As sports betting becomes more widespread across the U.S., its impact on financially vulnerable groups is raising alarms. Recent studies reveal that sports gambling is exacerbating financial struggles for many low-income Americans, particularly young men. While sports betting might seem like harmless fun for some, it’s leading to significant financial setbacks for others, especially those already facing economic hardships.
A paper published this month by researchers at the University of Southern California and the University of California Los Angeles found that in states with legal online sports betting, the average credit score has dropped by one percent within four years of legalization. Even more concerning, the likelihood of bankruptcy has spiked by 28 percent after just two years. This financial strain is hitting hardest among young men in low-income areas, who are more likely to see their financial health deteriorate due to sports gambling.
“We find broad evidence that legal sports betting, and in particular mobile/online access to betting, has led to significant increases in problematic debt activity and a worsening of consumer financial health,” study co-author Brett Hollenbeck posted on X.
The rapid growth of the industry, fueled by the 2018 Supreme Court decision that legalized sports gambling nationwide, has led to a boom in betting activity. With over $120 billion wagered in 2023 alone, the industry is generating substantial revenue, but at a significant cost to many Americans. In fact, households in the bottom third of the income bracket are the most likely to experience negative financial impacts, as they spend a larger share of their income on gambling, pushing them further into debt.
Researchers from Northwestern, the University of Kansas, and Brigham Young University released a report earlier this summer, revealing that for every dollar spent on sports betting, about two dollars less is invested in stocks and other financial assets. This indicates that sports betting is not just a harmless distraction—it is actively diverting money that could otherwise go into savings or investments. Households already struggling with low savings are particularly vulnerable, often resorting to credit cards to fund their gambling, leading to increased debt and financial instability.
As sports betting continues to grow in popularity, careful consideration of its broader impact is imperative. While the practice offers entertainment and can boost state revenues, the financial toll on vulnerable populations raises important questions about whether the benefits truly outweigh the costs. With financial strain mounting, it’s clear that for many, the excitement of the game is coming at too high a price.
