Key Myths 🙅🏽‍♂️

Myth: gambling is harmless / is just a bit of fun. It is for some. It is incredibly damaging for others.
Myth: gambling is just part of sport, it’s always been that way. It’s not. Widespread online gambling is only a pretty recent development (the late 1990s).
Myth: people who don’t gamble are not fun. Absolute rubbish.
Myth: you need to gamble to enjoy sport. Also absolute rubbish. Sport is great on its own.
Myth: you can ‘outsmart’ betting companies, OR be especially skilled OR have a ‘system’ that means you win most of the time. Nope. Just plain false. People who think this are fooling themselves into thinking they are special. They’re not.

📺🖥📱 $300 Million Worth of Ads, Everywhere

Bailey, I’m not surprised you’ve seen the ads. They are everywhere. That’s because the gambling industry spends a lot of money to make sure you see them.

$300,000,000 in fact. Every year. That is an incredible amount of money spent on highly targeted, highly focussed advertising.

Is it worth it? For the gambling companies, studies suggest that it is. Work done by Australian researchers in 2018 and 2019 suggests that exposure to gambling ads makes us:

bet when we didn’t originally intend to,
bet more, and,
bet on things that are less likely to win (things that have higher odds).

So that’s partly why you might be thinking that ‘it must be fine’ to sign up. Because you’re human. Repetition in advertising works. It can make a product seem attractive to a target audience. And $300 million buys a lot of repetition. But just because there’s a lot of ads, it doesn’t mean that signing up to an online betting service is the right choice for you.

It might help to understand why gambling is legal in the first place.

Why Is Gambling Legal?

Why does gambling exist? It’s pretty simple. A lot of people like betting. They always have.

When enough people like an activity there is demand.
And where there is demand plus a ban, people get creative about serving that demand.
When something becomes illegal, but there’s still enough demand for it, the activity becomes hidden from view. Sure, governments and law enforcement try to enforce the law. But it doesn’t really work.

There’s a long history of trying to ban activities like this that some people choose to call ‘bad’ or ‘evil’. At different times in history there have been attempts by governments to ban gambling and alcohol.

🇺🇸🍺 Banning Alcohol

The biggest experiment of doing this was ‘Prohibition’ in the United States. The Government outlawed alcohol. Nationwide. Yes, really. Between 1920 and 1933 it was illegal to produce, import, transport or sell alcohol in America.

It didn’t work.

Legitimate bars and clubs were shut down. Breweries were put out of business. But alcohol didn’t go away.

Bars were replaced by secret drinking locations called ‘speakeasies’, often in the basements of buildings, where people went to drink and dance all night. Large breweries were replaced by smaller scale ‘bootleg’ alcohol makers who brewed high potency ‘moonshine’ liquor in easy to hide locations.

Organised crime moved in to run these places. The gangsters got rich and powerful. And by 1933 the whole thing was over. The law was changed, the Prohibition era ended, and alcohol was back.

What usually ends up happening is that governments choose to legalise the activity, put rules around it, and tax it.

A Bigger Issue

Sports betting gets a lot of negative attention. Part of that stems from just how visible it is. $300 million buys a LOT of ads on TV during sporting broadcasts. Increasingly, it also pays for a lot of ads on YouTube, Instagram and TikTok where ad spend can be hyper-targeted at younger Australians on the platforms where they spend the most time.

But it’s not where the biggest issue is. When I say ‘biggest issue’ I mean it in the sense of the amount of dollars bet, and lost.

For the most recent full, uninterrupted year, gambling losses per Australian adult were $1,324.
The amount lost on sports and racing betting was $260. That’s about 20% of the total.
Another 30% was made up mostly of losses in casinos (20%) and playing lotteries (10%).
A far bigger amount, $658 per person, was lost on electronic gaming machines (pokies). That was 50% of the total.

Have you noticed the quirk in the stats above yet? Many Australian adults don’t bet. My parents don’t. Neither do my in-laws. So if many Australians never bet, then the averages don’t tell the full story. It means that those that do bet are losing MORE than $658 per year to pokies. Thousands more in fact.

In fact, in NSW alone, $22 million was lost to poker machines in 2023. Per day. That put it on track to reach a total of $8 billion lost by individuals over the full year. In just one state.

How do the pokies do it?

