Millions of Americans are wagering on March Madness this year, and the numbers are staggering. The American Gaming Association projects this year’s NCAA tournaments will generate $3.3 billion in legal bets. New York alone recorded $554.7 million in wagers during the first week of the tournament, with sportsbook operators posting a historic $57.6 million in total revenue, according to TheStreet.
Sports betting, broadly, is booming. Mobile wagering is now legal in more than 30 states — a seismic shift that followed the Supreme Court’s 2018 repeal of the federal ban. In the years since, Americans have placed more than half a trillion dollars in legal sports bets, according to Federal Reserve Bank of New York research. Fewer regulatory barriers and the convenience of smartphone apps have made placing a bet as easy as ordering takeout, per CNBC.
But that accessibility comes with a cost.
A new Federal Reserve Bank of New York Liberty Street Economics report finds that sports betting is quietly damaging Americans’ financial health. “Following the legalization of sports betting in a state, credit delinquencies increase, driven by those under 40 years old,” the report states. In counties where sports gambling has been legalized, credit delinquency rates have risen by 0.3 percentage points overall — and the share of credit card payments at least 90 days past due climbed 7.9 percent among adults under 40 after betting was legalized in their states.
The damage runs deeper in places where mobile betting is permitted. Residents in states with internet or app-based wagering saw their credit scores drop three times more than those in states that restricted betting to physical retail locations, according to the UCLA Anderson Review.
The financial strain extends beyond missed payments. Researchers at UCLA’s Anderson School of Management and USC’s Marshall School of Business found that the likelihood of bankruptcy filings in states with legal sports betting rose by as much as 25 to 30 percent.
“Most Americans have precious little margin for error when it comes to their finances,” said Matt Schulz, chief credit analyst at LendingTree. “While sports gambling can help when you win, the truth is that it is far more likely to hurt more than it helps in the long run.”
For those who do choose to bet, financial experts recommend setting a firm budget before placing any wagers, tracking total monthly sportsbook deposits, and — critically — never funding bets with a credit card.
