While sports betting has put considerable sums into state coffers, it has come at a notable personal expense to gamblers and their families.
The explosion of online sports betting is taking a toll on personal finances, particularly among those who are financially distressed." The authors found that sports betting has exploded since the Supreme Court overturned a federal law prohibiting it in 2018. Since then, 38 states have legalized it and it has become a growth industry, generating more than $120 billion in total bets and $11 billion in revenue in 2023 alone.
The authors noted these negative effects were particularly noticeable among "financially constrained households." That term was not defined, but the implication is that this group typically has lower savings, lower cash levels to cover expenses, higher debt levels and lower net worth.The authors used a quarterly panel of 230,171 households in states that have legalized gambling. About 7.7% of the households made online sports bets, with a household average of $1,100 a year.
This is particularly true for financially constrained households. The higher credit card debt indicates that these households are not just shifting funds from one type of entertainment to another. Instead, they are "becoming more indebted to fund an addictive losing proposition." On the one hand, the government attitude is: These are adults, they have a right to spend their money any way they want to. And we need the money.
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