Do Sports Books Make More Money Than Slot Machines
Most research on compulsive gambling focuses on the psychological, biological, or even moral profiles of gambling addicts—but the real problem may be the slot machines. MIT anthropologist Natasha Dow Schull recently won the American Ethnological Society’s 2013 First Book Prize for her new work, Addiction by Design: Machine Gambling in Las Vegas, which explores the relationship between gamblers and the technologically sophisticated machines that enable—and encourage—them to bet beyond their means. Schull, who spent fifteen years conducting ethnographic research in casinos, gambling industry conventions, and Gamblers Anonymous meetings in Las Vegas, explained to me over the phone, “Addiction is a relationship between a person and an activity, and I see my book as compensating for the lack of research into the object side of the relationship. With alcohol research, for instance, there has been a focus not only on the alcoholic but on the alcohol itself. With gambling, the focus is most often on the person. It’s essential to broaden that.”
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Alice Robb: Why should a cultural anthropologist study gambling?
Natasha Dow Schull: Games are a great window into culture. They indicate what the populace is anxious about or is seeking out. The fact that people are being drawn to individual machine consoles rather than high-volatility, intense social games tells us a lot about the risk and volatility that people feel in the world, in their lives—think of the financial crisis, the culture of fear around terrorism, the environment, global warning. It makes sense that people would seek out games that allow them a sense of control and predictability.
You don’t think about gambling as that kind of a game. You would think it’s about thrill and risk, but actually slot machines provide people with a sense of safety and certainty.
In 1967, the anthropologist Erving Goffman described gambling as the occasion for “character contests” in which participants could demonstrate their courage, integrity and composure under pressure. Today, our anxieties are very different, and with slot machines we’re seeking a sense of safety and routine—the opposite of what Goffman describes.
AR: How does gambling promote a sense of security? Isn’t gambling about risk?

NDS: When gamblers play, they’re going into a zone that feels comfortable and safe. You’re not playing to win, you’re playing to stay in the zone— a zone where all of your daily worries, your bodily pains, your anxieties about money and time and relationships, fall away.
One addict I interviewed described being in the ‘zone’:
It’s like being in the eye of a storm…Your vision is clear on the machine in front of you but the whole world is spinning around you, and you can’t really hear anything. You aren’t really there—you’re with the machine and that’s all you’re with.”
New kinds of machines are key. With multi-line slot machines, say you put in a hundred coins. If you’re betting on 100 lines of play, you’ll always ‘win’ something back. If you put in 40 coins and get 30 back, that’s a net loss, a ‘false win’, but the machine responds as if you’ve won: The lights go off, you get the same audiovisual feedback. Almost every hand, you get the same result— there are no dry spells.
AR: You say that people want to get away from their fears about money and people. So why escape by spending money in a casino that’s full of people?
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NDS: In order to get away from the burdens and anxieties associated with monetary value and interactions with other people, you have to work within those mediums and convert them into something else. To get away from money, you have to play with it; gamblers spoke about how money became currency for staying in the zone.
And even though there are people around, it’s still very anonymous. You set yourself up alone in a machine-like pod and everything blurs away—the other people are just a kind of necessary background. People seem not to be able to do that on the couch alone. A lot of the gamblers I talked to would play on hand-held machines at home in between their sessions at the casinos, but they couldn’t achieve that zone as readily.
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AR: Why are slot machines so much more addictive than more traditional forms of gambling?
NDS: Even though slot machines are considered to be a light form of gambling due to their relatively low stakes, ease of play and historical popularity with women, they are actually the most potent. There are three reasons why: Playing on slot machine is solitary, rapid, and continuous. You don’t have interruptions like you would in a live poker game, waiting for cards to be dealt or waiting for the other players. You can go directly from one hand to the next—there’s no clear stopping point built into the game. You don’t even have to stop to put bills in the machine; the machines take credit or barcoded tickets.
AR: What do new gambling machines say about our relationship with technology?
NDS: The cultural history of gambling in this country follows alongside technological advances—not only because technology make these new kinds of machines possible, but because we’ve become comfortable interacting with and even trusting computers and machines.
