Online Sports Betting Negative Effecting Personal Finances And How People Invest

The explosion of online sports betting is taking a toll on personal finances, particularly among those who are financially distressed. That’s the conclusion of a recent paper, “Gambling Away Stability: Sports Betting’s Impact on Vulnerable Households.” 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. That has put considerable sums into state coffers, but it has come at a notable personal expense to gamblers and their families. Those who participate tend to invest less and have higher debt levels. 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. 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 (for example, shifting money from betting on lotteries to betting on sports). Instead, they are “becoming more indebted to fund an addictive losing proposition.” Again, lower-income households suffer disproportionately. The bottom one-third of households by income had the largest increase in spending on sports gambling relative to income.

Source: CNBC