By Michael Jonas,
CommonWealth Beacon

After sports betting was legalized, people saved less and gambled more.

This story was originally published by CommonWealth Beacon.

While political leaders and policymakers voice concerns about the large number of families living on the financial edge, often extolling the value of various government-sponsored savings plans, they have simultaneously legalized sports betting, embracing an industry that is directly undermining the goal of saving for the future.

That’s the finding of a massive new study looking at the impact of sports betting on household finances in the first six years since a 2018 US Supreme Court decision cleared the way for states to legalize gambling on sports. The study found that legalization of online sports betting has not led people to divert money from other forms of entertainment to this new sector, but has instead led them to overextend their budgets at the expense of saving money through investment accounts, especially among the most financially vulnerable households.

The study linked sports betting to “a large decrease” in deposits to brokerage accounts, accompanied by “decreased credit availability, increased credit card debt, and a higher incidence rate of overdrawing bank accounts.” In all, say the researchers, access to online sports betting “exacerbates financial difficulties faced by constrained households.”

The study defined constrained households based on lower savings rates, higher credit card debt, and a history of bank overdrafts.

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