Advertisements for sports betting apps are visible in downtown Kansas City, Mo.
Online sports betting is at an all-time high, with Americans expected to legally wager billions on this year’s March Madness. But growing research finds the boom is tied to worsening personal finances for many bettors.
A recent New York Fed report found that in the more than 30 states where sports betting is legal — and in neighboring counties where it is not — credit delinquencies rose after legalization. Overall delinquency rates, driven mainly by missed credit card and auto loan payments, increased about 0.3% in states that legalized sports betting, even though only roughly 3% of residents became legal sports bettors. Focusing only on the people who began betting after legalization, delinquencies jumped more than 10% among that group. (Credit delinquency is defined as payments at least 90 days past due.)
The industry has surged since a 2018 Supreme Court decision cleared the way for states to authorize sports gambling, and mobile apps have made placing bets vastly more accessible. For March Madness alone, the American Gaming Association estimated Americans will legally wager about $3.3 billion — a more than 50% increase over three years.
The Fed found that since the pandemic bettors more than doubled quarterly spending, from under $500 in December 2019 to over $1,000 by June 2021. That increase was driven largely by mobile apps and aggressive marketing by online gambling companies.
A 2025 study co-authored by Brett Hollenbeck of UCLA Anderson reported similar harms. It found average credit scores in states that legalized sports betting dipped about 0.8 points and that consumer financial health worsened over time: higher delinquencies, more debt sent to collections, increased use of debt consolidation loans, and more auto loan delinquencies. Where online betting was allowed, the study found a roughly 10% increase in the likelihood of bankruptcy and an 8% increase in debt collections — effects that tended to appear about two years after legalization.
The gaming industry acknowledges gambling can be addictive and the American Gaming Association has launched a responsible-gaming awareness initiative. The AGA also says overall sports betting advertising spending and volume have declined in recent years and opposes federal regulation, arguing it would infringe on state authority.
But critics note a conflict of interest: states often reap tax revenue from legalized gambling even as a small share of heavy users generate most profits. A Wall Street Journal report found that one online gambling company earned 70% of its profits from less than 1% of users, underscoring how addiction can underpin industry revenues.
Addiction specialists warn the shift to online sports betting has changed the landscape. Christopher Welsh, an addiction psychiatrist at the University of Maryland School of Medicine, says calls about gambling problems are now dominated by online sports betting. Most users won’t develop problematic gambling, he says, but those predisposed to addiction can quickly make risky financial choices that lead to mounting debt. Young people appear especially vulnerable; flashy ads featuring celebrities and promises of easy wins attract younger audiences, and the Fed study found the steepest increases in delinquencies among people under 40.
Parents and families increasingly report being blindsided: relatives discover that a college-age or even high-school-aged family member has accumulated large gambling debts. Even when bettors lack funds, many seek money from other sources to continue gambling, which accelerates financial deterioration.
Taken together, recent research suggests that the expansion of legal, particularly online, sports betting has measurable negative effects on consumer financial health in jurisdictions where it’s available. Policymakers and public-health experts say these harms — from rising delinquencies to higher bankruptcy risk for some — warrant attention alongside industry claims about regulated markets and responsible-gaming efforts.