People often ask me how much does sports betting add to the U.S. GDP? To which I usually reply, “Not much.”
The question usually comes after a casual observation that people are spending more and more time watching sports, and with the growth of eSports, it wouldn’t be surprising if this trend continued and then some. When people ask me about whether or not this is a good thing, I tell them it depends on what they want out of the experience. If they want to feel like they are truly betting on their favorite sports teams, then I suggest they try and find a way to do so legally. If, on the other hand, they want to indulge in some luxury, then watching and betting on sports is certainly a way to do so.
What Is GDP?
The U.S. GDP, or Gross Domestic Product, is the market value of all the goods and services produced in the U.S. economy in a given period of time. It is usually calculated by adding up all the value of all the goods and services produced within the U.S. over a given period of time, usually a year. (The goods and services are defined in a country’s own currency.)
The U.S. GDP for 2018 was 4.8 trillion dollars, which is equivalent to about 4.8 trillion U.S. dollars. (This is not counting corporate profits, which are generally not included in GDP calculations, but which are often seen as a source of revenue for sports franchises, arenas, and other businesses affiliated with athletic programs.)
(All figures mentioned in this article are in U.S. dollars. As the value of the dollar fluctuates, it is important to note that the comparisons remain the same.)
Why Shouldn’t We Include Sports Betting In Our GDP Calculations?
There are a number of reasons why sports betting should not be included in our GDP calculations. First, it is generally considered an illegal activity in most places, and as a result, it is difficult to measure its true value. For example, most states in the U.S. do not allow the legalization of sports betting, so even if it is considered a legal activity, it is still generally considered gambling, and gambling is not considered to be a “good” or “productive” behavior. (In some places and states, it is legal to bet on sporting events, but the practice is still considered to be gambling and is therefore illegal under federal law. This, however, does not apply to online sports betting websites that are generally considered to be legal enterprises.)
Including sports betting in our calculations would also be a difficult task, given that it is not possible to value individual match-ups, events, or games. (Consider the case of a popular tennis star who wins a match through sheer will and athletic superiority. While this is an inherently valuable achievement that inspires fans, it does not necessarily translate into economic benefits for the country.)
Including sports betting in our calculations would also be problematic because betting on sports is considered a “waste” of time and resources. Consider this: Since betting on sports is illegal in many places, gamblers turn to offshore sites and unregulated websites to place their bets. This means that much of the money that could potentially be going into U.S. economies is diverted into illegal activities, such as drug dealing and money laundering, and less accessible forms of capital are leaving the country. For instance, consider the case of a professional baseball player who lives and plays in the U.S. The MLB is a heavily-regulated industry, and it is difficult to bet on baseball outside of the U.S. There is also the problem of “frontrunning,” where companies set the price for financial products, such as currencies, based on their expectation of the future market value of those products.
How Is Sports Betting Different From Other “Waste” Activities?
Many people argue that sports betting is not actually that different from other “waste” activities, like watching television or spending hours on social media. These people feel that since watching sports is considered to be a form of entertainment, it should not be considered to be “productive” activity and therefore should not be included in GDP calculations.
This, however, is one of the biggest misconceptions about sports betting and its inclusion in GDP calculations. Just because something is considered to be a “waste” of time and resources does not mean that it is the same as other “waste” activities. For example, if you compare the time that people spend watching television with the time that they spend playing video games, it is clear that television is not a “waste” of time. (Though, to be fair, many people do consider television to be a “waste” of time. This is often due to the increasing amount of time that people spend watching commercials and games that they have no interest in, simply to keep up with the competitions and events that they do follow.)
The reason why sports betting is so important to the U.S. economy, aside from the fact that it is a popular pastime among its citizens, is that it provides a lucrative market for sports franchises, arenas, and other businesses affiliated with athletic programs. Consider that nearly $13 billion was wagered on sports last year alone, and much of this was done online, where taxes are generally not collected. (Though, as I mentioned before, taxes do apply for online wagers in some places.) That is a lot of money, which is generally well-spent, considering that the global market for sports is somewhere in the vicinity of $150 billion annually.
Will Legalizing Sports Betting Improve The U.S. Economy?
When someone asks me whether or not legalizing sports betting would be a good idea, I usually respond with an emphatic “yes.”
I feel that it would be a good idea to legalize sports betting in the U.S. The first and foremost reason for this is that it would provide an opportunity for people to engage in legal, well-regulated gambling, which is usually seen as a good thing. Second, it would provide an opportunity for people, who are generally considered “waste” activities in most places, to generate a legitimate revenue stream. (This does not necessarily mean that all “waste” activities are good, but rather that they should not be considered to be the same as “productive” activities, such as manufacturing or scientific research.) Finally, it would remove the stigma that is often associated with gambling. In many places, it is still considered to be a moral failing to place bets on sporting events, despite the fact that odds are generally well-established and are readily available to anyone who wants to make a wager. Legalizing sports betting would allow people to engage in a behavior that is generally considered to be “good” and remove the social stigma that is often associated with gambling.
How Can Legalizing Sports Betting Improve Social Harmony?
I believe that one of the primary reasons why people want to legalize sports betting in the U.S. is for social harmony purposes. For many years now, there has been a dramatic rise in violence associated with sporting events across the globe, as well as a rise in the number of people committing crimes such as arson, assault, and battery, just to name a few.
Consider the case of professional football, where there is an ongoing debate about whether or not to move the game to another city due to the increasing fear of violence and terrorism. Cities like London and Madrid have already begun to consider moving their games due to safety concerns, while others, like New York and Chicago, have worked to reduce the violence that plagues their sports scene. (One important point to make is that much of this violence comes from people who are already socially marginalized, and in some cases, suffer from mental illness. To a large extent, most of these tragedies could be avoided if the community of people who love football would simply accept that sports, like any other form of entertainment, can be enjoyed without causing harm to oneself or others.)
By legalizing sports betting, communities would have the option of accepting and enjoying sports, or, they can choose to eliminate the potential for violence by limiting the ability of people, who may be suffering from mental illness, to engage in this dangerous behavior. (This does not mean, however, that all forms of entertainment will promote violence. For example, consider the case of anime, where fandom can be extremely passionate and lead to nothing more than friendly, fandom-related contests, but where violence is generally not tolerated.)