People love the idea of sitting back, doing nothing, and making money. You know it’s true. That’s why get-rich-quick schemes like cryptocurrency and single stocks have gotten so popular these days. Well, here’s one more thing you can add to that list—sports betting apps (aka sports gambling).
If betting on sports makes you think of classic black-and-white movies where the main character owes money to a bookie after losing a bet at the horse races, you’re not alone. But sports betting has changed a lot here in the 21st century. Your bookie now lives in your phone—on any of the thousands of sports betting sites and apps—ready and willing to take your money. So, is putting some money on the big game a good bet? It’s time to find out.
What Is Sports Betting?
Okay, let’s cover the basics here: Sports betting is when someone bets money on a sporting event based on who will win, who will lose, or who will score a certain number of points. If your team wins, or you get the score right, you win the bet (and make some money), but if your team loses or doesn’t hit that magic number on the scoreboard, then you lose money. Pretty straight forward. Some fancy people call this sort of thing a wager. But since I’m not a British guy walking around in the London fog, I won’t.
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The sports gambling industry has gone bananas since the pandemic started. Sports betting grew 69% from 2019 to 2020 thanks to online gaming platforms becoming mainstream.1 And by the first quarter of 2021, sports betting had grown 270% from 2020—shattering yet another record.2
So, what does all that mean in dollar signs? Hang on to your sports jersey here, folks. At the end of the third quarter of 2021, sports gambling grew to a $38.67 billion industry.3 That’s billion with a B, people. And how much money did you make off your bets last year? Yeah, I thought so.
What Are Sports Betting Sites?
Sports betting websites and apps are where most people place their bets these days. Some folks call this mobile sports betting because—you guessed it—you can do it right from your phone. Thanks to the internet and sports betting apps, making a bet has never been easier. With just a few clicks, you can put $500 on the Knicks vs. Lakers play-off game. It’s about as easy and mindless as scrolling your Instagram feed—except this app is about to pull $500 out of your pocket.
Sports Betting and Your Money
Betting feels awesome . . . when you win. But when you don't, you try to recover your losses, sometimes by draining your bank account, taking out another mortgage on the house, or with lots of other desperate and stupid moves. Desperate is never a good look. And desperate never makes good money decisions either.
Oh, and let’s just be clear here—your odds of getting rich off sports betting apps are low. It takes a huge bank roll to actually make money long term. Seriously. You’d have to be betting hundreds of thousands of dollars a year to see any kind of real money from it.
Don’t use betting on the big game as an investment plan—no matter how much Big Rick with the cheese on his head at the Packers game says you should. Smart investors who want to build wealth the right way don't gamble on sports betting. They keep their investments diverse in the market and have a long-term mindset. So, if you’re just trying to use sports betting apps as an investment—don’t. You’re way better off playing the long game here and putting that money into growth stock mutual funds.
The Ugly Truth About Sports Betting
Here’s the thing with betting on sports—it’s fun. And these sports betting sites know it. They'll lure you in with the promise of a free bet, and then suck you in with the gamification of something you already love—sports and technology. And these sports betting companies know exactly what they’re doing here. They know who their audience is. They’re targeting young, impressionable people the same way the tobacco industry did years ago.
Our State of Personal Finance Study shows that 10% have placed a sports bet in the last three months. And get this—27% of them are Gen Z or Millennials. Which makes sense since Millennials came of age during the early days of the internet, and Gen Zers have pretty much had an iPad in their hands since they were toddlers. These online betting companies knew this generation wasn’t going to look for a bookie hiding outside of a sports stadium, so they brought the bookie to them—right to their phones.
But the crazy thing is, most people making these outrageous bets can’t afford the loss. They’re not made of money. In fact, that’s why they’re drawn to sports gambling—they’re trying to make money. These are the same folks investing money they can't afford to lose in crypto and Tesla single stocks while they’re still saddled with student loan debt and car payments. That just spells disaster right there.
Here’s my hot take, folks: Sports betting makes the middle class broke and the lower class even more broke. Take the already addictive nature of gambling, combine it with the gamification of mobile apps, add in some peer pressure from your sports-loving friend group, throw in the odds stacked against you by a professional bookie, and you have a recipe for a lot of broke people with more anxiety and money problems than ever.
