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Gov. Laura Kelly, who signed a bill in May legalizing sports betting in Kansas, placed the state's first bet in September on the Kansas City Chiefs. In three months, $536 million has been wagered in Kansas on sporting events. Kansas Lottery ticket sales surged in the period while revenue at the state's four casinos declined. (Submitted)
Outrage is my beat.
Somebody asked me the other day what exactly my beat was in writing a regular opinion column. The query came during a phone call with a producer for a television documentary while she was doing a pre-interview to decide if anything I had to say was compelling enough to appear on camera. It was an unexpected question — always the best kind — and I had an unexpectedly quick answer.
Outrage, I said. Specifically moral outrage.
Even though my answer was quick, it was true. I’m free to look for the kinds of stories I think will outrage other Kansans, or should. Then I provide commentary, often with some original reporting, mixed with history for context. I’ll throw in a personal anecdote or two. At times I do columns about other things, such as attempting to capture a seasonal mood or sharing a literary detective story with readers, but mostly I’m driven by outrage.
A good example of this is a new study showing how sports betting hits the most economically vulnerable households the hardest. The study reinforces what many of us feared instinctively when Kansas made sports gambling legal two years ago.
“The economic magnitude is large,” the study concluded. “The ratio of their income that low-savings households spend on betting is about 32% larger than how much high-savings households spend. … The legalization of sports betting may exacerbate existing financial strains for (low-income) households.”
The July 2024 study, conducted by a team that includes two researchers at the University of Kansas, used financial transactions from a large population of U.S. consumers to provide a comprehensive picture of activity on online gambling sites. The team sought to answer three questions: Does access to legalized sports betting encourage other forms of financial risk-taking, are there measurable impacts to household financial health, and do the effects vary across households with different financial or demographic characteristics.
The answer to these questions is summed up by the study’s title: “Gambling Away Stability: Sports Betting’s Impact on Vulnerable Households.”
Back in 2022, the Kansas Legislature got rolled by powerful sports betting lobbyists. As reported by the New York Times, our lawmakers were treated to whiskey and cigars and other perks by the lobby. They passed a law so deferential to the gaming industry they should have been ashamed, as Clay Wirestone, Kansas Reflector opinion editor, wrote last year.
The massive lobbying effort in statehouses across the country was spurred by the Supreme Court’s 2018 decision to strike down a near-national ban on sports gambling. For the 25 years previous, the only state where it had been legal to gamble on sports was Nevada.
In Kansas, sports gambling had been illegal for about a century before Gov. Laura Kelly placed the first legal wager on Sept. 1, 2022. She bet $15 on the Kansas City Chiefs to win the Super Bowl. The Chiefs won the following February, 38-35 over the Philadelphia Eagles.
Since then, Kansans have placed about $4 billion in bets through online apps or at casinos in the state. The state sports betting tax is 10%, but actual collections are lower because introductory “free play” promotions aren’t taxed. Since 2022, the state has collected about $18 million from sports betting.
Thirty-eight states now allow some form of sports betting.
Curious to learn more about the new study, I contacted KU researcher Kevin Pisciotta, one of its five authors. Pisciotta and fellow KU author Justin Balthrop were quick to answer my questions. Both are assistant professors of finance at the KU School of Business.
“Sports betting is an activity with very few long-term winners,” Pisciotta told me. “It’s one thing to substitute from one source of entertainment (like going to the movies) to sports betting, but a far different thing to take money away from savings, investment or to accumulate high-interest debt in order to try and ‘win’ at sports betting.”
The best general advice, Pisciotta said, is never to bet more than you can afford to lose.
The most surprising thing they learned from the study, the pair said, were the amounts spent on sports betting (which in the study they treated as a kind of high-risk investment) and what they described as “drawdowns from more boring, savings-oriented investments.”
The study covered almost all legal online sports betting in the U.S., from 2018 to September 2023. In that time period, sports betting spread to 25 states and the District of Columbia.
Bettors are more than twice as likely as non-bettors to have invested in cryptocurrencies or to have overdrawn their bank accounts, according to the study. They are four times more likely to have played online poker or to have purchased lottery tickets. Bettors in “financially constrained” households were also more likely to have higher credit card debt and to make lower monthly payments on that debt. The study also concluded, based on child tax credit data, that bettors with children made up a large fraction of the bettors in the sample.
