Online sports betting has exploded since a 2018 Supreme Court decision allowed states to legalize wagering, and the rise of mobile apps and heavy advertising has made placing bets easier than ever. That boom — highlighted by estimates that Americans will legally bet about $3.3 billion on this year’s March Madness, a more than 50% jump over three years — is increasingly tied to measurable harm to household finances, according to multiple recent studies.
A New York Fed report examined more than 30 states that legalized sports betting and neighboring counties that did not, and found credit delinquency rates rose after legalization. Overall delinquencies — driven primarily by missed credit card and auto loan payments — climbed about 0.3% in states that legalized sports wagering, even though only roughly 3% of residents became legal sports bettors. For the subgroup who began betting after legalization, delinquencies increased by more than 10%. (The report defines credit delinquency as payments at least 90 days past due.)
The Fed also tracked spending behavior and found that bettors more than doubled quarterly spending during the pandemic period, from under $500 in December 2019 to over $1,000 by June 2021. The report attributes much of this rise to mobile apps and aggressive marketing by online gambling companies.
Academic research has reached similar conclusions. A 2025 study co-authored by Brett Hollenbeck of UCLA Anderson found that average credit scores in states that legalized sports betting dropped about 0.8 points and that consumer financial health deteriorated over time: higher delinquencies, more debt sent to collections, greater use of debt-consolidation loans and increased auto-loan delinquencies. In places that allowed online betting, the study estimated roughly a 10% increase in the likelihood of bankruptcy and an 8% rise in debt collections, with many of those effects appearing about two years after legalization.
The gaming industry acknowledges that gambling can be addictive and has promoted responsible-gaming initiatives; the American Gaming Association says advertising spending and betting volume have fallen in recent years and resists federal regulation as an infringement on state authority. Critics, however, point to a structural conflict of interest: states collect tax revenue from legal gambling while the industry’s profits often depend heavily on a small share of high-intensity users. A Wall Street Journal analysis found one online operator earned 70% of its profits from less than 1% of users, underscoring how concentrated revenue can be among those most at risk of harm.
Clinicians who treat gambling problems say the shift to online sports betting has changed the landscape. Christopher Welsh, an addiction psychiatrist at the University of Maryland School of Medicine, reports that calls about gambling problems are now dominated by online sports bets. While most people who gamble will not develop pathological problems, those with an addiction vulnerability can rapidly make risky financial choices that lead to mounting debt. Young adults appear particularly exposed: flashy celebrity ads and promises of easy wins draw younger audiences, and the Fed study found the steepest delinquency increases among people under 40.
Families increasingly report being blindsided when a college-age or even high-school-age relative accumulates large gambling debts. Bettors often seek money from other sources to continue gambling, accelerating financial deterioration and spreading harm beyond the individual.
Taken together, the research indicates that the expansion of legal, especially online, sports betting is associated with measurable declines in consumer financial health in jurisdictions where it is available. Policymakers and public-health experts say those harms — from rising delinquencies to increased bankruptcy risk for some — deserve attention alongside industry claims that regulated markets and responsible-gaming programs can mitigate the damage.