NEW YORK — The rapid expansion of legalized sports betting across the United States is increasingly showing up in Americans’ credit profiles, with higher borrowing stress and rising delinquencies, according to a new analysis from the Federal Reserve Bank of New York.
In a study published on its Liberty Street Economics blog, New York Fed researchers said the spread of mobile sports betting since a 2018 Supreme Court decision has led to a surge in wagering activity and measurable deterioration in household financial health.
The study found that legalization of sports betting increases spending at online sportsbooks roughly tenfold, largely driven by new participants entering the market rather than heavier betting by existing users.
Additional Findings
At the same time, the researchers reported a rise in financial distress among consumers:
- Overall credit delinquency rates increased by about 0.3 percentage points in areas where sports betting became legal
- Only about 3% of the population took up betting after legalization, implying a much larger increase in distress among actual bettors
- Delinquencies were particularly pronounced among younger borrowers, especially in credit card and auto loan payments
- Credit impacts extended beyond state lines, with neighboring areas experiencing about 15% of the increase in betting activity and related financial strain
The report noted that more than 30 states have legalized mobile sports betting, generating over $500 billion in wagers nationwide since 2018.
What Researchers Also Discovered
Researchers Jacob Goss and Daniel Mangrum said the findings suggest that even a relatively small share of new bettors can have broader effects on the credit landscape. While participation rates remain limited, the associated increase in missed payments and borrowing stress is visible across the wider population.
The study also highlighted “spillover” effects, with financial strain rising even in areas where betting remains illegal, as consumers cross state lines or use digital platforms to place wagers.
“Our findings suggest that sports betting can have dramatic implications for household financial stability,” the authors wrote.
For the full study, go here.
