CBS News’ recent deep dive into the legal sports betting industry was an informative look at some unsavory aspects of the business. However, it missed the mark in a couple of ways, most tellingly when failing to contextualize what betting a certain amount of money actually means.
The eight-minute segment is available for viewing here. CBS interviewed a pair of recreational sports bettors, one of whom had lost millions of dollars across an eight-year period. CBS spoke with Sports Betting Alliance President Joe Maloney to present a short industry viewpoint, as well as a former FanDuel employee who trashed the company’s responsible gambling practices.
The opening segment, featuring recreational bettor Esteban Ruiz-Haynes, contained the most misleading part of the piece.
Betting Volume Doesn’t Equate to Betting Losses
CBS opened by showing Ruiz-Haynes on a typical day of betting. He wagered $250 apiece on a couple of college football parlays. He told the interviewer that he bets about $80,000 to $100,000 per year, while he makes about $97,000 per year through his job.
“That’s right,” the narrator said. “This single, 29-year-old, pest control salesman bets as much as he makes, if not more.”
And if his bets that week lose?
“I’m eating ramen noodles for the rest of the week,” Ruiz-Haynes said with a smile.
An individual “betting as much as he makes in a year” is an easy way to generate a viral headline and prompt some pearl-clutching, but it’s important to put betting $100,000 in a year into actual context. If someone is betting $80,000 to $100,000 in a year, they rate to lose some small fraction of that. CBS‘ framing makes it sound like Ruiz-Haynes bets his entire year’s salary, but that’s very likely not what’s happening.
If Ruiz-Haynes is a very, very poor bettor, he might have a -20% return on investment (ROI). That means he’d be losing about $16,000 to $20,000 per year. That’s a lot of money for someone on a $97,000 salary, but it probably doesn’t mean they’re starving and can’t pay rent. It’s much more likely that Ruiz-Haynes is cycling through much of the same money that he’s betting through the year, winning some and then losing a bit more of it back in a continual slow drain.
Thinking of Betting Dollars as Part of an Entertainment Budget
Instead of imagining a pest-control salesman blasting off his entire year’s salary on a few bets, it’s more accurate to think of the $16,000 to $20,000 he’s losing as part of his entertainment budget. In that context, these numbers shouldn’t really raise any crazy alarm bells.
If someone I knew was spending in the low five figures per year on concert tickets, sports cards, international travel, or video games, I’d be a little bit taken aback and concerned. But I wouldn’t be wondering whether they can afford to eat this month.
Maloney touched on this idea in his own response when asked about whether sportsbooks draw a massive share of their revenues from a comparatively small number of potentially problem gamblers.
“The vast majority of users participate in this activity, use these products for entertainment, and do so responsibly,” he said. “It is for entertainment. It is not for wealth creation.”
Maloney is obviously correct that most bettors are not torching off their rent money, or government attitudes toward the industry would be considerably less friendly than they are right now. As for the second part of his quote, we could have a whole different discussion about industry marketing practices.
I’m certainly not here to defend the sportsbooks on those, and it would have been nice to see whether they pressed Maloney on that idea and what he said if so. I’m just here to point out that a guy with a nearly six-figure income making a few $250 parlays a week is hardly a five-alarm fire.
