When Gov. Andy Beshear signed sports betting into law on March 31, he made Kentucky the biggest U.S. jurisdiction by population to adopt a legal wagering age of 18. Of the 26 legal digital states plus Washington, D.C., and Puerto Rico, only six currently allow betting at 18, and four of those — Montana, New Hampshire, Rhode Island, and Washington, D.C. — are regulated by state lotteries.
Brianne Doura-Schawohl, a responsible gambling consultant representing the National Council for Problem Gambling, told Sports Handle that research has shown there are an estimated 4 to 8% of adolescents presently exhibiting a serious gambling problem, with another 10 to 14% of adolescents at risk for developing or returning to a serious gambling problem. Compound that with the fact that the NCPG’s NGAGE survey found rates of problematic gambling for sports betting to be two to three times worse in comparison to other forms of gambling, and it would stand to reason that the NCPG would advocate for at least 21 as the legal age.
“The brain does not fully form until 25, so if you were to ask me 18 or 21, I’d take 25,” Doura-Schawohl said.
In recent months, responsible gambling has become a top concern among gambling stakeholders. Newly legal states like Maine, Massachusetts, and Ohio have set down some of the most stringent advertising and marketing standards in the country, all in an effort to protect those under the age of 21 from even being exposed to the idea of legal wagering. Just last month, the American Gaming Association updated its responsible gambling guidelines, including changing all references to “legal age of wagering” to 21.
But there’s no consensus — and no real research related directly to sports betting — on how or how important it is to protect those in the 18-21 age group from exposure or access to wagering.
Ontario a good comparison?
Some say that if responsible gambling messaging is on point and problem gambling helplines are easily accessible, then offering betting to teenagers can be managed.
In North America, Ontario is the largest jurisdiction with legal sports betting. The population of the province is 14.6 million, compared to 4.5 million in Kentucky, and the legal gambling age has been set at 19. Every U.S. jurisdiction that has set the age at 18 has a population hovering at or below 3.2 million (Puerto Rico), and most have populations of 1.4 million or less.
“If we were to look at Ontario, the age of gaming consent is 19 and they have rolled out a very robust responsible gaming program, and so far, it has not raised any issues,” Martin Lycka, Entain’s senior vice president for American regulatory affairs and responsible gaming, told Sports Handle.
Ontario regulators have set strict advertising guidelines and are currently considering banning any celebrities from shilling for legal sportsbooks. But before wagering went live in Ontario last year, its government cut funding to the agency that researches problem gambling.
Ontario stops funding problem gambling research agency, orders closure | CBC News https://t.co/DzzKEspEsp
— Jani Selin (@jani_selin) December 13, 2021
Bourbon and betting ingrained
Kentucky, where parimutuel and historic horse racing and the state lottery are legal for 18-year-olds, presents a unique situation. The state’s sports betting regulator will be the Kentucky Horse Racing Commission, which already oversees all wagering in a state where betting on horse racing — just like bourbon — is ubiquitous.
“From a public health perspective, it’s not like I would advocate that because Kentucky has bourbon, and 18-year-olds have easier access to bourbon, that we should now make the drinking age 18,” Doura-Schawohl said. She added that while racing and parimutuel wagering are “ingrained in the culture, Kentucky is also one of nine jurisdictions that did not fund responsible and problem gambling initiatives, so they did something right when they legalized sports betting, because they’ll have funding for that now.”
Responsible gambling advocates were able to convince lawmakers to commit 2.5% of tax revenue annually to a problem gambling fund, which could translate into $575,000 per year if tax-revenue projections are accurate. When discussing the new law during the legislative session, bill sponsor Rep. Michael Meredith projected that the state would take in $23 million in tax revenue per year from legal wagering, and after expenses and an earmark for responsible gambling programs, the balance would be directed to the state’s pension fund.
For comparison, the state in 2022 took in $112.16 million in taxes from historical horse racing on $6.8 billion in handle. Wagering and HHR are taxed differently — the new law sets a 14.25% tax rate on digital wagering, while the effective tax rate on HHR is about 20.4% — but it’s clear the expectation is that handle and net revenue on wagering will be lower than HHR, which was legalized in 2021.
Of the $112.16 million that the Bluegrass State took in last year, it committed no funds to problem gambling initiatives or responsible gaming education.
‘Silly’ to be able to bet horses, not sports
The legal age for parimutuel wagering across the country is 18, and in a state where horse racing dates to the 1700s, that hosts the first leg of racing’s Triple Crown in addition to myriad marquee racing events, and is an international destination for breeding, it seems almost bizarre to suggest that lawmakers would have considered an age other than 18 for legal sports betting.
Did you know that the Kentucky Derby is the longest running sporting event in the history of the US?
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“I think it’s silly that we’ve had a history in the United States for decades that we can bet on horses, those young folks are in that world already, and all they are doing [in order to bet on sports] is going to black-market sites or the illegal bookie on the corner,” Bill Pascrell III, a gaming lobbyist with the Princeton Public Affairs Group, told Sports Handle. “When we try to raise the age for these things, we make it more mysterious and we push people into the black market. Black-market operators are never going to try to get licensed, but why are we handicapping the legalized, regulated operators? It’s easier to track problem gambling and responsible gaming online than at a casino.”
Pascrell suggested there is little difference between betting on a horse or a team, and compared delaying the legal age for betting to 21 to the legal drinking age of 21 — which is higher than in many other countries in the world.
“We have to take the government out of parenting,” he said.
KY could attract teens from border states
Six Kentucky border states — Illinois, Indiana, Ohio, Tennessee, Virginia, and West Virginia — offer legal betting, and the age in all of those states is 21. All six legalized digital wagering, and there’s no question that Kentuckians have been crossing the border to bet on sports. Last month, the geolocation service GeoComply said it tracked 300,000 geolocation checks from 23,000 unique accounts in Kentucky during the opening four days of March Madness.
Now that wagering is legal in Kentucky — though it likely won’t be live until late 2023 or early 2024 — Lycka says the state is at risk “of certain people crossing the border to open accounts there” rather than in their home states. And while those young consumers would be betting in a regulated market with consumer protections in place in Kentucky, Lycka said, “The onus is on the industry to take care of those people.”
Doura-Schawohl said the NCPG and other RG stakeholders take a more narrow, hard-line view.
“Sports betting is a Class III game, and we care about age gates in all the other casino games, so why wouldn’t we care here?” she said. “Twenty-one is a far more appropriate age for gambling. Lottery and horses are sometimes offered at 18, or even 16. And all of that can lead to gambling issues down the road, so when we are talking about something that is far more risky and accessible, then 21 is more appropriate.”