What Sports Betting Sites Are out There?
There are a ton. Chances are, you’ve probably seen plenty of commercials and ads for these guys. Here are some of the heavy hitters when it comes to mobile sports betting sites:
Okay, let’s talk about those commercials for a second. If you watch television for about 20 minutes these days, you’ll definitely catch an ad for sports betting apps. Why? Because these guys are rolling in the money. Commercials on TV for sports gambling are out of control. And buying ad time on TV isn’t cheap. These companies are making so much money that buying commercial airtime is like a drop in the bucket for them. And you know how they’re making their money, right? Off of you.
Is Sports Betting Legal Where I Live?
Good question. Since I don’t know where you live (because that would be weird), you’re going to have to check out this tracker to keep up with the laws in your state. Here in Tennessee, online sports gambling became legal in May 2019 and went live in November 2020.4 Some states don’t have any kind of sports betting laws in place yet (looking at you, Utah).
Instead of taking the party bus to hit up a casino in Atlantic City or playing the slots in Las Vegas—gambling became a lot more mainstream in 2018. That’s when the Supreme Court decided to let states call the shots when it came to legalizing sports gambling or not.5 But opening up the waters like that? It only made it easier for people to get into trouble with gambling.
Sports Betting and Addiction
The hard truth is, sports betting isn’t all fun and games (and losing money). People get addicted to this stuff just like they get addicted to substances, like drugs and alcohol.
When you win, the reward center of your brain goes bonkers. It creates a high that you keep trying to reach over and over again. Just like taking drugs, the neurological effect here is addictive, and a lot of people get swept up in it.
Addiction is messy, and an addiction to placing bets on sports is no different. Gambling on sports rips bank accounts to pieces and tears families apart. But unlike an addiction to alcohol and drugs, a sports gambling addiction is way less noticeable. If you come into work drunk at 9:00 a.m., people know about it. But an addiction to gambling that you can hide in your phone? It’s easier to keep that tucked away without anyone knowing. And even though only 1% of the population fall into the “gambling problem” category, that’s still a lot of people (about 2 million adults, to be exact).6
If you or someone you know has a gambling addiction, you don’t have to suffer alone. Get some people in your corner who can help you. Talk to a counselor, a pastor, or your friends and family. If you don’t feel like you have anyone to talk to, you can always reach out to the 24-hour confidential national hotline too. Just call or text 1-800-522-4700 or chat online.
Bottom Line? Don’t Play the Game If You Can’t Afford to Lose
Look, the odds here aren’t good. Sure, they might be better than your odds of winning the lottery, but they still aren’t good. The house always wins. If you think you can outsmart them, you've already lost. The bookies who figure out the odds are super intelligent people who do this professionally. You can’t beat them in the long run.
At the end of the day, spending hours a week researching and trying to make an educated guess is a waste of time. Just enjoy the game and keep your sports loving separate from your money making—your life will be better for it.
I can hear you through the screen now saying, “But George, I actually did win some money once!” Hey, I’m happy for you. But even if you win, it won’t be worth all of the time and energy you wasted. Think about it—was all that effort (and all the times you lost) really worth winning $20? And you can't guarantee you’ll make that win happen again either. The truth is, you'll go broke trying.
If you still want to get into online sports betting for fun—and you can afford to lose the money—just remember a few things before you place that bet:
- You need to be out of debt, have an emergency fund, and be investing 15% into retirement. Don’t be dropping $500 betting on the big game when you haven’t even made it past Baby Step 2 yet. Nope.
- Never go into debt to place a bet. This is just dumb, people. Don’t go into debt, bet on credit, or take out a loan so you can gamble. If you feel the need to do that, then it’s pretty clear you can’t afford to lose the money.
- Budget for your bet. Whatever you do, make sure you’re budgeting for the money you gamble. Yeah, I’m serious. If it’s money you plan on spending, then it needs to be in your budget.
How much should you blow on sports betting? Well, the ball is in your court, but here’s a pro tip: Only spend what you're willing to lose, because you will (mostly) lose. And win or lose, telling your money where to go is super easy with our free budgeting app EveryDollar. Whether its gambling on sports or budgeting for groceries, EveryDollar is the best way to budget. Now that’s something you can bet on.