Kenneth C. Wilbur: “We need good research and solid data to sort things out.”

We reached out to Kenneth C. Wilbur, Professor of Marketing and Analytics at the Rady School, who co-authored the "Online Gambling Policy Effects on Tax Revenue and Irresponsible Gambling" Our conversation focused on finding out the pillars of good policy when it comes to gambling, those that are based on empirical research and solid data to help sort things out as Professor Wilbur puts it.

The research pays particular attention to low-income gamblers and the risks they face, as does Professor Wilbur in our conversation. He takes a scientific approach to analyzing gambling not in terms of "good" or "bad," but rather in terms of what can be done to protect consumers and how regulatory and policy decisions can be better calibrated to reflect ground facts. He argues that all of this should be grounded in solid data and ongoing research.

Q: Kenneth, would you describe "Online Gambling Policy Effects on Tax Revenue and Irresponsible Gambling" study as groundbreaking? Did we learn something that wasn’t already known?

Yes, the study offers several first-of-their-kind findings. It shows how gambling outcomes depend on the types of gambling legalized (retail sports betting, online sports betting, online casino gaming, etc.). It measures how many gamblers spent large proportions of income on gambling, how those spending rates changed after gambling legalization, and how the changes relate to income. We believe it is the first longitudinal study to estimate gambling legalization effects on gambler helpline calls and total suicide rates.

I encourage readers to download and read the study for themselves. The paper is available for download on the Social Science Research Network.

Q: How do you think the study would impact the legalization of sports betting and online casinos from this point on, and do you think that policymakers would consider your findings in revisiting already established gambling frameworks?

The only reason we conducted this study was to help inform policymakers. We do not advocate specific policies. Gambling legalization involves some significant positive and negative consequences. Reasonable people can disagree as to what should be legal or taxable.

My only strong opinion in this area is that empirical research can help to inform policymakers about the effects of recent policy enactments. We want policymakers to review the evidence. Several U.S. states are refining their rules as the industry develops. For example, Illinois recently raised sports betting operator tax rates from 15% up to a 40% maximum rate.

I expect that new policies will be enacted in more places. I also expect that recent policies will be refined in some places. For example, legislators in several states that enacted online sports betting have introduced bills that would allow online casino gaming. I hope that policymakers make efforts to learn from recent outcomes as they consider new rules.

Q: Do you think things with low-income gamblers will become worse in terms of problem gambling before they get better?

It could go either way. More gambling overall likely means more problem gambling. However, problem gambling in regulated environments may be less harmful overall than problem gambling in unregulated environments. We need more research to make conclusive statements.

All gamblers need to understand what level of gambling endangers their finances and responsibilities. However low-income gamblers have less slack and less ability to recover from a mistake. So, irresponsible gambling by low-income gamblers may be especially risky.

Policy details are important. Policy can affect gambler helpline resources, public messaging about resource availability, and public messaging about responsible gambling. Policy can also affect how gambling operators use customer data to identify at-risk gamblers and help their customers to avoid serious problems. In the long run, policy can influence what most gamblers perceive to be normal or aberrant gambling behavior. But policy can also have unintended consequences, so continued attention and refinement are important.

Q: Is there no clear argument supporting the mass legalization of sports gambling from a responsible gambling perspective? Before regulation, people used the black market without protection, but now, with the expansion of legal sports gambling, problem gambling seems to be increasing. How do we balance the need to eliminate the black market with the rising issue of problem gambling?

I’m neither pro-gambling nor anti-gambling. As an academic my job is to conduct original research. I try to help inform policymakers about the consequences of recent policy changes.

I would say that I think society is learning through experience. In the U.S., the major professional sports leagues were anti-gambling just 15 years ago. Now they are partnering with gambling operators.

There are numerous arguments against banning potentially harmful activities. One is that bans may not fully curb illegal activities. Another argument is that an activity may harm consumers more when it occurs outside legal channels.

A third argument is that regulated operators can be held accountable for pursuing harmful policies, and therefore may offer safer environments. There are also good arguments against legalization. Ultimately, we need solid data and sound judgment to sort things out.

Q: From your standpoint as a researcher, has the most recent study given your ideas about further research?

I’m very interested in conducting future studies in this area. The industry is growing rapidly and offers fascinating questions. Our team is actively considering new ideas and opportunities.

We would be happy to partner with industry participants who are motivated to enable scientific research. I have partnered with dozens of firms over my 20-year research career. This particular paper was enabled by a gambling data reporting organization and an anonymous digital panel data provider.

Industry collaborations offer greater scale, realism and domain expertise than a purely academic study. They also can offer data and interventions that would otherwise be unavailable.

However, academic studies have to be scientific, first and foremost. I require freedom to publish scientific results without censorship. There has to be transparent disclosure and replicability. So there has to be openness and some incentive alignment at the outset. It can be a tricky needle to thread but I am always motivated to try.

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