You can see that in the revenue: 80 percent of revenue in Las Vegas comes from individual encounters with slot machines rather than social forms of play around a table. Whereas in a place like Macao—which has far greater revenue from gambling than Las Vegas—it's the exact opposite: 80 percent is coming from table games, because people have a distrust of computers and machines.
AR: How could your work affect the public conversation on gambling?
NDS: States around the country are considering gambling as way to increase revenue in the recession—and it’s the revenue from machines that they’re anticipating. I think this is a very dubious proposition since, as I show, these devices are so clearly problematic. Machines are designed to draw people in and sometimes do so in deceptive ways; their design affects all players, not just a small group of addicts. Legislators need to understand how these machines work.
Sports betting has largely been illegal in the United States for decades. The Professional and Amateur Sports Protection Act (PASPA) outlawed the activity in all but four states.
Out of these states, only Nevada was allowed to offer full-service sportsbooks. The rest of the country has largely relied on offshore sportsbooks for their betting needs.
However, the US Supreme Court paved the way for legal sports gambling after striking down PASPA in May 2018. Although this landmark decision doesn’t legalize sports betting on a federal level, it gives states the right to decide.
Some states, such as New Jersey, have jumped on the opportunity and are already offering sports wagering. Many other states have plans to do the same in the near future.
The sports betting industry appears to be the obvious winner in last year’s Supreme Court decision. However, slot machines may actually be the biggest beneficiary of legal betting.
But how can this be true when considering that slots have little to do with wagering on sports? Keep reading as I discuss more on why slot machines figure to make the most money off the recent legalization of sports gambling.
Why Is Sports Betting Legal in the US Now?
The US has always been leery of sports betting dating back to 1919 when several members of the Chicago White Sox fixed the World Series. Ever since then, professional sports leagues have been very afraid of match-fixing.
You can’t blame them, either, when considering that match-fixing ruins the integrity of sports. However, many European countries have offered sports betting with no major corruption incidents.
The US held steadfast to their prejudice against sports betting until last May.
They’ve always felt that they have more to lose than gain from legal sports gambling. However, attitudes have changed recently among the MLB, NBA, and NHL.
NBA Commissioner Adam Silver told ESPN that legalized sports betting offers an easier path for “[the NBA] to monitor our integrity.” Silver, MLB Commissioner Rob Manfred, and NHL Commissioner Gary Bettman have the same feelings about legal sports gambling.
Of course, their support alone didn’t get PASPA repealed. Furthermore, the NFL and NCAA did their best to block such a decision from happening.
But New Jersey, led by former Governor Chris Christie, was instrumental in battling for legalization. Christie and New Jersey politician Ray Lesniak both fought mightily for the right to offer sports betting.
Their efforts pushed the matter to the Supreme Court, where PASPA was ruled unconstitutional by a 6-3 vote. Every state now has the right to choose if they want to legalize the activity.
How Does US Sports Betting Look Now?
The US federal government has still yet to officially weigh in on sports gambling. Ideally, they’d legalize the activity across all of America and create a larger market.
As it stands now, though, the matter is decided on a state-by-state basis. Delaware, Mississippi, New Jersey, New Mexico, Pennsylvania, Rhode Island, and West Virginia have all opened their own markets.
More than a dozen other states are currently mulling over legislation that would allow them to feature sports wagering as well. Any state that legalizes it would be open for land-based sportsbooks.
It’s unclear how many of these same states will also feature online sports betting. Mississippi, for example, offers legal mobile sports gambling at land-based and riverboat casinos. They don’t, however, allow traditional online betting sites.
New Jersey and Pennsylvania both plan to feature internet sports gambling. But it would only be available on an intrastate level.
Interstate sports gambling, on the other hand, figures to be a very controversial matter. In 2011, the US Department of Justice (DOJ) offered the opinion that only online sports betting violates the 1961 Wire Act.
In 2019, they revised this opinion to include all types of iGambling. But the fact that they singled out internet sports gambling the first time around doesn’t bode well.
