With sports bets in the billions, Colorado lags on tackling problem gambling

Only a matter of months after his 12-step meetings in a church basement transitioned to Zoom calls with the pandemic lockdown, a former sports bettor named Robby started seeing the next generation of problem gamblers begin to show their faces on his computer screen.

He noticed the first new members once legalized sports betting launched in Colorado in May of 2020, and saw their numbers increase after major U.S. sports returned to action following a COVID pause. The faces, almost all of them young men, tell stories that echo his own past: A fun social activity with friends somehow veered off the rails.

“Just about 100% of the time it starts out that way,” says Robby, a 52-year-old school teacher in the Denver metro area who, though in recovery, spoke on the condition that only his first name be used because of the persistent stigma around gambling addiction. “But then, you start realizing, damn, I’m behind now and I’ve got to chase this (lost) money. And your brain starts going on that hamster wheel again.”

Call it a business spike, a tax windfall or a massive social experiment. By any description, Colorado’s sports betting frenzy passed a milestone recently: $5 billion wagered on everything from game outcomes to individual performances to wacky proposition bets.

Nearly three months shy of the two-year anniversary of sports gambling’s legalization, that figure signaled massive year-over-year growth fueled by more operators, a nonstop marketing blitz and technology that has accelerated the shift of sports wagering from back rooms to family rooms. It more than doubled tax revenue earmarked for the state’s plan to conserve and protect water.

But the robust statistics also contrast sharply with Colorado’s historically small commitment, dating back to the launch of casinos in 1991, to deal with the fallout from problem gambling. Roughly $100,000 a year from the Limited Gaming Impact Fund went toward programs to provide money for treatment to uninsured or underinsured individuals and also to increase the number of counselors with problem gambling certification — a shortage that persists.

The bill that legalized sports wagering in 2020 earmarks $130,000 annually to fund a 24-hour helpline (800-522-4700) as well as prevention, education, treatment and workforce development. Although unspecified substance abuse or mental health grant funding could augment that, critics contend the state’s commitment falls well short of the need.

Colorado hasn’t prioritized problem gaming — ever. And so this isn’t just a sports-betting issue.”

Alec Garnett, Colorado House speaker

A 2016 survey referenced by the Colorado Office of Behavioral Health’s 2020 strategic plan listed Delaware as the leading per capita investment in problem gambling services in the U.S. at $1.46. Colorado committed 3 cents, ranking 37th out of 40 states that provide public funding.

A national survey a year before the arrival of legal sports betting showed that 77% of Coloradans reported gambling in the previous year, compared with 73% nationally. The OBH’s strategic plan estimated that the state mirrored the 2.4% national average of problem gamblers among the adult population.

But the boom in sports wagering has refocused attention on a long-festering issue, says House Speaker Alec Garnett. The Denver Democrat is one of the architects of the legalization bill that followed narrow approval of legal sports gambling in a statewide vote.

“Colorado hasn’t prioritized problem gaming — ever,” Garnett says. “And so this isn’t just a sports-betting issue. This is an issue around gambling and making sure that people have access to the resources that they need, whether it’s sports betting or table games or slots or other forms of gambling. So it’s time for Colorado to kind of take the lead in that position.”

John Bundrick, a certified gambling counselor and outpatient provider in private practice in Salida, zeroes in on two basic flaws in Colorado’s sports betting rollout: One, it underestimated the speed at which sports gambling would grow; and two, it had no plan in place to deal with the negative impact from an activity now so fundamentally driven by technology.

The state currently lists 25 online operators, whose apps account for more than 99% of the legal action. Brick-and-mortar sports books — Colorado has 17 — have become an afterthought as bettors overwhelmingly wager before and even during games on their computers or smartphones from virtually anywhere. Early research on legal sports betting shows individuals who use mobile devices have higher rates of problem gambling — and overall, the number of Americans who bet on sports grew 30%, by 15.3 million bettors, in an 18-month period ending in 2021.

“I don’t think they did their research,” Bundrick says of legalization’s proponents. “Not only on the nature of growth, but the style of betting that is available with these apps. The speed with which you can place bets, withdraw your cash, move into another bet is so different from what you’d think of five years ago.”

Nancy Lantz, a certified gambling counselor in the Denver metro area, watched the rollout of limited stakes casino gambling back in 1991 and recalls that the games were in full swing well before there was even a problem gambling helpline in place. Once one was established, she says, the state initially contracted with Nebraska to answer the calls because “for years, we had no funds for it.”

Like Bundrick, she feels the explosion of sports betting caught Colorado flat-footed.

“We don’t fully understand how to set up prevention measures around this,” Lantz says. “Every other ad on TV or radio is around sports betting. It’s like a perfect storm. And then we ended up with COVID, so people can’t leave the house, and it’s so easy to do sports betting online. For a while, (people were) betting on almost anything, anything to keep the action going.”

