Researchers have begun to measure the impact of the legalization of sports betting on American households, and the first results paint a worrying picture regarding the effect of this measure on bettors’ finances, according to zf.ro, which quotes NBC News.
Two separate studies published this month show that households in states where sports betting has been legalized had significantly lower savings and less investment in assets like stocks, generally considered more financially sound.
Meanwhile, states that have legalized sports betting have seen their residents’ credit scores plummet, while personal bankruptcies have soared.
Online sports betting is legal in 30 US states
Online sports betting is legal in 30 states plus the District of Columbia and Puerto Rico, and the authors of one of the studies estimate that total monthly wagers rose from an average of $1.1 billion per month in 2019 to $14 billion in January 2024 But there is a clear cost, the study authors point out.
Using datasets showing deposits and withdrawals to and from online sports betting platforms such as FanDuel and DraftKings, as well as from accounts at stock brokerage firms such as Charles Schwab, E-Trade, Vanguard and Fidelity, the study authors found that legalization led to growing credit card balances, less access to credit, a reduction in longer-term and higher-yielding investments, the effects being more pronounced among households with a more precarious financial situation.
The researchers also found that, compared to states that did not implement sports betting, states that did saw their credit scores drop, while bankruptcies increased by 28 percent.
Sports betting, a cash cow
“Although many consumers enjoy the legalization of betting, and states stand to gain in the form of additional tax revenues, there are fears that the legalization of sports betting and the ease with which consumers can now bet online is affecting the financial health of consumers,” states one of studies.
In the meantime, the states benefit greatly from the decision to legalize sports betting. New York, for example, received $862 million last year in business tax revenue and over $2 billion in the past three years.
And they continue to see betting as a cash cow. Many are now introducing legislation to take advantage of the sector’s growth.
Source: www.descopera.ro
