Since the federal ban on sports betting was overturned seven years ago, the industry has exploded. Across the 38 states where betting is now legal, more than $145 billion was wagered in 2024 and $1.8 billion in tax revenue was gained in 2023, with numbers rising every year.
Conversations around sports betting in the US tend to fall into a deadlocked debate. One side celebrates the growth in choice and entertainment that this change has brought – and defends a laissez-faire approach to regulation.
The other side argues that people betting on sports are in danger of serious harm and that legalisation was a mistake. They point to research that indicates sports betting can impact financial well-being and mental health, and can even contribute to issues like domestic violence.
As with many issues, there seem to be few ways to build a shared understanding between the two camps.
How behavioral science can help
We can foster a more productive dialogue by viewing sports betting not as a special case, but as a general consumer issue. There is a wealth of evidence from behavioral science that shows deceptive online practices influence consumer decisions, even though people don’t like them. Those insights can shape smart regulation for sports betting – here’s how.
Choice architecture and gaming
Online retailers often put “recommended items” at the top of search results to guide what shoppers buy. These aspects of choice architecture – what information is made prominent and how it is presented – deeply affect consumer behavior.
Gambling regulators should take a closer look at the types of information consumers use to decide what and how much to bet on – and how operators display it. A very simple example: a betting app might highlight a user’s recent wins ($500 on the Chiefs last month) while burying their overall losses ($3,200 year-to-date) behind several menu clicks.
We think that considering choice architecture raises three main questions about whether consumers are being equipped to make informed choices:
1. Do consumers know what they are buying?
Odds are a crucial piece of information for sports betting and, in theory, should help people choose the level of risk they’re willing to take. But do people know what these odds mean?
Less than half of people understand gambling odds and their chances of winning a bet. For example, when we measured how well people understood different gambling odds formats in the UK, we found that the industry standard was most confusing, while a simplified version boosted comprehension and led to fewer bets. We are now testing if similar trends bear out in the US, where the default is American odds.
2. Are consumers given good options for making budgets?
Many operators offer deposit limits, which can help people limit their play if they want to. But our research found that the effectiveness of deposit limits depends a lot on their design. When deciding how to use deposit limits, people can be influenced by cognitive biases: the tendency to stick with the default or pre-selected option, and basing actions on the first piece of information seen – the anchor.
These biases came to life in our work with bet365, a British online gaming operator. We explored how players interacted with limit-setting tools in the real world. Users who weren’t shown sky-high deposit limit options (some as high as £100,000) chose limits nearly 50% lower than those who were shown them.
Taking this insight further, we found that when the operator made deposit limits a required step and suggested a modest starting amount – which players could freely adjust – people consistently set more conservative spending boundaries for themselves.
3. Do consumers have the time to make a considered choice?
Operators can make players feel like time is scarce, or encourage them to lose track of time altogether. Both of these feelings can influence betting decisions. When we explored UK gambling platforms as users would experience them, we observed that push notifications communicated time-limited promotions, creating a sense of urgency for users to take advantage of a deal before losing it.
On the flip side, we didn’t receive any notifications about the total time or money spent on platforms. This information was tough to find, even though growing evidence suggests that activity statements have helped consumers raise awareness of and take control of their spending.
Let’s shape a fairer future for sports betting
Thirty-eight states and counting have legalized sports betting. While legislators are proposing more federal controls, regulation is likely to remain in the hands of states.
Regulators have the power to shape a safe and sustainable industry with evidence-based policy. We should be empowering consumers to understand operator practices like the above. With this knowledge, they can make informed choices about which platforms they want to use, how much and how often they bet and which tools they use to make sticking to these preferences easier.
If this happens, we may see a race to the top. Operators could work to improve their platform designs and stay ahead of regulation so that consumers remain loyal over time.
Contact us if you’d like to explore advancing this future with applied behavioral science. Together, we can help create a market that works for everyone.
