Problem gambling funding can take many forms and helps to identify how ready a state is for legal gaming. It offers a useful gauge of preparedness that a state displays prior to the expansion of gambling laws – especially for online sports betting.
This is not always the case, though.
Some states spend large sums of money on responsible gambling programs, but fail to spend it intelligently.
Fighting Problem Gambling: A Case Study
Louisiana and Oklahoma are two states trending in opposite directions in the fight against problem gambling.
Louisiana has allocated just under $2.6 million to its Compulsive and Problem Gambling Fund. The state serves its estimated 191,220 problem gamblers while also taking problem gambling helpline calls from other states like Arkansas and Colorado. It’s far from the largest problem gambling spender, but it uses its resources well. It could reasonably allow online sports betting without abandoning its responsibility to problem gamblers.
In contrast, some states have allocated large amounts of money for problem gambling programs but haven’t spent it wisely. In 2017, Oklahoma appropriated $1 million for problem gambling and left $245,000 unspent. Oklahoma probably wouldn’t handle the aftermath of gambling expansion as well as a state like Louisiana.
Problem Gambling Funding: Best and Worst Spenders
The states below are among the best and worst problem gambling spenders.
Each of the best spenders has something in common with its counterparts while trends are identifiable among the worst spenders, too:
The best spenders fund a helpline, public awareness, prevention, treatment, program evaluation, and most importantly, research. They also have above-average per capita problem gambling spending.
The worst spenders either fail to fund problem gambling services altogether or have put a funding scheme in place that discourages long-term investment in problem gambling. Understanding previous pitfalls can prevent states from making the same mistakes when they expand or revisit their gambling laws.
State data is drawn from the most recent National Association of Administrators for Disordered Gambling Services (NAADGS) survey. In July 2022, the NAADGS released survey data from 2021 analyzing each state’s investment in problem gambling and how effective each state was. The NAADGS used budget data and surveys from state and agency employees to see whether general funds are really benefiting problem gamblers or whether money set aside for problem gambling was being used at all.
This 2021 report is the foundation of the featured states’ analyses below.
There is much nuance in determining how effective a state’s approach to problem gambling is though. Problem gambling metrics – like hotline calls and patients in treatment – rise when new online gambling markets go live. Some states invest millions of dollars in problem gambling programs but don’t make services available in rural areas.
Even treatment statistics are imperfect. People seeking help that are only on the verge of being considered problem gamblers are also lumped in with those who require immediate treatment. Concerned friends, family members, and loved ones can call on behalf of a potential problem gambler, too. That’s to say nothing of patients who may be readmitted to treatment.
Here’s what the best and worst problem gambling funding schemes can teach about problem gambling investment – and about whether each state is equally wise in expanding its gambling laws.
Which States Stand Stand Out Above the Rest for Problem Gambling Funding?
While most gamblers can participate in sports betting without showing problem gambling symptoms, a few cross the line from problem gambler to gambling addict. This silent addiction can lead addicts to gamble all of their money and life savings away without friends, family, or loved ones knowing until the money is gone.
Iowa combines spending on gambling and substance addiction, which illustrates the tightrope policymakers have to walk when making problem gambling part of a state’s behavioral health system. Delaware has a history of not only supporting its own state but also others. It’s one of several states that receive problem gambling helpline calls from other states. Finally, Massachusetts’ Gambling Commission is one of the most innovative in the United States, practicing simple but powerful prevention strategies in the state’s casinos.
Iowa appears to be a problem gambling spender behemoth. In the 2022 fiscal year, Iowa spent $15.6 million on “outside vendors” (clinics) that treat substance abuse and problem gambling.
However, Iowa combines spending on substance abuse and problem gambling in its budget. The NAADGS found that Iowa directed just under $3 million to address problem gambling. That’s still a substantial amount of money for a state of Iowa’s size. Its problem gambling spend per capita is $0.94, compared to a larger market like Pennsylvania, whose problem gambling per capita spend is $0.49.
