Sports gambling and marijuana were both legalized on the promise that vice is safer as a regulated industry than as a black market. Turns out we didn't have to choose. We got both. Legalization hasn't squashed the black market for either vice, and it has exposed far more Americans to the harm.

"Legalization would protect the integrity of sports by converting activity that currently occurs in the black market into a legitimate, well-regulated leisure activity," Guy Bentley, the Reason Foundation's director of consumer freedom, wrote in 2018.

That same year, the Supreme Court struck down the federal ban on sports betting, and 39 states have since legalized it. But the legal industry hasn't delivered the reduction in harm its backers promised. Instead of shrinking the harm, it has spread it.

Nor has it killed the black market. Bettors pay income tax on their winnings, and some states take up to 51% of sportsbooks' gambling revenue. Illegal bookies dodge both, which keeps them in business. The American Gaming Association, an industry group, reported in 2025 that the illegal market had grown 22% over three years and still accounted for roughly a third of U.S. gambling.

Legalization has also spread gambling culture to states where........

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