A new study recently revealed that the rapid growth of online sports betting in the United States is disproportionately affecting financially constrained households.
The research highlights the negative impact this booming industry has on low-income Americans.
NBC News reports that online sports betting has soared from an average of $1.1 billion per month in 2019 to $14 billion by January 2024.
This increase has contributed to higher credit card debt, lower credit scores and lower long-term investing among Americans.
Since the Supreme Court’s decision in 2018 to strike down the federal ban on sports gambling, 38 states have legalized and launched sports books, with over $120 billion wagered and $11 billion in revenue in 2023 alone.
However, this rise in gambling activity has put a strain on households already struggling with financial stability.
The study, which surveyed 230,171 households in states where sports betting is legal, found that 7.7% of respondents actively participate in sports betting, with an average annual expenditure of $1,100 per household.
Worryingly, those with higher levels of credit card debt were more likely to engage in gambling, exacerbating their financial difficulties.
The researchers observed that households in the bottom third of the income bracket experienced the greatest increase in gambling-related spending.
These households, already facing limited financial resources, now face increasing debt, reduced credit availability and a greater likelihood of bank overdrafts.
The findings pose a dilemma for policymakers. While tax revenues from the gaming industry can fund government investment, the negative impact on financially vulnerable households is undeniable.
The study warns that the growth of legalized sports gambling could undermine government initiatives aimed at promoting savings and financial literacy among low-income Americans.
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