Here's How Much Sports Betting Can Lower Your Credit Score, According To Research

There's no denying the popularity of sports betting in America. Not only is sports betting now legal in a LOT of states, but the industry has proved itself to be extremely lucrative. In fact, according to the American Gaming Association's annual report, sports betting made $10.92 billion in revenue in 2023 alone. This revenue only serves to further fuel sports betting apps and companies like FanDuel and DraftKings, who, combined, spent almost $281 million just on television advertising in 2023.

While there has been a noticeable increase in calls to problem gambling hotlines across the country, less time has been devoted to the long-term financial implications of problem gambling trends. With that said, a recently published research paper looking at the financial consequences of gambling on sports found that sports betting was ultimately bad for consumer health. The researchers, from UCLA and USC, looked at the 38 states that have legalized sports betting and compared financial numbers between residents in those states to residents in the states without sports betting. The results show a concerning trend of increased debt and financial hardship.

It's worth noting that, since the research looked at averages, some of the numbers in the study are watered down by the amount of people who don't actually bet on sports even if they live in a state where sports betting is legal. Similarly, consumers who do bet and have experienced financial loss as a result of their sports betting are more likely to have suffered a far more extreme financial falling out than the numbers found in the study would indicate.

The research found that consumers living in states with legalized sports betting experienced a 1% decrease in their credit scores. While that might not sound that significant, it's important to realize just how much your credit score impacts, from your creditworthiness to your ability to qualify for a place to live. It's also worth noting that the paper's researchers found that online access to sports gambling was one of the most significant factors contributing to the decline in credit scores.

The financial study also found that the likelihood of bankruptcies increased by 25% to 30% in the three to four years following the legalization of online sports gambling. Bankruptcies, along with debt collections and delinquency, are all indicators of excessive debt and can be detrimental to the financial health of consumers. Alongside the rise in bankruptcies, the amount of debt that ultimately transferred to a debt collector also went up 8% for these consumers, which translated to an average increase of about $30 in collections per individual. Similarly, auto loans also saw an increase in delinquency after sports betting legalization, with a 9% increase in delinquency likelihood.

These debt increases across multiple financial avenues have led to yet another consumer financial dilemma: debt consolidation. As people attempt to tackle their mounting debts, researchers found a 10% increase in the likelihood of consumers opening a consolidation loan to try and keep up. On that note, remember that there is a LOT to know about consolidating your debt before moving forward.

Despite the bleak financial outlook for consumers post-sports betting legalization in the U.S., the trend shows no signs of slowing down. Since the Supreme Court struck down the Professional and Amateur Sports Protection Act (PASPA) in 2018, more and more states have legalized sports betting. While much of this legalization is tied to the gambling industries' purported economic benefits, the various dark sides of sports betting have instead left a wake of social and financial problems in the states that have legalized it.

On top of this, a lack of regulation has left many of the larger sportsbooks running rampant, with their ads, as well as the use of addictive algorithms that encourage higher app usage. Notably, the Ohio Casino Control Commission successfully forced Barstool Sportsbook and DraftKings in 2023 to pay $750,000 in fines for both targeting people too young to gamble and for advertising "free" bets. However, this oversight is few and far between.

Keith Whyte, the executive director of the National Council on Problem Gambling, spoke to NBC News in April 2024 about gambling hotlines and how call volume was up. "We believe, nationwide, the rate and severity of gambling problems have increased across the United States since 2018," he said. "We have every reason to believe the growth of online sports betting is a major contributing factor to the increase in gambling problems."

If you or anyone you know is struggling with problem gambling, help is available. The National Problem Gambling Helpline (1-800-GAMBLER) is available 24 hours a day. The National Council on Problem Gambling offers call, text, and chat services for those in need.