Commentary on Political Economy

Friday 26 November 2021


When life feels this precarious, it’s only natural to roll the dice on just about everything.

Artwork of a combination ATM-slot machine with small illustrations of a graduation cap, a house, and a suit and tie on the game screen.
Mark Pernice

About the author: Stephen Marche is a novelist and columnist. His new book, The Next Civil War, will be released in January.

Gambling has become one of the defining pleasures of our time, the perfect accompaniment to an era of high-risk, rigged economies and a looming sense of collapse. Once there was Las Vegas; now there’s a Las Vegas in every phone.

You can bet on almost anything today. Elections. Literary prizes. If you have a feeling that, say, Lapuan Virkiä is going to beat Porin Pesakarhut in the women’s Superpesis, the top professional pesäpallo league in Finland, you can put your money where your mouth is. During the pandemic, as casinos and racetracks closed, you could wager on the evening’s forecast in real time, or on the upcoming winter snowfall. There was serious action on the highest daily temperatures of major American cities. Then there are the ads. If you watch sports regularly, you probably feel, as I do, that the games have become interruptions in a more or less constant barrage of wagering promotion. Gambling is swallowing sports.

The most straightforward reason for the surge in gambling is a change to the law: In 2018, the Supreme Court struck down the Professional and Amateur Sports Protection Act, opening the door to online sports betting across 21 states. As a direct result, sports-betting revenues grew 69 percent from 2019 to 2020 and another 270 percent during the first quarter of 2021. Total gambling revenues in the U.S. are set to break the $44 billion mark this year, approaching the size of the market for movies, books, and music combined.  For a certain kind of American bettor, yesterday’s Thanksgiving celebration meant wagering on favorites as much as eating turkey or passing out in front of the game. (In the NFL, by the way, playing the favorites is usually a poor bet because they tend to be overvalued, but on Thanksgiving the opposite is true: Since 2003, favored teams have beaten the spread an absurd 73.2 percent of the time, not counting this year’s games. Please do not take this as betting advice. As they say, I’ve always been lucky with gambling: I’ve never won.)

For society as a whole, if such a thing exists anymore, there are benefits as well as costs to legal gambling. The chief benefit is that there’s a lot of money to be made, for governments and businesses both. The primary cost is that many unlucky and vulnerable people are destroyed. American society has accepted that trade-off—big money now for social crisis later—on any number of fronts: in its banking sector, in its housing markets, in its health-care industry. The rise of gambling is simply one example of our boundless desire for risk.

Once upon a time, there was the concept of “public morals.” In New York City, of all places, there were squads that enforced bans on pornography, sex work, alcohol, drugs, and gambling. Law enforcement had an explicit mandate to impose collective standards of behavior. This was, consciously, a repressive mechanism with religious roots. Then, slowly, that all went away. The repressive mechanisms rusted and crumbled. Now they’re collapsing.

The end of Prohibition in the 1930s and the liberation of the ’60s and subsequent decades amount to the abandonment of these various repressions; we are still in the middle of this trend. Permission to gamble has been more of a continuous process than a singular event, extending from 1961, when betting on horse racing was legalized, to the present. Prohibitions against alcohol, pornography, and marijuana have fallen. The legalization of sex work and the decriminalization of hard drugs are still to come. Liberalization has been slow but consistent because both sides of the political spectrum, even in this moment of extreme, violent hyperpartisanship, agree on the basic principle: Get government out. The left wants the government out of people’s private lives. The right wants the government out of their financial lives. There was, for a time, a kind of balance, weighing the public good against the desires of the market. Then the market won. For one thing, attempts at repression, like the war on alcohol or drugs, often did more harm than good, and regulated markets allowed those substances to be controlled in a much more sensible way than through law enforcement. For another, greed has a tendency to win against any other consideration. The end result is the same: You do you. If it kills you, that’s on you.

But the ban on gambling was more than a prohibition on a form of pleasure that has social costs; it was also a regulation of a predatory economic practice. The ban on sports gambling, in particular, was about retaining the purity of the game, which is just an idealistic way of describing market integrity. Ordinary people would not watch fixed games, just as ordinary people would not invest their money in fixed stock markets; in both cases, fairness is a prerequisite for future investment. The endemic corruption of boxing is one of the reasons its popularity has been in decline for 50 years. Baseball survived the Black Sox scandal of 1919 only by taking extreme measures, creating a commissioner role and making the faintest taint of gambling unacceptable. (Pity Pete Rose.)

An illustration of two die falling out of a medicine container.
Mark Pernice

Gambling produces corruption the way salt water produces rust. You can fight it for a while, but it wins in the end. Since the opening of Asian online gambling in the 2000s, soccer has been plagued by various scandals. Italian and South African soccer have been particularly corrupt, and they have paid the price. Another fixing scandal will rock American sports eventually; it’s only a matter of time.

What used to be a somewhat skeezy sideline to the entertainment dimension of sports is now front and center. Even a few years ago, for a commentator on a major sports network to mention gambling would have been unheard of. Now it’s commonplace for the announcers to discuss the odds. Charles Barkley, at TNT, has an endorsement deal with FanDuel. Jalen Rose, at ESPN, has one with BetMGM. Fox has its own betting platform, Fox Bet. Disney—yes, Disney—owns a small stake in DraftKings and is pursuing other options to increase its share of the market. Gambling is now firmly ensconced in the sports matrix. The same companies own the right to broadcast the games, the journalism about the games, and the betting markets for those games. What could go wrong?