Iowa’s integration of problem gambling into its substance abuse system is not deception.
“Integrating gambling addiction in with substance abuse and looking at it as a behavioral health issue, in general, has a lot of theoretical appeal,” Executive Director of the National Council on Problem Gambling, Keith Whyte, said. “Because we know that people with gambling problems also tend to have substance abuse and depression. So there’s a lot of good theory behind that.”
Whyte went on to describe the balancing act that’s necessary to make that integration work.
“While no one would deny the Iowa Department of Public Health does a good job and tries to do a good job, it’s my understanding that the only way that you can get problem gambling treatment is by going to a substance abuse provider,” Whyte said. “And quite frankly, I think there’s a lot of people with gambling problems that don’t feel similar to a meth addict.”
Iowa’s investments in public awareness can counteract the misconceptions surrounding treatment. The investments that have gone to problem gambling specifically can ensure that the specialty services demanded from problem gambling patients are met, too. For states looking to add problem gambling to a state’s existing mental health infrastructure, Iowa is an instructive model.
In 2016, the NCPG found that Delaware was the top spender per capita on problem gambling. (Today, it’s third behind Massachusetts and Oregon.) In 2022, the Delaware Council on Problem Gambling won an award for its gambling addiction ad campaign.
Since it legalized online gambling in 2012, it’s appropriate that Delaware has invested in responsible gambling resources for so long. (Although in 2018, Delaware was criticized for not putting more money toward problem gambling treatment in the wake of sports betting legalization.)
One of its most notable features is its helpline. Almost every state funds one, and it’s considered one of the lowest bars to reach in terms of problem gambling investment. But Delaware accepts calls from states like Montana, too. Delaware is part of a surprising consolidation in the problem gambling field.
“As technology improves and evolves, there should be more consolidation of helplines because there’s economy of scale,” Whyte said. “To run a helpline right, you’ve got to have 24/7 staffing, you’ve got to have language translation services, you need to have a good tech stack to handle call, texts, and chat. You need well-trained people, a really good database of resources.”
“So why should you have 50 different call centers? … Modern communication technology makes it easier than ever to send calls to a center that is really dedicated to doing this stuff and dedicated to doing it well.”
Having too many different numbers can be harmful to bettors, too.
“You’ve seen ads that have a dozen different numbers on it,” Whyte said. “Some of these numbers don’t work outside the states. If they do, you’re accessing the wrong state.”
A state’s helpline number should go to a call center that can direct problem gamblers to local treatment options. Delaware’s capacity to handle multiple states at once is a testament to the resources available to leverage not only in-state but out-of-state as well.
Massachusetts is not only a top problem gambling spender, but it’s also an innovative state. Some of the programs it has devised are among the first in the United States.
The Gaming Commission’s PlayMyWay program is a great example. PlayMyWay is a program that sends bettors notifications when they’ve gambled certain amounts of money at different thresholds. For example, a bettor who bets $125 of a $500 budget would get a push notification telling them they’ve gambled 25% of their budget.
PlayMyWay has produced results, too. One study found that PlayMyWay users gambled less money, lost less money, and gambled less often than non-users. It shows how something as simple as a budgeting tool can head off some problem gambling behaviors before they begin.
Even the simplest innovations like PlayMyWay require a willingness to risk wasting money. (It also requires a steady supply of money to risk.) However, the payoffs can result in first-of-their-kind programs that other gambling markets can emulate. It’s for good reason that the NAADGS 2021 report identifies the Massachusetts Gaming Commission as “an innovator in this area.”
Problem Gambling Spending: The Worst States
There are unique and creative ways to underfund problem gambling. It’s not just about committing zero public funds to problem gambling. (Although, three states spend nothing.)
Washington, D.C. invests no public money in problem gambling. Wyoming did something similar but on a larger scale. But Colorado is the most unique worst spender. Colorado allocated too little to problem gambling, but when it increased funding, it did so in a way that discouraged long-term investment in addressing problem gambling.
