Why making Americans bet with cash could protect people from gambling problems
By adding friction and making it possible for people around problem gamblers to see what they’re up to, a cash requirement could protect them from big losses.
The United States has seen a significant surge in gambling activities, with casinos and sportsbooks earning $79 billion in 2025, a 20% increase from $66.5 billion in 2023. This growth extends beyond conventional gambling, with prediction market companies also thriving. However, this ease of access to gambling has led to several issues, including addiction, insider trading, and manipulation by large bettors known as "whales."
In 2018, the U.S. Supreme Court ruled in Murphy v. National Collegiate Athletic Association that individual states could legalize sports betting within their borders. Subsequently, companies like Kalshi and Polymarket have gained popularity, allowing bets on events beyond sports and operating outside state control. These prediction markets, regulated by the Commodity Futures Trading Commission, are not subject to local restrictions like age requirements or prohibitions in states like California and Texas.
The three main problems associated with gambling are addiction, insider trading, and manipulation by whales. Addiction is a significant concern, with an estimated 20 million Americans classified as problem gamblers, representing about 6% of the population. Insider trading is a concern in prediction markets, where knowledge of future events can lead to illegal profits. Manipulation by whales, who can significantly influence event outcomes through large, anonymous bets, is another issue.
Despite the industry's ability to create jobs, proponents argue that its employment gains do not sufficiently offset the problems it causes. The number of jobs in online gambling peaked in 2007 at nearly 70,000, but has since fluctuated, ending in 2024 at just over 67,000. The industry's dependency on tax revenues and the media's reliance on gambling advertising also contribute to its persistence.
A potential solution to reduce gambling-related issues while maintaining the industry's benefits is to require cash transactions for betting and account funding. This would introduce friction into the process, making it more difficult for individuals to engage in large, anonymous bets.
Written by urgent.news from The Conversation's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