“As low-income households allocate a growing portion of their income to betting,” the study said, “it is important to understand what ramifications this has for the overall financial health of these households.”
Balthrop and Pisciotta said their results also contradicted the conventional wisdom that new sports bettors would try it, have some fun, but eventually lose interest.
“Our results suggest (legalized gambling) has been pretty effective at switching people into sports bettors and hooking them once they start betting,” Pisciotta and Balthrop said in a joint statement. “On the negatives, it seems like the online component, and the so few frictions it has, plays an important role in affecting people’s savings and debt decisions.”
So, is sports betting good for society?
“We don’t have the answers on how to weigh the pros and cons,” they said, “but our evidence suggests making it less easy to bet online might reduce some of the negatives.”
While the study found sports betting does offer new sources of state revenue, it also cautioned about the financial risks for some households and urged lawmakers to do more to protect the vulnerable.
“It is imperative for policymakers to consider the broader financial implications of sports betting legalization,” the report said. “Targeted interventions, stricter regulation of gambling advertisements, and support for safer investment opportunities are crucial to mitigating the adverse effects.”
What surprised me most about talking to Pisciotta and Balthrop is that they are both active sports bettors.
Pisciotta said he bets “pretty regularly” but always keeps the stakes low and sometimes engages in emotional hedge betting. I had to look that one up — it means betting against the team you like so that if they lose, at least you’ll win some money and you’ll feel better.
“I’m somewhat proud to say I bet against the Chiefs in all three of the Super Bowls they’ve won since I’ve been at KU,” Pisciotta said. “Probably didn’t get my hedge ratio right because I was thrilled each time they won.”
Balthrop said he was an early player of fantasy sports for money and also of legalized sports betting.
“The tools and skills that I have from my quantitative studies and my first career in the world of hedge funds translate nicely to sports betting,” he said. “I have never wagered illegally but began betting across most major books the instant that I lived in a legal jurisdiction (Kansas).”
I’ve never placed a sports bet, although I have no moral objection to gambling. I have been known to play a few hands of blackjack at the $5 tables using basic and boring strategy, but I walk away when I start losing. I also buy the occasional lottery ticket at the grocery store, even though I know better because I understand the odds against winning.
But I worry about people who do gamble more than they can afford to lose, those who drive up their credit card balances or bet their house payments on the next game. I find the thought of being able to place sports bets on your phone with the ease of ordering an Uber to be oddly disturbing. And I worry about what sports betting is doing to us culturally, now that wagering has become as mainstream as the tailgate party before the game.
For a long time, the influence of gambling on sports was nearly universally perceived as negative. From the Black Sox Scandal of 1919 to Pete Rose being banned from baseball in 1989, betting was not just illegal but deemed a hazard to the integrity of the games. The National Football League also stood firmly against gambling for decades, as have college and amateur sports organizations. Then came the 2018 Supreme Court decision and, somehow, the leagues did a complete turn. Why was gambling a corrupting influence on sports one day and a proper part of the fan experience the next? Certainly it couldn’t have been the amount of money that sports betting suddenly put on the table?
My moral outrage is reserved here not for those who choose to gamble, or those who might find themselves in over their heads, but for the Kansas lawmakers who were so easily swayed by lobbyists that they gave us a rotten law. It’s not rotten because it allows sports betting — although I would have been fine if the state had never legalized it — but because legislators had a chance to make a law where the tax revenue would go to support something Kansans truly need.
Those relatively meager millions that Kansas has received from the sports betting won’t go largely to education, or the arts, expanding health care or revitalizing neighborhoods.
Instead, 80% of it is designated for a fund to attract a major league sports team to Kansas. It’s part of the bait lawmakers have been attempting to use, in part, to lure the Kansas City Chiefs here. That’s never going to happen. Better to use the incentives to build a stadium-sized venue for Taylor Swift and other artists.
But we can’t because the revenue is earmarked for major league sports.
This is like having a modest win at the slots and then churning it all back into the machines. It’s Kansas lawmakers who need an intervention. They are addicted to sports gambling — or at least the influence of the sports gambling lobby — and need some straight talk about helping ordinary Kansans, not adding to the burdens of households already financially at risk.
Max McCoy is an award-winning author and journalist. Through its opinion section, the Kansas Reflector works to amplify the voices of people who are affected by public policies or excluded from public debate. Find information, including how to submit your own commentary, here .
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