Wyoming has signed two bills allocating gambling funds to problem gambling. The bill creating the state lottery designated $200,000 in unclaimed prize money for problem gambling. Wyoming’s sports betting bill called for $300,000 to go toward problem gambling funding.
In the fiscal year 2021, Wyoming spent $7,188 on problem gambling. That was $5,000 more than what it spent on problem gambling programs in the fiscal year 2020. Its problem gambling spending per capita is less than one cent.
Wyoming is an extreme example of a state that plans to allocate problem gambling funds but spends them on other budget items instead.
“There’s a lot of money that’s allocated to problem gambling that never gets to problem gamblers,” Whyte said. “It’s siphoned off into substance abuse. It’s siphoned off to deal with opioids, or in Kansas, to plug up holes in the budget.”
Whyte doesn’t just lay the blame on government officials, though. While he takes Kansas’ budgetary failures personally, his concerns about Kansas seem equally applicable to Wyoming:
“We should be in states like Kansas that were diverting 90% of the problem gambling funds to other things. Our advocates needed to step up. We needed to be there at the capital year after year, session after session, saying this is both economically foolish and ethically a travesty. And we weren’t.”
Inefficient spending isn’t just about overpaying extra contractors and grifters. It’s also about the programs that don’t get funded, like the underfunded gambling helpline or Wyoming’s single licensed problem gambling counselor.
Wyoming Lottery Corporation Response
On November 14, the Wyoming Lottery Corporation (WLC) reached out to discuss the NAADGS survey’s findings. The WLC didn’t dispute the quoted figures. They pointed out statutory issues and current initiatives. The statute governing the WLC’s responsible gambling distribution states:
“Unclaimed prize money shall not constitute net lottery proceeds. A portion of unclaimed prize money, not to exceed $200,000 annually, shall be used by the corporation to develop, in consultation with the department of health programs for the treatment of compulsive gambling disorder and educational programs related to the disorder.”
This contributes to funding issues in two ways. While the unclaimed prizes pool is large, that pool also funds future lottery winnings. So, it’s expected that much of it would remain dedicated to potentially large future payouts.
Making responsible gambling an optional line item also allows business motives to overrule responsible gaming donations. If the WLC wants or needs a set amount of reserves, it’s no surprise that responsible gambling funds don’t get pulled out in large quantities every year.
These issues require a legislative solution that offers permanent and consistent funding. The Wyoming legislature partially addressed this issue with its sports betting bill, which allocates the first $300,000 in online sports betting tax revenue toward responsible gambling programs. This will go into effect beginning in FY 2022 but doesn’t specify programs to receive sustained funding. Wyoming shares this funding flaw with Colorado.
WLC Survey Results
On November 14, the WLC sent Gaming Today data from a study completed internally in early 2022. 5.3% of respondents indicated they may have had a gambling problem. They believed online gambling and slots were the biggest contributors to their gambling problems. 6.2% believed they knew someone with a gambling problem. They believed sports betting and table games were the largest contributors to those problems.
With online gambling in Wyoming, consistent responsible gambling funding must come from the state legislature’s direction.
In 2018, Washington, D.C. passed a bill that called for the first $200,000 in sports betting tax revenue to be spent on problem gambling. As of the fiscal year 2022, that money has never been spent.
That’s not solely because of ineptitude on the part of Washington, D.C. Sports betting wasn’t meant to go live until 2020. The pandemic further delayed D.C.’s sports betting launch until 2021. During both years, none of the $200,000 supposedly set aside from problem gambling funds was spent.
“The National Council paid helpline costs of a half dozen states, including big places like Texas and smaller places like D.C.,” Whyte said.
As Delaware’s spending shows, Washington D.C. doesn’t necessarily need to create its own helpline from scratch. It could contract its helpline to Delaware or Louisiana that has the capacity for out-of-state calls. D.C. would only have to provide the local resources that out-of-state helpline workers would direct callers to.
