As Young Adults Lag, Officials Seek Michigan Gambling Literacy Strategies

Throughout Problem Gambling Awareness Month, an added emphasis has been placed on educating younger demographics on the dangers associated with gambling.

Among the biggest concerns associated with the issue is gambling literacy, a topic discussed at length this month at an industry seminar in Novi.

Young adult males have shown the worst gambling literacy in recent studies, especially about sports betting, which is accessible 24/7 online in Michigan.

A Monroe legislator is spearheading efforts to educate young Michigan people about gambling. But what is gambling literacy, and why is it a bigger issue for younger gamblers?

What is gambling literacy?

Gambling literacy is a term that is used in responsible gaming studies.

What gambling literacy looks at is the understanding a player has about the nature of the bets they are making. Do they understand the odds and the likelihood of them succeeding?

In 2017, the Positive Play Scale was created to help index “the extent to which a consumer base has positive beliefs about gambling and gambles in a positive manner.”

As part of that scale, a Gambling Literacy Subscale was created. The subscale includes three statements where surveyed gamblers determined how strongly they agree/disagree with them. The three statements are:

• Gambling is not a good way to make money
• My chances of winning get better after I have lost
• If I gamble more often, it will help me to win more than I lost

A player’s gambling literacy is then determined by their response to these statements.

Sports bettors score lowest with gambling literacy

In 2021, the National Council on Problem Gambling released the National Survey on Gambling Attitudes and Gambling Experiences 1.0.

It was the first in-depth national study on gambling issues and public attitudes about gambling since the US Supreme Court made its ruling to lift a ban on sports gambling in May 2018. More than 28,000 US consumers were surveyed for the study.

One of the prevailing points of the study was sports bettors were much greater in lacking gambling literacy than non-sports bettors.

Nearly half of the sports bettors surveyed believed they had better chances of winning after a loss. Nearly half also believed that gambling more often would help them win more than they lose.

Over 40% of the sports bettors believed gambling is a good way to make money, compared to just 20% of non-sports bettors.

Young adults show lowest rates of gambling literacy

The 2021 NGAGE report also highlights that young adults 18-44 show the lowest rates of gambling literacy.

Starting with the baseline question of: Is gambling not a good way to make money?” just 27% of 18-24 year olds strongly agreed.

That only increased to 36% for the 25-34 age group and to 48% of the 35-44 age bracket.

By comparison, 80% of adults at least 75 years old strongly disagreed with the statement.

When factoring in all three gambling literacy assessment statements, nearly 27% of 18-24 year olds showed poor literacy.

Only 36.4% displayed high levels of gambling literacy.

Once past age 44, gambling literacy reaches 73% of an acceptable level. Both 25-34 (49.6%) and 35-44 (59.8%) were still well below their elders.

Why young adults struggle with gambling literacy

Sports betting has grown around college campuses as legalized online betting has expanded recently. In some case, like Michigan State University with Caesars Sportsbook, colleges even have partnerships with online sportsbooks.

Researches estimate that 75% of college students gambled during the past year, legally or illegally.

Social media presence

With online sportsbooks having a heavy presence on social media platforms, it’s become increasingly more difficult for college students to avoid them daily.

Mike Ruffing, Founder of Maverick LLC – a firm that helps prevent problems from sports betting through strategic consultation and proactive education – addressed these issues during a presentation at Michigan’s 15th Annual Problem Gambling Symposium in Novi earlier this month.

“Many college campuses have created an atmosphere of social acceptance of sports betting, and it shows in the 75% stat,” Ruffing said. “Why are college students at risk? Well, we’ve talked a little bit about social media, but it’s no secret that many of the operators and other entities within the industry show up on social media for a reason. They’re producing daily, sometimes hourly content. That’s glorifying sports betting, or at least normalizing it.”

Celebrity promotion of risky betting

Multiple online sportsbooks have secured celebrity partnerships for their products.

Barstool Sportsbook has been no stranger to pushing game-day parlays with long odds through its founder Dave Portnoy. FanDuel has promoted preset parlays with Pat McAfee, while DraftKings has done the same with sports media pundits Dan Le Batard and Mike Golic Jr.

All of these influential media members have a strong connection with the college crowd.

“College students might be influenced by these personalities, and some of them are going as far as promoting risky sport betting strategies or embracing this idea of degenerate gambling,” Ruffing said.

Parlay betting

The parlay bet has been very popular in online sports betting.

Stacking bets on top of bets leads to larger odds that can lead a bettor to a sizable payday.

FanDuel Sportsbook has been especially successful in benefitting from parlay wagers from its customers.

In Illinois, FanDuel reported that 70% of its April 2022 revenue of $34.2 million came from parlay betting ($23.3 million). In January of 2023, it recorded 62% of its revenue from parlay wagering ($28.9 million).

For January, FanDuel had a hold of 21.5% from its parlay betting in Illinois, much higher than straight bets.

“We see this aggressive push towards pushing something many see as the lottery ticket of sports betting,” Ruffing said of the parlay bet. “You’re starting to get into these high odds scenarios where multiple things have to happen. So you see this wave of aggressive marketing, and it’s supported by the revenues that we’re seeing, in this case in Illinois.”

FanDuel Michigan shows similar success

Michigan doesn’t break down sports betting wagers by type in its monthly revenue reports. However, FanDuel does have a higher hold than its competitors in the state, which can connect it to its success with parlay betting.

In 2022, FanDuel had an 11.9% hold for its online sportsbook compared to an 8.8% collective hold for all statewide online sportsbooks. That led FanDuel to 40.9% of the statewide online revenue share at $163.5 million while having just 30.3% of the online handle share.

The trend has continued into 2023.

In January, FanDuel had a 13.3% online hold, while the state had a 7.1% hold. FanDuel accounted for 59% of the statewide online revenue at $19.9 million but just 32% of the handle.

February saw FanDuel produce an 11.3% hold, while the statewide hold was 6.6%. FanDuel had 61% of the state’s online revenue at $13.9 million with just 36% of the online handle.

Michigan lawmakers, MGCB pushing RG education in schools

Last month, Sen. Joseph N. Bellino Jr. (R-Monroe) introduced a bill requiring schools to teach responsible gambling.

Senate Bill 54 mandates the state Department of Education to develop a grade-and-age-appropriate model instruction program on gambling addiction by July 1, 2024. It would be available to school districts and public school academies.

“With the popularity of mobile betting apps and online sports betting now being legal in over 30 states, teenagers are having problems with gambling addiction,” said Bellino in a press release. “It has been reported that many young people don’t see gambling as risky and that the percentage of high school students with a gambling problem is double that of adults. My bill has bipartisan support to head off this growing problem by acting to raise awareness among our students about the real risks of gambling.”

The Michigan Gaming Control Board has advocated for responsible gambling to be the fourth “R” added to education along with reading, writing and arithmetic.

For the 2023 fiscal year, the MGCB sought and received additional funding for responsible gaming programs. That allowed them to expand their resources and increase staff focused on RG.

If you or anyone you know needs help with their gambling-related issue, call the Michigan Department of Health and Human Services Problem Gambling Helpline at 1-800-270-7117.