Because they are specifically designed to be addictive.
The flashing lights, the music and the interactive features. These are all used to trigger chemical reactions (dopamine release) in our brains that make us stay with the behaviour.
The behaviour is pressing the buttons.
Pressing those buttons costs money for each ‘spin’.
For some people that behaviour becomes compulsive and almost involuntary. More spins are needed to feed the urge.
More money goes in.
And for some, that results in addiction. And the loss of tens of thousands of dollars very quickly.

Here’s another stat that shocked me a little:

Australia has a tiny 0.33% of the world’s population.
We punch above our weight economically. We have a roughly 1% share of the world economy.
But there’s one area where we are world leaders. Pokie machines. We have a staggering 20% of all pokies globally. Over 200,000 of them.

Why is this? It’s because in most of the world pokie machines or ‘slot machines’ are restricted to casinos.

In Australia we don’t do that.

The law here allows pokie machines in the inner cities, suburbs and country towns by allowing pubs, clubs and RSL’s to operate them. Western Australia is the one exception.

So the data points to one clear fact: Australians lose more on pokies than we do betting on sport. Something to keep in mind.

Practical Tips

A lot of the advice around potentially risky activities given to teens is a bit too simple. It basically amounts to ‘don’t do it’. Yes, one option is to never get a sports betting account. That’s a simple way to avoid the risk of potential addiction and harm. That advice could also be given about alcohol or decisions in relationships.

But sometimes, that advice isn’t realistic.

Sports betting and gambling is legal. Many people choose to do it. For those that do it makes sense to provide some practical advice and warning signs to be aware of so they can recognise them.

So the following are just some personal observations from my friendship group about our personal ‘do’s’ and ‘don’t’s’ around betting. They’re not ‘expert advice’ or anything like that. But they might be useful to think about / keep in the back of your mind if you do ever decide to sign up to one of these services (or if someone you know does).

Things NOT To Do 🙅🏽‍♂️

Don’t bet when you’ve been drinking large amounts of alcohol. Alcohol affects judgement and increases risk taking. That increases your chance of betting larger amounts, and losing those bets.
Don’t bet when you’re angry, upset or lonely. This is when you are vulnerable. There are about 4,000 better things you can do when you’re feeling these things. Speaking to someone or getting outside for some exercise are good options.
Don’t bet when you’re alone.
Don’t hide how much you’re betting from others. If you find yourself doing this, it’s a sign you might have a problem.
Don’t EVER gamble to try and win enough money to pay a bill or expense that you don’t have enough money for. There are dozens of better options than this. If you find yourself doing this, it’s a sign you might have a problem.

Things to Consider DOING ✅

Treat gambling like it's very occasional entertainment (NOT a hobby, NOT a skill, NOT a way to make money).
Tell someone who cares about you when you sign up to a betting platform. That will give them permission to talk to you about it if they ever think that’s needed.
Assume you’ll lose every bet. The odds are against you winning.
Realise you aren’t smarter or better than all the other people who bet (and lose) money.
Understand that the saying ‘the house always wins’ is true. Gambling is a highly profitable business for companies because the ‘house’ (casinos, betting companies, pokie machine owners) always make more money than gamblers. Otherwise they’d go out of business and not exist, right?
Keep a notes app on your phone and record every time you put money into your gambling account. Set a reminder to check it at the end of every month. If the total number in there makes you uncomfortable, upset, or angry, that’s a sign you might have a problem. Give yourself a pause from betting any more. Talk to someone. If you find yourself skipping adding an entry or pretending a deposit didn’t happen, that’s a sign you might have a problem. Talk to someone.

Bailey, I hope that you, and anyone else reading has learned something that’s useful for your decision making in the newsletter above. If you have any further questions or feedback, I’d love to hear it.

Thanks again for such a great question,

-Ry

Sources / Reference List

https://www.qgso.qld.gov.au/issues/2646/australian-gambling-statistics-38th-edn-1995-96-2020-21.pdf

https://www.aihw.gov.au/reports/australias-welfare/gambling#Gambling-expenditure

https://www.khanacademy.org/humanities/us-history/rise-to-world-power/1920s-america/a/prohibition

https://responsiblegambling.vic.gov.au/resources/publications/effects-of-wagering-marketing-on-vulnerable-adults-408/

https://akjournals.com/view/journals/2006/8/1/article-p146.xml