Online sports betting has grown in popularity in recent years from Harlem to Hollywood, as it’s become legal in 38 states across the U.S., plus Puerto Rico and Washington D.C.
While it may seem like fun and games, there are also significant financial consequences attached to the habit.
But are there safe ways to gamble? We dove into recent research and reached out to experts in the field to learn more about how sports betting can affect consumers’ finances.
What are the financial risks?
Researchers across the country have recently started diving into the topic, exploring how consumers’ gambling habits affect their personal finances.
The consensus: it’s not the best.
“… states that have legalized sports betting have an increase in debt (s) …”
Studies have shown that, since becoming legal in 2018, consumers in states that have legalized sports betting have an increase in debt collections, debt consolidation loans, auto loan delinquencies, bankruptcy rates, overdraft rates, and more.
Experts also have found that consumers have been saving less and overall, credit scores have taken a dip. On top of that, financial institutions have lowered the available credit limits for many consumers who have a history of spending issues.
“… results seem to be particularly pronounced when states legalize online betting …”
“Overall, we find that the legalization of sports gambling decreased consumer financial health,” wrote the authors of one such paper. “These results seem to be particularly pronounced when states legalize online betting, suggesting that the ease of access to gambling increases the problems associated with it.
“… young men, particularly those in low-income counties, are most affected.”
“Moreover, we find that young men, particularly those in low-income counties, are most affected.”
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Are there safe ways to gamble?
While it can be easy to get carried away with sports betting, are there safe ways for consumers to participate without risking their financial health? Some experts in the field say that with the right limits in place, there can be safe ways to gamble.
“Before diving into sports betting, consumers should be aware of the potential financial negatives,” Robert Kraft, CEO and cofounder of Atlas World Sports, told ConsumerAffairs.
“It’s important to set a strict budget and stick to it, avoiding the temptation to chase losses. Understanding the odds and doing thorough research can mitigate risks, but it never guarantees wins.”
Alexander Korsager, chief gambling officer at casino.org, had similar advice about setting a budget as a safeguard.
“Your gambling budget should be an amount you are comfortable losing …”
“There’s nothing wrong with being a recreational bettor, but you have to factor it into your budget, as you would for any other form of entertainment,” he told ConsumerAffairs. “Your gambling budget should be an amount you are comfortable losing and can afford without any financial impact.”
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