The Business of Sports Betting: How U.S. Sportsbooks Profit and the Costs They Create

The purpose of this research was to examine how sportsbooks in the United States used advertising techniques to attract and retain users while ensuring that they remain profitable through bet structuring and odds setting.It also analyzed how these techniques resulted in ethical concerns that the industry has faced since legalization.To do this, a literature review was conducted of both scholarly and contemporary sources that mainly focused on marketing, revenue models and ethical impacts.The research showed that sports betting companies grew rapidly due to aggressive advertising, media and league partnerships, and social media influencer marketing.These companies secured profitability through mechanisms like vigorish and introducing new in-play bets, while ensuring that users stayed on their platforms through loyalty rewards and exclusive promotions.However, these practices have contributed to underage betting, widespread gambling addiction and athlete harassment.These findings suggest that while sportsbooks have created effective marketing strategies and reliable revenue models, future industry practices and government policies should focus on balancing sportsbook profitability with consumer protection, so that the harms of widespread sports betting could be limited.advertising tactics used by sports betting companies on attracting and retaining consumers and its connection to how sportsbooks generate profit.It will also explore how these advancements in sports betting have led to ethical concerns.Exploring both the financial and ethical aspects of sports betting can provide a more balanced view of the industry. MethodologyThis paper aims to explore how sports betting companies based in the United States use advertising to obtain and retain customers and how they ultimately make a profit through odds-setting and bet structuring.Additionally, it sets out to explore the ethical considerations and effects that sports betting has on problem gamblers.To investigate this, a qualitative literature review was conducted to help examine existing research on sports betting.Scholarly articles were collected from databases including PubMed, EBSCOhost, and Google Scholar, as well as trusted law reviews.Keywords, such as "sportsbooks odds-setting" and "problem gamblers and sports betting", were used to find these articles.Additionally, non-scholarly articles from reputable news publications were also examined.Given that sports betting is a relatively recent development in the United States and it is rapidly evolving, more contemporary non-academic articles are needed to provide more current context and insight that scholarly articles cannot.Relying on older peer-reviewed articles can present the risk of missing how quickly marketing practices and technologies change within the fast-paced industry.Articles were chosen based on relevance to the research question, publishing date and contribution to an understanding of the historical, marketing, financial, or ethical aspects of sports betting.By favoring articles published in or after 2018, the research was able to accurately reflect the developments in sports betting that came after the repeal of PASPA and the legalization of sports betting throughout the United States.After the articles were collected, they were sorted into five main themes: history and legalization, growth and popularity, marketing strategies, revenue modeling and ethical considerations.These themes were then analyzed to find trends and ultimately answer how sportsbooks obtain a user base and profit off of their users using bet structuring and odds-setting.This method allows for thorough analysis of existing research as well as deeper insight into the sports betting industry and its inner workings.