Sports betting apps entice fans as gambling exacts a growing financial toll

When Meta agreed last month to pay states $17.1 billion in penalties and make major changes to address claims that its platforms are addictive, attorney Jennifer Hoekstra already had her eyes set on the next frontier in the consumer backlash to Big Tech — sports betting.

Hoekstra, a Florida attorney whose firm was involved in an earlier win in court against Meta, recently filed a series of 15 lawsuits against the two biggest sports gambling apps in the country, FanDuel and DraftKings. The cases follow a similar legal theory: that gambling apps were designed to addict.

"I represent individuals who have essentially lost their houses and their spouses and their kids over this," Hoekstra told CBS News. "It's the same type of workflow, the same type of notifications. It's almost as if it's the same type of addiction."

At a time when online sports gambling has exploded in popularity — with the amount wagered reaching $167 billion last year, according to the American Gaming Association — there are mounting concerns about the financial toll of all that betting.

One UCLA study published earlier this year found that in states that legalized sports gambling online, bankruptcies and credit card delinquencies increased about 25%. A survey by the National Council on Problem Gambling found 8% of American adults, almost 20 million people, reported experiencing at least one indicator of problematic gambling behavior "many times" in the past year.

Gaming companies are vigorously fighting the cases, and dispute the notion that they are fueling addictive behavior. FanDuel, the largest online platform, told CBS News that "any claim that we don't aggressively take actions to monitor and curb problem behavior is completely false."

FanDuel, which has about 18 million customers, said it invested $158 million on responsible gaming and removed 5,700 people from the platform due to their gambling behavior last year.

A CBS News investigation has found that gaming companies are pushing hard to keep bettors engaged — even in cases where gambling losses are mounting.

"It's less about cutting them off than slowing them down," a former FanDuel employee told CBS News, speaking under the condition that he not be identified because he did not want to jeopardize his current job. "It's never forever."

The gambling company insider said some of the people he worked with at the company looked away when customers might be betting too much.

"I had conversations with people where they would say, 'Well, we know what we should do, but … we don't want to slow them down from placing a bet."

Sports gaming apps deploy both low- and high-tech tactics to keep customers betting.

Much as Las Vegas casinos plied high rollers with gourmet meals and lavish entertainment, sports gaming apps are now rewarding VIP bettors with luxury suite access, autographed jerseys and unique fan experiences.

Esteban Ruiz-Haynes had never been to a pro hockey game until he started wagering on sports apps. Before long, Ruiz-Haynes was sitting 20 feet from scoring champ Alex Ovechkin at Washington Capitals games and walking the sidelines at the Baltimore Ravens' stadium.