Using data from roughly 7 million U.S. consumers obtained from the University of California Consumer Credit Panel, the researchers evaluated two treatment effects: the presence of any legal sports betting in a state and the specific presence of online or mobile access to betting. They found that overall consumers' financial health is modestly deteriorating as the average credit score in states that legalize sports gambling decreases by roughly 0.3%. The decline in credit score is associated with changes in indicators of excessive debt. They found a substantial increase in average bankruptcy rates, debt sent to collections, use of debt consolidation loans, and auto loan delinquencies. The scientists also observed that financial institutions respond to the reduced creditworthiness of consumers by restricting access to credit. These results are substantially stronger for states that allow online sports gambling compared to states that limit access to in-person betting. Together, the scientists say, these results indicate that the ease of access to sports gambling is harming consumer financial health by increasing their level of debt.
Sports betting can have severe and far-reaching financial effects on individuals. One of the most immediate consequences is the depletion of personal savings. Money that might have been set aside for emergencies, retirement, or other financial goals can quickly disappear as betting takes precedence. This reduction in savings can make it challenging to cope with unexpected expenses, such as medical bills or car repairs, and can hinder the achievement of long-term financial objectives.
The diversion of funds toward betting can also lead to missed financial obligations. Regular expenses, such as rent, utilities, and loan payments, might be neglected as more money is funneled into betting activities. This can result in late payments and the accrual of penalties, which can further strain financial resources. Over time, these missed payments can negatively impact one's credit score, making it more difficult to obtain loans, mortgages, or credit cards in the future. A poor credit score can also lead to higher interest rates on any credit that is granted, increasing the overall cost of borrowing.
Beyond the immediate financial strain, the long-term impact of sports betting on personal finances can be significant. The cycle of betting and losing often leads to mounting consumer debt. As losses accumulate, individuals might resort to borrowing money to continue betting or to cover living expenses that their betting habit has compromised. This can lead to a reliance on high-interest credit cards, payday loans, or other forms of debt, which can quickly spiral out of control. The interest and fees associated with these debts can add up, making it even more challenging to escape the cycle of debt.
In addition to the financial strain, the stress and anxiety caused by mounting debt can have profound effects on one's overall well-being. The pressure to repay debts and the fear of financial instability can lead to mental health issues, such as anxiety and depression. This emotional burden can affect all aspects of life, including personal relationships and job performance, further compounding the financial challenges.
The financial impact of sports betting is not limited to the individual bettor. Families can also suffer as a result of one member's betting habits. The diversion of household funds toward betting can affect the entire family's financial stability, leading to difficulties in meeting basic needs, such as food, clothing, and housing. Children, in particular, can be negatively impacted by the financial instability caused by a parent's betting habit, potentially affecting their education and overall well-being.
In some cases, the financial strain caused by sports betting can lead individuals to engage in unethical or illegal activities to obtain money. This might include stealing from family members, friends, or employers, or engaging in fraudulent activities. Such actions can have serious legal consequences, further exacerbating the individual's financial and personal troubles.
The broader economic impact of sports betting should also be considered. As more individuals experience financial difficulties due to betting, the strain on social services and charitable organizations can increase. These entities might see a rise in demand for financial assistance, counseling, and other support services. The economic burden of problem gambling can extend to healthcare systems as well, as individuals seek treatment for gambling addiction and related mental health issues.
It is essential for individuals to recognize the risks associated with sports betting and to approach it with caution. Setting strict limits on betting activities, both in terms of time and money, can help mitigate the potential for financial harm. Seeking support from friends, family, or professional counselors can also be beneficial for those who find themselves struggling with the consequences of sports betting.
In summary, the impact of sports betting on personal finances is extensive and multifaceted. From the depletion of savings to the accumulation of debt and the strain on mental health, the consequences can be severe. Recognizing these risks and taking proactive steps to manage betting activities can help individuals avoid the pitfalls associated with sports betting and maintain financial stability.
Our Betbreak workbook and self-study guide will help you take a break from sports betting and eliminate gambling debt today.