Sports is just another economic activity now. And the righteousness or unrighteousness of any economic activity is no longer a question that anybody demands answers to, or even ponders much. Transactions once considered the purview of the Mafia have been mainstreamed—credit lines with 23 percent APR, extreme pornography, and legalized gambling all available from a device in your pocket. Remember that the greatest drug pusher of our era is not some Mexican cartel; it’s the family with their name on the wings of museums—the Sacklers. The medical community and government regulators went right along because there was money to be made. Gambling relies on addiction for its business model to function; everybody knows that. But addiction is also the business model for a huge chunk of Silicon Valley. Gambling ruins lives by way of soul-crushing debt; everybody knows that too. But so do the American educational system and the health-care and real-estate markets, which have been rigged by the people at the top to extract as much as possible from the suckers otherwise known as regular people. For most Americans, to participate in the economy in the most basic ways requires engaging in existential risk. In a world where Squid Game cryptocurrency managed to fleece investors of $3 million in an afternoon, gambling on a sporting event can seem comparatively harmless.

Gambling as a pastime is part of a dismal trend, the inevitable result of market fundamentalism, the belief in the power of capitalism above all, and the collapse of faith in institutions generally.

Betting tends to surge during periods of social breakdown. Russia saw a “gambling orgy” from 1905 until the outbreak of the Russian Revolution. The Communists believed it was a ploy by reactionaries, “associated with the revolutionary movement in the country and even referred to as government measures aimed at distracting the society from political rallies and meetings.” A similar wave of gambling roiled the French Revolution. “By the revolution of 1789, the four-story, quadrangular Palais Royal in Paris had become the most glittering tourist center of Europe, with 180 shops and cafes in its ground floor arcades,” according to a report in the Journal of Gambling Studies.

By 1791, its basement and secondary story contained over 100 separate, illicit gambling operations featuring the most popular dice and card games. The mania for gambling had been transferred from defunct, monarchical Versailles to the thriving, bourgeois Palais Royal, where the five main gaming clubs throbbed from noon till midnight. During the Revolution, Prince Talleyrand won 30,000 francs at one club, and after Waterloo in 1815, Marshal Blucher lost 1,500,000 francs in one night at another.

Gambling is an entertainment of uncertainty, a way of turning instability into play, of pretending that the structures of life don’t apply to you, that you are exempt from statistics. It’s also a way of avoiding reality, avoiding the future. When the wheel is still spinning, the fall hasn’t come.

Gambling is a symptom, almost an allegory, of American decay. What are we gambling with? What are the stakes? The man who invented poker was smart, the old expression has it, but the man who invented chips was a genius. Gambling is fun because it makes money seem like a game, a trifle. But fiscal silliness has been spreading more broadly recently. Crypto, with a market size that recently exceeded $2 trillion, has caused a widespread questioning of the very nature of money. Since 2008, the Fed has made quantitative easing—printing more cash—a part of its regularly scheduled programming. The U.S. money supply grew by $5.5 trillion, a 35.7 percent increase, from December 2019 to August 2021. Inflation is now rising faster than it has in 20 years. The number in your bank account does not mean today what it meant a month ago. Is currency itself now just the house money of the biggest house in the world? Who isn’t gambling now?

The consequences of the drastic increase in online betting are largely unknown. Gambling leads directly to increases in state revenues—that much is known, and is the primary reason for the ever-growing availability of legalized betting, from scratch-off lotto cards at the corner bodega to the apps on your phone. Gambling also leads, indirectly, to increases in violent crimesuicidedivorce, and bankruptcy. Problem gambling is a significant social cost; the pain of the lives that are ruined spreads to whole families. The rough social cost of a single problem gambler is about $10,000 a year. Gambling can also be, like many vices, quite a bit of fun for the people whose lives it doesn’t destroy, which includes myself. I once bet (and won) on a crab race. The bet seemed bizarre at the time, not to mention risky; estimating form in hermit crabs can be difficult. Now I think I was only slightly ahead of the curve.

The marketplace will only expand from here, and grow more byzantine. One of my teenage son’s friends recently described a scene at his high school to me: boys, in class, on their phones, parlaying German football, Ping-Pong, and F4, making 27-way bets with enormous potential payoffs. Once gambling was limited to a series of games of chance, with players taking risks against set odds. Now any event, any contest with a measurable outcome, is an opportunity to gamble. And we’re only at the beginning of online sports betting. The law changed in 2018. No one can say what the fallout will be, but life will be riskier.

The citizens of the United States have accepted their radical precariousness as a way of life. The rise of the gambling industry is just a symptom of our acceptance. Gambling expresses, through entertainment, the basic truth of the moment: Everything—every little thing—can be converted into a marketplace with winners and losers, and the house always wins. The only vice left is being broke.

Stephen Marche is a novelist and columnist. His new book, The Next Civil War, will be released in January. 

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