The impact of legal sports betting is becoming clear

Since the Supreme Court overturned a federal law prohibiting sports betting in 2018, 38 states have legalized it.

And business is like those cars with a tricked-out bass system – booming. Americans spent ~$120 billion on legal sports bets last year, a 28% increase from 2022. And betting figures from this January show a 14x increase in sports betting since January 2019.

But while the industry itself is in the midst of a Gatsby-like party, growing research indicates people are financially worse off in states where betting is legal.

• This summer, UCLA and USC researchers published a paper that examined consumer-­credit data and analyzed what sports betting did to the financial health of the states where it was legal. They found a 28% jump in bankruptcies and an 8% increase in debt sent to collection, as well as growth in late auto loan payments and weakened credit scores.
• A separate study, published last month, found that for every dollar put toward a sports bet, a household’s net investments drop by $2; in the two to three years that followed the legalization of sports betting in a state, net investments dropped 14%.

Who’s affected: As with many things, a small percentage of America appears to be responsible for a majority of sports betting. In Connecticut, ~71% of all legal gambling revenue comes from the less than 7% of its residents who are problem (1.8%) or at-risk gamblers (4.9%), according to a study published earlier this year.

The house always wins. So far, legal sports betting has two big winners: gambling companies such as Fanduel and DraftKings, which are participating in a large, fast-growing market, and state governments, which have raked in $6+ billion in tax revenue from sports bets since 2018 (per Legal Sports Report).

👀 Looking ahead… The US online sports betting market is projected to grow at an annual rate of 10.73% through 2029, according to data from Statista.

+IMPORTANT: If you or someone you know has a gambling problem, the National Council on Problem Gambling Helpline offers a confidential, 24-hour helpline for problem gamblers or their family members. Just call 1-800-GAMBLER.