“A choice, not an oversight”

Colorado’s eyebrow-raising sports wagering numbers quantify the cultural sea change that has brought gambling on athletic competition into the mainstream — including through partnerships with major pro sports and even colleges that once publicly recoiled from the very idea of sports wagering.

Ads dangle enticing propositions to potential sports bettors and gambling-focused sports media have proliferated, offering content to feed the growing interest of fans keen on maximizing their success.

Keith Whyte, executive director of the Washington, D.C.-based National Council on Problem Gambling, notes that his organization testified in detail about what could lie ahead for Colorado, and how the state could prepare for it, as legislators considered the bill legalizing sports betting in 2019. He labels the state’s problem gambling response “completely insufficient,” and calls it “a choice, not an oversight.”

Resources
24/7 problem gambling helpline: 800-522-4700
Problem Gambling Coalition of Colorado
National Council on Problem Gambling

“I do think there is a lot of cynicism amongst state legislators who see this as a painless windfall,” Whyte says, referring to the influx of tax dollars. “And it’s also true that the social costs are hard to count. We call problem gambling the hidden addiction. You don’t have some of the obvious physical signs like you would with someone who has an opioid problem. The substance that people abuse is money. And that’s easy to conceal.” 

Colorado has been among the first states to see a major university outside of Nevada buy into sports betting as a revenue enhancer. The University of Colorado Boulder’s sponsorship deal with PointsBet attracted national attention — not only for its economic implications but also for the risk to a demographic particularly vulnerable to sports betting.

Consider, notes the NCPG’s Whyte, that young, male online sports bettors are the group with the highest rates of risky behavior. Layer on top of that the massive popularity of college sports and even the number of students who are engaged in college athletics. Several studies have shown athletes being at particular risk for gambling problems.

“College campuses,” he says, “are ground zero.”

Even when sports wagering was illegal, the problem gambler Robby — whose interest began when he ran $1 pools for his high school teachers — fell deep into trouble once he found a college, and a bookie, and upped the ante. One failed marriage and two personal bankruptcies later, he finally faced his gambling problem through the 12-step program in 2014 — and hasn’t wagered since.

But he continues to attend meetings to lend his experience to the next wave.

When sports betting went legal in Colorado, and the commercials began to flood the airwaves and appear on billboards, he wasn’t tempted to relapse into a world of quick, clean online apps instead of shady characters and fraught phone calls to offshore sites. 

But he was angry. He’d yell profanities at the TV simply because the on-screen pitches reminded him of the pain and loss he experienced when his own behavior was out of control. 

“I am very secure in my recovery,” Robby says. “I just feel for people who I know never would have entered this realm that will probably go through suffering in their life. But I know that I can’t solve all the problems in the world. I just have to take care of me.”

Finding the right resources isn’t always easy. The 12-step programs work for some, but while problem gambling can overlap with issues like substance abuse, counseling geared toward other addictions doesn’t always address issues in the way counselors specifically certified to treat gambling can.

Recovery also can be made more difficult by lingering societal perception that gambling addiction amounts to a moral weakness rather than a medical disorder, says NCPG’s Whyte, echoing public attitudes about substance abuse 20-30 years ago. Financial problems that often go hand in hand with problem gambling also can limit access to treatment.

The NCPG suggested 1% of total gaming revenue — counting casinos and lottery – as a benchmark for spending to address problem gambling during testimony in Colorado. But it also encouraged a comprehensive needs assessment to come up with an even better number. 

“There is a path forward for Colorado if they want to take responsible gambling seriously,” Whyte says. “But it’s a serious issue that requires a serious commitment, and it’s pretty clear that’s not been the way it’s been perceived in the past.”

Helpline calls spike

From 2018 to 2020, lawmakers channeled annual Limited Gaming Impact Fund dollars to producing a legislative report and strategic plan that left zero funding to actually deal with problem gambling.

Then came legalized sports betting.

From 2020 to 2021, calls and texts to Colorado’s helpline jumped 45% — from 6,688 to 9,686, says Peggy Brown, board president of the Problem Gambling Coalition of Colorado, a nonprofit that seeks to address problem gambling while, like Whyte’s national organization, remaining neutral on legalization. And with the continued expansion and marketing of operators in the state, she expects those numbers to continue climbing.

“Sports betting is, at a minimum, twice as addictive as any of the other forms of gambling,” Brown says. “It’s taxing resources.”

From the $130,000 earmarked by statute for problem gambling, $30,000 goes toward running the helpline. After administrative costs, that leaves less than $100,000 in state funding for proposals to address a laundry list of needs. 

Brown, whose organization has overseen the helpline since 1995, will devote much of the money to a prevention and public awareness campaign aimed at adult males 21 to 34. Still in the planning stages is a program to address problem gambling on Colorado’s college campuses. Starting next month, Colorado counselors will be able to attend webinars to work toward national certification in problem gambling. Currently, the PGCC lists only seven counselors statewide who hold that credential. 

