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NFL Season Begins Amid Concerns Over Financial Impact of Legal Sports Betting

As the NFL season kicks off Thursday night with a much-anticipated rematch of last year’s AFC Championship Game between the Baltimore Ravens and the Kansas City Chiefs, the spotlight is not only on Patrick Mahomes and his quest for a fourth Super Bowl victory but also on the millions of Americans engaging in sports betting. The start of the NFL season coincides with the busiest time of year for the sports betting industry, a game-within-the-game that has seen explosive growth since the 2018 US Supreme Court decision that legalized sports betting across the country.

A Record-Breaking Year for Sports Betting

Since that landmark decision, over $300 billion has been wagered on sports, with $120 billion in 2023 alone—a figure that 2024 is set to surpass. The NFL season is widely considered the marquee event for sports betting in the United States, with more than 70 million Americans expected to participate this year. As of now, 38 states and the District of Columbia have legalized sports betting, with most wagers placed via smartphone apps operated by industry giants like DraftKings and FanDuel.

Despite the rapid expansion of legal sports gambling (LSG), questions about its financial and social impacts are surfacing, particularly with the release of new studies examining the consequences of widespread, app-based betting. These studies challenge the idea that legalized sports betting is a safer, more regulated alternative to illegal gambling.

Financial Impact of Legalized Sports Betting

New research is shedding light on the financial consequences of LSG, especially in the context of mobile and online betting. One key study, The Financial Consequences of Legalized Sports Gambling by Brett Hollenbeck, Poet Larsen, and Davide Proserpio, analyzed the financial health of seven million individuals in states with legal mobile sports betting. Their findings revealed that:

  • Credit scores worsened by up to 1% on average.
  • The odds of bankruptcy increased by 25% to 30% after four years.
  • Collections of unpaid debts rose by 8%.

These figures indicate a significant link between online access to sports betting and a rise in financial distress. The study also noted that lenders proactively reduced credit card limits to minimize their exposure to the financial risks posed by LSG.

Another study, Gambling Away Stability, observed that for every $1 bet on sports, net investment into traditional brokerage accounts decreased by more than $2, with financially constrained households depositing a larger portion of their income into betting. These studies highlight the disproportionate burden that LSG places on low-income and young male bettors, making it even harder for these groups to build wealth and maintain financial stability.

The Hidden Costs of Easy Access

While LSG was initially pitched as a way to combat illegal gambling and generate state revenue, the social costs are becoming increasingly evident. The studies underscore how online sports betting, in particular, makes it easier for individuals to gamble without accountability. The absence of interpersonal scrutiny and the ease with which bettors can top up accounts via smartphones make it harder for gamblers to track their losses until it’s too late.

Digital platforms also intensify these effects. One interviewee shared how they found it difficult to sit through family events without sneaking off to place bets, even resorting to placing wagers while in the shower. The barrage of advertisements, promos, and free plays from betting companies keeps customers engaged, while mobile betting apps offer frictionless access, amplifying the financial strain on bettors.

A Need for Responsible Regulation

With 38 states already embracing LSG, more are likely to follow, despite the rising evidence of its negative consequences. The financial benefits to states may not be as significant as initially thought. For instance, while New York expects to generate $2 billion from gambling revenues for education over two years, this pales in comparison to the state’s $30 billion annual spending on public schools.

States like New Jersey, Connecticut, and Massachusetts are already investing more in problem gambling services, with New York lagging behind at just $0.50 per resident. As more data becomes available, it’s clear that while LSG may provide a revenue boost, the social and financial costs—especially for vulnerable groups—are still coming into focus.

As NFL fans place their bets this season, it’s important to recognize the hidden costs of legal sports betting. The ease of access through mobile apps makes it particularly dangerous for young men and financially constrained households, while the broader societal impacts continue to unfold. Though sports betting has created new opportunities for revenue, the financial well-being of millions of Americans may be at risk without stronger regulation and consumer protections.

For those struggling with problem gambling, help is available. In the US, contact the National Council on Problem Gambling at 800-GAMBLER or text 800GAM. In the UK, support is available via the NHS National Problem Gambling Clinic on 020 7381 7722 or GamCare on 0808 8020 133. In Australia, Gambling Help Online is available on 1800 858 858.

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