Sports Betting Apps Take $1,100 Per Year From Household Savings

A new report from Investopedia shows that Americans are gambling away their nest eggs with sports betting apps. In the six years since the U.S. Supreme Court struck down restrictions on sports betting, more than $450 billion has been wagered using sports betting apps. Much of that money has been wagered at the expense of home equity, household savings and retirement accounts.
Scott Baker, a professor at the Kellogg School of Management, has conducted fascinating research into household expenditures and how they are impacted by such things as cryptocurrency and stimulus checks. Baker shared with Investopedia some of the findings from new research on sports betting in America:
- 8% of U.S. households were involved in sports betting by the end of 2023
- They spent $1,100 per year, on average, per household on sports betting
- Savings and investing declined dramatically in states where sports betting became legal
- Investments declined by an average of 14% per household involved in sports betting
Investopedia also spoke with Brett Hollenbeck, a marketing professor at the UCLA Anderson School of Management, who has conducted research on such things as how fake Amazon reviews influence consumer behavior. Hollenbeck is also the co-author of a working paper entitled The Financial Consequences of Legalized Sports Gambling. Hollenbeck’s study covered from 2018-2022 and found that legalization of sports betting led to the following results:
- 1% decrease in average credit scores
- 8% increase in debt collection actions
- 28% increase in bankruptcy filings
The fact that many states still restrict access to online gambling allows Hollenbeck and his colleagues to have control statistics to compare with the states that allow sports betting apps. For example, the decline in average credit scores was three times as large in states with legal sports betting. The authors conclude:
[T]he ease of access to sports gambling is harming consumer financial health by increasing their level of debt.
Legalizing sports gambling has had knock-on effects beyond the losses being racked up by gambling households. According to Baker’s research, gambling households also spend more money on cable TV, likely due to watching more sports. They also go to restaurants and bars more, possibly to watch sports and to be around other gamblers. And they play the lottery more. It’s likely that the compulsion to gamble results in a higher tendency for substance use disorders.
What is being done about the problems caused by easy access to sports betting apps? Almost nothing. The states that have legalized sports betting apps are raking in major revenue from gambling taxes. The states have essentially become partners in pillaging the savings of their own citizens. Do the citizens want this? No! A 2022 ballot measure in California to legalize mobile gambling failed to get 20% voter approval.
There are only 13 states that do not allow sports betting: Alabama, Alaska, California, Georgia, Hawaii, Idaho, Minnesota, Missouri, Oklahoma, South Carolina, Texas, and Utah. The SAFE Bet Act, a bill that would have put restrictions on sports betting, died with the end of the 118th Congress on December 31, 2024. It is not known whether it will be revived in the new Congress.
New York’s state legislature is considering a bill that would raise the age for “participation in fantasy sports contests” from 18 to 21. That’s it? Where are the restrictions on advertising these dangerous apps? Where are the restrictions against predatory behavior by sports betting companies hounding compulsive gamblers? Where are the reimbursements to families who blow through a lifetime of savings in a matter of weeks?
The future for average Americans looks grim, with artificial intelligence poised to take their jobs and gambling syndicates working to siphon off what’s left of their wealth: their cars, their savings, and their homes. The people charged with protecting us from this predatory behavior are instead partners in it, state governments whose coffers swell when sports books do well.
For the time being, it’s caveat aleator — gambler beware — as companies profit from victimizing their patrons and governments that profit from the scheme appear reluctant to restrain it. The National Council on Problem Gambling operates a hotline at 1-800-522-4700 and a website at NCPGambling.org. Other than that, AddictionNews offers a rich library of articles on gambling addiction, gaming addiction and internet addiction.
Written by Steve O’Keefe. First published January 15, 2025.
Sources:
“Are Americans Betting Their Future on Sports? Uncover the Surprising Stats,” Investopedia, January 10, 2025.
“Online Sports Betting: Bill Tracker for States with Legal Sports Betting,” Legal Sports Report, January 3, 2025
“Sports Betting Laws by State,” Investopedia, January 4, 2025.
“Sports Betting App Revenue and Usage Statistics (2024),” Business of Apps, September 30, 2024.
The Financial Consequences of Legalized Sports Gambling, Working Paper, July 2024.
“The relationship between substance use disorder and gambling disorder: A nationwide longitudinal health registry study,” Scandinavian Journal of Public Health, September 30, 2021.
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