The Spread of Sports Betting in America
As mentioned before, many states are expected to offer legal sports gambling in some capacity. They would join the aforementioned states that already have active markets.
The Urban Institute’s Richard Auxier told Yahoo! Sports that nearly every state could have legislation prepared in the near future.
“You could possibly see a bill in all remaining states that have not yet legalized gambling, except for Utah,” he said. “Utah has a constitutional amendment banning gambling so they will not be taking this up.”
Hawaii is the only other state with no form of legal gambling, but even the Aloha State is mulling over the prospect and may introduce a bill.
Auxier went on to say that “at least 10, if not 20” states will take their legislation to the next step by legalizing sports betting.
Why Slot Machines Figure to Benefit More Than Sports Betting
The future looks bright for sports gambling in America. After all, many states are at least interested in legalizing it.
But sports wagering doesn’t necessarily guarantee the big profits that many are predicting. Although huge around the globe, sports betting may not be such a boon for individual states.
The activity could simply end up being another draw for casinos. Gambling venues with sportsbooks will lure fans who’ll place a few bets. But they’ll actually end up spending the bulk of their money in other areas.
Given that slot machines are the primary revenue generator for casinos, they figure to draw the most action from new customers. Here are other reasons why slots will benefit more from PASPA’s repeal than sports gambling itself.
Slots Already Make Far More Money Than Sports Betting
Roulette live online casino. Auxier discussed how the expectations for legal sports betting are much higher than they should be. He noted that people often talk about how each state could make “billions,” when what they’re really referring to is the “handle,” or the total amount of bets placed.
Even though the win ways cannot be adjusted, players can choose between different stakes. Bally hee haw slot machine.
Here’s an example to compare handle with revenue and profits:
- A sportsbook handles $100 million in total bets
- They make $5 million in revenue
- The bookmaker has $3 million in expenses
- They end up with a $2 million profit on $100 million of betting action
- The state imposes a 20% tax rate
- 2,000,000 x 0.2 = $200,000 to the state
You can see that both the state and sportsbook only make a small percentage off the $100 million in wagers. Scenarios like this are a big reason why Auxier said that the “money is going to be relatively low” for bookmakers and states.
Nevada smashed their records for sports betting revenue with $301 million in 2018. This figure is up 21% from the $248.8 million made the previous year.
Of course, Nevada is the pinnacle of American sports gambling. Few states have any chance to reach the amount of revenue that the Silver State hauls in.
Their sports earnings don’t come close to equaling the $11.9 billion that Nevada casinos made in 2018. The state government collected just over $800 million in tax revenue off the casinos’ winnings.
Contrast this to the $20 million that Nevada earned in sports betting tax revenue, which represents just 2.5% of the government’s gambling overall take.
“States shouldn’t be banking on getting a lot of money,” said Auxier. “As more states begin to legalize it, they’ll be starting to see even less.”
Switching to slots, the one-armed bandits earned over $7.7 billion in 2018. This amount represents around 65% of Nevada’s overall casino gambling revenue.
The state’s $301 million in sports betting revenue is only a fraction of what slots earned. Using Nevada as an example, states should expect sports bettors to spend even more on slot machines once they’re inside the casino.
Casinos With Slots Will Greatly Outnumber Legal Sportsbooks
Operators aren’t going to flock to states just because they have legal sports betting. The right deal needs to be in place in order to attract companies.
Certain states are setting themselves up to be unattractive destinations. Pennsylvania is one such example because they require a $10 million licensing fee along with a 34% tax on gross receipts.
Most sportsbooks won’t want to operate in the Keystone State when considering that Nevada only features a 6.75% gambling tax.
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Pennsylvania features the same rigid tax structure for casino gambling. But as highlighted above, casino games bring in far more money than sports betting.
Therefore, the number of slots opportunities will vastly outnumber sportsbooks.
Online Sports Betting May Never Be Legal Across State Lines
Do Sports Books Make More Money Than Slot Machines Required
I mentioned earlier how, in 2011, the Department of Justice gave the opinion that interstate sports betting is illegal. Even with their expanded 2019 opinion that all forms of internet gaming are unlawful, it’s clear that online sports betting faces an uphill battle.