Washington, D.C. shows where planning can become over-planning. It’s good to have a strategy to use limited public funds efficiently. But it shouldn’t prevent the implementation of problem gambling services altogether. Unreliable private donations to a non-profit are no substitute for consistent public funding that can keep key services intact during the ebbs and flows of private donations. It can keep a helpline functional and maintain public awareness of problem gambling interventions.
Planning alone cannot do those things, especially in a district surrounded by states that have successfully invested in robust problem gambling services.
Colorado previously allocated $130,000 toward problem gambling, which largely funded the state helpline. (Today, Colorado’s problem gambling helpline calls are routed to a call center in Louisiana.) After two years of online sports betting, Colorado’s governor signed a bill that would commit a total of $3 million to address problem gambling each year.
However, this $3 million has a catch. That amount must be appropriated and approved each year. So, the money could go to prevention organizations one year and treatment centers the next. Colorado could leave important programs underfunded while trumpeting all the money it now spends on problem gambling programs.
“From a workforce side, that uncertain short-term funding will result in little long-term investment or impact,” Whyte said. “Even if you get people who are interested in doing some of these programs, by definition you’re only funding things for the short term. And we know the behavior change takes sustained programming.”
Colorado’s uncertain funding from year to year eliminates the possibility of non-profits spending scarce funds building programs in Colorado. Those nonprofits don’t know whether their prevention programs will be funded the next year or whether the state will target treatment or research next.
Problem gamblers have to go through extensive therapy to identify gambling triggers, resist the urge to gamble and build a life around sustainable behaviors. Those difficult habits cannot be built without long-term intervention from different supporters.
“It’d be like saying in one year we’re going to solve all the problems with alcohol,” Whyte said. “We’re just going to put a bunch of money into it for a year and the next year we’re going to do something else because we’ve solved our problem…So I think the funding is not going to have the impact it could because it’s quite flawed.”
Spending lots of money doesn’t create strong problem gambling programs. The sustained effort, long-term planning, and strategic use of scarce funds create the safety net necessary for the modern, responsible gambling industry.
Many Paths to Success and Failure
There are many ways to create a responsible safety net for problem gamblers, and there are many ways to fail problem gamblers.
The best problem gambling spenders take the lead in creating proactive problem gambling programs. They invest in research to discover new treatment and prevention strategies. They cross-train counselors so states have more than half-a-dozen problem gambling counselors. The very best states ensure problem gambling resources are available state-wide, not only in the state capital or big cities. The best spenders are also the states best able to mitigate the consequences of expanding gambling.
The worst problem gambling spenders have no consistent public problem gambling funding. In these states, nonprofits carry the burden, often able to operate a helpline and offer little else. Without consistent funding, problem gamblers are at the mercy of their zip codes, left adrift with no problem gambling counselors who can see them and sometimes, no Gamblers Anonymous groups to provide sponsors.
The six states featured here demonstrate a larger pattern: public investment in problem gambling services pays off. While the NCPG continues fighting for greater care for problem gamblers, Whyte has one more stakeholder group he’s determined to hold accountable:
“They [sports betting operators] are fighting aggressively on tax rates and bonuses…[but] I have never seen an operator use its full lobbying weight, muscle, and clout to try and fight for betting problem gambling funding – even though it’s not costing them a dime because this comes out of the state’s share, and even though they say they support responsible gambling.”
In states that waste taxpayer dollars, which include taxes that sportsbooks pay, the gambling industry should lean on statehouses to put a safety net in place for problem gamblers. States can profit from new forms of gambling, like online sports betting, while mitigating the harms that come from easy access to that same type of gambling. The states that chose not to may not have been wise in pushing for legalized sports betting. But the ones that innovate in the field of problem gambling offer a roadmap to a safe, modern, and responsible gambling industry.