“That’s a lot to fit under 90 grand,” says Brown, who remains optimistic that lawmakers will re-examine how Colorado deals with gambling addiction.

Garnett, the state House speaker, says he expects to run a “robust problem gaming bill” this session as well as another that will address shortcomings in the state’s existing gambling legislation. While he feels that the rollout of legal sports betting has largely succeeded in moving activity from the black market to the regulated marketplace, he acknowledges that some of the promotional enticements from operators may need another look.

“There are some things that we’ve done around boosts and promotions and other things that have incentivized consumers to come into the regulated marketplace that now we can start to think through unwinding,” Garnett says. “So I think you’ll see what I would call a clean-up bill going forward and then a problem gaming bill. “

In terms of funding, Garnett points to the “Hold Harmless Fund,” created to reimburse organizations financially harmed by the impact of sports betting, as a possible source, rather than revisiting the existing allocation of tax revenue to state water projects — a popular feature that helped fuel the narrow win for sports betting at the ballot box.

“I don’t think we have to pit voter intent around water against creating a better mental and behavioral health system for problem gaming,” Garnett says. “I think there’s ways for us to carve out consistent revenue and seed revenue that will help get these ideas off the ground.”

Everything moves faster

Clinical experts point out that this newer iteration of problem gambling tends to escalate faster than previous forms of social gambling. Casino gambling, for instance, featured built-in speed bumps, because it took time and effort to get to physical locations in the first place.

In that scenario, says Bundrick, the Salida counselor, it could take five years or so before problem gambling emerged.

With the help of technology, the process moves faster. And while some reports show an increase in women betting on sports, Bundrick says he’s seeing primarily younger adult males. Some may have come into their first job that provides an independent source of income, or — if they’re at the tail end of their college years — they may still have access to student loans or “parental bailouts.”

Not only is younger bettors’ concept of money different, but the advertising pitches appear to offer something close to a can’t-miss proposition. Some clinicians compare the seduction to a drug dealer’s spiel: The first one’s free. 

“The incentivization is different,” Bundrick says. “It’s just, ‘Hey, place a bet, we’re going to guarantee a win.’ From an addiction standpoint, there’s just nothing like it. So that can already create some real distorted thoughts around, ‘Oh, yeah, this is going to be easy.’”

He’s heard the same refrain from many young sports bettors over the last few months. After they’ve collected on a big win, they start to envision a fun recreational pastime as a side gig, if not a primary means of making money.

“There’s just a lot of weird pieces to this that it just seemed like 10 years ago there would have been harsher boundaries,” Bundrick says. “And the boundaries now are very amorphous.”

That shifting landscape led Joshua Grubbs, a psychology professor and researcher at Bowling Green State University in Ohio, to plan a grant-funded, long-term study that zeroes in on sports wagering in the U.S. Fueled by fantasy sports action and compounded by growing legalization and, particularly, technology like mobile apps, sports betting has raised new questions about how this piece of problem gambling differs from others.

But he adds that little has been done to find answers.

“Historically, both research and treatment of gambling disorders has been comically underfunded,” Grubbs says. “And I use that ‘comically’ somewhat sarcastically — it’s quite frankly not funny at all. Gambling, and all behavioral addictions, have been the redheaded stepchild of addiction research for generations now, and have just never received the same types of fundings from federal agencies that other addictions have.”

His study will follow 4,000 American adults over two years to determine betting behaviors, prevalence of depression and anxiety, PTSD and substance addiction. It will track the participants intermittently “to see if we can figure out what’s predicting people transitioning from not having a problem to probably having a problem,” as well as trying to isolate the specific risk factors.

With the increasing popularity of sports betting, Grubbs says, his worst-case scenario is that we’ll see “exploding levels of gambling addiction.” That said, he doesn’t think the problem gambling population will ever exceed 1 in 20 people — and that estimate could well be on the high side.

But even at those numbers, he adds, the available resources for treatment remain woefully inadequate — and most counselors are ill-equipped to treat gambling addiction.

Brown, the volunteer board president for the state coalition, successfully weathered her own 25-year battle with problem gambling — starting with dog racing, then casino gambling and, when limited stakes blackjack didn’t give her the rush she craved, slot machines. She quit in 1998, through a 12-step program whose final step pointed her toward service.

Late last month, she picked up the office phone and found herself talking to a 26-year-old former college athlete who developed a sports betting habit about two years ago, when it became legal in Colorado. Although employed with a six-figure income, he managed to rack up $50,000 in debt. Embarrassment gave way to depression and suicidal thoughts. 

After nearly an hour on the phone she connected him with a professional counselor. She says his story is typical of what she hears “several times a week.”

“I’m a little different in that I can say I understand, been there, done that, hear you,” Brown says. “I told him there’s help. There’s hope.”