A recent article from the Oklahoma Voice draws on various studies to examine the link between the growing legal sports betting industry in the U.S. and higher debt, lower savings, and lower credit scores.
A research paper published in the summer, titled “The Financial Consequences of Legal Sports Gambling,” found a link between gambling legalization and poor financial health, after examining the credit bureau data of more than four million American consumers.
While the paper did not provide potential solutions to the issue, the researchers warned that “if no action is taken, it is highly likely that the large increase in sports betting will lead to a long-term increase in financial stress on many consumers and policymakers, and financial regulators should be prepared for this.”
Problem gambling is almost twice as high among sports bettors compared with other gamblers, according to a report from the National Council on Problem Gambling (NCPG). Another paper published in July also found that sports betting drained household finances more than other types of gambling.
Convenience at a cost
Today, U.S. bettors can wager on their favorite sports from pretty much anywhere that they have an internet connection. Of course, this prompts heightened concern about problem gambling and the potential financial fallout.
The American Gaming Association (AGA) reported that Americans bet more than $121 billion through online and retail sportsbooks last year, up from $93.7 billion in 2022.
The company’s VP of Research, David Forman, said part of this “is due to expansion into new markets that we didn’t have last year.”
The positives of legal sports betting
Sports betting supporters from across the U.S. highlight the additional tax revenue brought in by this type of wagering. For instance, New York’s latest betting results revealed that the state’s online sportsbooks have collected more than $965 million in tax revenue this year so far. The Empire State has one of the highest sports betting tax rates in the U.S. at 51%.
In its push for Missouri sports betting, the Winning for Missouri Education coalition cited the economic benefits that legalization is expected to bring for the state’s schools and teachers. Amendment 2 just passed by 2,961 votes. Now, sports betting is legal in 39 states and Washington, D.C.
Additionally, legal sports betting helps deter customers from unregulated betting sites, which often lack responsible gambling tools and do not contribute to tax revenue.
“You can go to any state that has yet to have an opportunity to erect a regulatory market and see a predatory and even more pervasive offshore, digital, illegal market that’s targeting consumers in those states,” Joe Maloney, SVP of strategic communications at the AGA, said.
Maloney also noted that Americans had record holdings and mutual fund ownership in 2023, expressing doubt over claims that sports gambling harms household finances. He highlighted a study indicating that the majority of the population is not adversely affected by sports betting.
“We really can’t have any sense of the long-term impacts at this point,” lead researcher Timothy Bersak commented. “Because at least in the U.S., it’s only been around for, at most, six years.”
