The case for a 1% problem gambling tax

The National Council on Problem Gambling (NCPG) believes the expansion of legalized sports gambling in the US will likely increase gambling participation and problems unless serious steps are taken to minimize harm. While some of the states that recently passed sports betting bills included protections, several others did not.

Responsible gambling measures in sports betting legislation are even more important because almost 20% of US states do not provide any public funds to prevent or treat gambling addiction, and most of the others provide less than $1 per capita. Many private health insurance companies will not routinely reimburse for a diagnosis of gambling addiction. As a result, many individuals with gambling problems do not have access to public or private help, even as state governments and gambling operators report record profits and rush to expand sports betting.

The only ethical and economical way to maximize benefits from sports betting is to minimize costs related to problem gambling. The NCPG suggests the equivalent of 1% of net revenue from legalized gambling – including any new sports betting – should be dedicated to problem gambling services. The source of funds may include state tax revenue and license fees, as well as voluntary contributions by gaming operators.

Plan of action

Responsible gambling requirements for sports betting operators should include a written plan with measurable objectives in areas like employee training, self-exclusion, advertising guidelines and the ability for customers to set limits on time and money spent betting. It should be noted that even these minimal suggestions go beyond what many states require, so international gambling companies are encouraged to voluntarily set and maintain high standards rather than ‘dumbing down’ their responsible gambling policies to meet but not exceed the generally lower US regulations. A company with a good responsible gambling policy should aspire to do more than just comply.

Operators have an affirmative obligation to put in place technical and operational measures to prevent access by those who are underage. Internet and mobile gambling options may further increase risk factors for gambling addiction, but this technology also allows additional opportunities to enhance the responsible gaming features described above.

Gaming vendors and operators are encouraged to build platforms and operations to meet the NCPG’s best practice Internet Responsible Gambling Standards (IRGS) and to pursue NCPG’s Internet Compliance Assessment Program (iCAP) to receive an independent audit confirming they meet the IRG standards. Not only will this make it easier for all stakeholders to have a consistent responsible gambling program across various jurisdictions but, most importantly, it will provide gamblers with continuity of protection.

The NCPG is working with enlightened operators on a number of projects, such as measuring gambling participation in every state to create a baseline and then monitor changes. Such partnerships are essential since the Federal government provides no funding for problem gambling programs. The NCPG provides the sole national safety net, which is more important than ever as legalized sports betting expands across the country. Our programs help government, gaming companies, regulators and, most importantly, the public to minimize the harm from gambling addiction.

Specific guidelines for sports betting responsible gambling and internet gaming are available on the NCPG website (www.ncpgambling.org)

Keith Whyte