Sports gambling only recently became legally accepted thanks to the repeal of PASPA. Contrast this to legal online poker and casino games, which have been available since 2011 and 2013, respectively.
The states themselves can decide what to do with internet sports betting. New Jersey is currently working on their online betting market.
But even with its 9 million residents, the Garden State doesn’t figure to have much liquidity with internet sports gambling. They’re not like Bovada or Pinnacle, which can draw millions of bettors from around the world.
Of course, online slots aren’t available on an interstate basis either. But they’ll likely be available across state lines before sports betting.
The Leagues Want a Cut of US Sports Betting
Do Sports Books Make More Money Than Slot Machines Without
A big reason why professional sports leagues are suddenly in favor of betting is that they could potentially earn a cut of the action. The NBA is especially pushing for an integrity fee, which would see them collect a proposed 1% of the total handle.
Commissioner Silver proposes that the 1% integrity fee is necessary to fund policies that would prevent match-fixing scandals. But what happens if every major pro sports league and the NCAA also wants the cut?
Even if just the NBA received a 1% take, it would severely slash an operator’s income. Most bookmakers earn around 5% of the total handle, which means that they’d only collect 4% after the integrity fee is factored in.
Slot machines, on the other hand, don’t have to deal with sports leagues breathing down their necks. They only need to pay the state gambling tax, which makes it much more cost-effective to offer slots instead of sports betting.
Do Sports Books Make More Money Than Slot Machines To Play
The Federal Government Still Might Weigh in on the Matter
Just because PASPA is repealed doesn’t mean that the federal government can’t still make a decision on sports betting. In fact, several politicians are interested in drafting their own legislation.
Rep. Frank Pallone (D-NJ) has already introduced the Gaming Accountability and Modernization Enhancement (GAME) Act, which would legalize sports betting on a federal level. Furthermore, it would provide extensive protections for gamblers.
Pallone’s bill would definitely be a boon for sports gambling. However, there’s no telling what other kinds of legislation could be brought forth.
Sheldon Adelson has been actively waging a war against online gaming. He’s definitely not happy that New Jersey and Pennsylvania are planning to feature internet sports betting in the near future.
Adelson, who’s currently battling cancer, has funded politicians to push his agenda. South Carolina Sen. Lindsey Graham has been very active on the Las Vegas Sands owner’s behalf.
Graham, or another one of Adelson’s funded cronies, could introduce a federal ban on sports betting. The government may vote down such a measure, but any such legislation would remain a threat to sports gambling.
Meanwhile, slot machines don’t face quite the same challenges. They’re still subject to Adelson’s vendetta against online gaming, but no politician is going to introduce a bill to ban slots on a federal level.
Conclusion
Sports betting’s future is brighter than ever. Regulated state markets mean that bookmakers can actually advertise through mainstream channels in the US.
Such advertising has been very effective for online casinos in New Jersey, with some gaming sites partnering with professional sports teams. Bookmakers would likely benefit from the same type of relationships.
Compare this to the current situation, where most sports betting is done through offshore sites. These unregulated sportsbooks can’t advertise through mainstream outlets in America, which keeps the industry fairly underground.
But even with everything good that’s happening for sports betting, the industry is being subjected to unrealistic expectations. Some people are confused between betting handle and revenue.
The handle, which will likely measure in the billions for most states, is sometimes mistaken for how much bookmakers earn. In reality, sportsbooks only earn around 5% of this amount.
Nevada collected $300 million in revenue from their betting market. While this is an impressive figure, it doesn’t quite compare to the lofty predictions being placed on each state with legal sports betting.
In the end, slot machines could end up being bigger beneficiaries of sports gambling than the activity itself. New customers may visit sportsbooks to wager on big games, but they’ll wind up staying at the casino and spending more on slots.
Sports gambling is a nice side product for many Nevada casinos. However, it only generates 4% of the revenue that slots bring in.
You can expect the same lopsided difference between slots and sports wagering revenue in other states that offer both. Betting will draw new people to casinos, but these same gamblers will likely spend more money on slots after placing their sports wagers.
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