How Sports Betting Is Taking Over Young Mens’ Time, And Finances

Sports betting has grown into a multibillion-dollar industry. It’s also become a drag on many Americans, especially young men, according to recent research. 

Bankruptcies surged and credit scores dropped in states where sports betting was legalized in a 2018 Supreme Court ruling, one study found. Another indicated money that might have been invested was gambled instead. A third found young men were devoting hours to gambling each day at the expense of work and education. 

“Howard,” a North Carolina man in his mid-20s, told Investopedia he lost as much as $40,000 on sports betting annually over the seven years that ended in October, when he joined Gamblers Anonymous and quit. (He detailed his experience on the condition that his real name not be used.)

By the time Howard got to college, he said, betting apps meant that he could make wagers any time, anywhere, and he frequently gambled away his financial aid payments and paychecks. 

“Every time I got paid biweekly, all of it immediately got dumped into a gambling site,” said Howard. “I would be working from noon till 9 p.m. Sometimes it would be gone by 9 p.m.”

Tax Revenue Rolls In, But Finances Are At Stake

Since the 2018 ruling, 30 states have allowed online gambling, prompting an explosion in the sector. (At least nine other states have taken up gambling expansion bills in recent years.) Companies like DraftKings, FanDuel and Bet365 have made betting easy, and as of December, gamblers had placed nearly $500 billion in bets since the ruling, with the amount increasing every year according to Sportsbook Review, a betting website.

Betting has benefits. They include entertainment value—many gamble as a low-cost pastime—and tax revenue for the states that allow it, amounting to $1.8 billion in 2023, according to the nonpartisan Tax Foundation, a think tank. However, research also suggests a range of social and financial costs that some say should be considered along with the appeal of fresh revenue.

Studies suggest that much of the money being gambled comes from households that can hardly afford it. Bankruptcies rose 25% to 30% more in states that legalized online gambling than in those where gambling was illegal, according to Brett Hollenbeck, a professor of management at the University of California, Los Angeles, who led a study analyzing a survey of the finances of 7 million Americans. 

Average credit scores fell 1% further in gambling states than in non-gambling states, Hollenbeck’s research found, while debt collections increased 8%. Financially vulnerable households were hit hardest, with larger increases in credit card debt and bank account overdrafts and decreased credit-card payments in gambling states.

Many forego investment and retirement savings to fund the hobby, according to a study published last year by Scott R. Baker, a professor of economics at Northwestern University. After analyzing financial transaction data from more than 200,000 households, Baker found that people who put money into online sports betting accounts reduced their investing by an average of 14%.

Does The New American Pastime Have ‘Unintended Consequences?’

Gambling is costly in terms of time, too, according to a study by Owen Fleming, a doctoral candidate at Wayne State University who analyzed data from the Bureau of Labor Statistics’ American Time Use Survey. The survey asks 26,000 people each year to detail how they spend their days.

Fleming and his colleagues compared how people’s time use changed in states that legalized online sports and in those that didn’t. In sports betting states, people ramped up their leisure time and spent less time on housekeeping and grooming, his research suggested.

The effects were more striking among younger men (aged 18 to 25) in gambling states, who started spending almost two extra hours a day on leisure—mainly watching TV and socializing—at the expense of education and work. (That figure includes the entire population and suggests a larger redirection of time among gamblers specifically.)

A Fairleigh Dickinson survey of voters in September found that 10% of men aged 18-30 reported behaviors that would mark them as problem gamblers based on the Problem Gambling Severity Index, a questionnaire widely used by researchers. In the overall population, that number is closer to 3%.

To Fleming and others who have studied the issue, the research suggests trade-offs that lawmakers should consider when deciding whether to legalize gambling in their states. Sports betting raises tax revenue that’s hard to come by elsewhere and can be an enjoyable pastime. But it appears to be sucking up money and time from young men, with unknown long-term consequences. 

On the plus side, people living in sports betting legal states reported better mental health than those who did not. Fleming speculated that’s because gambling was more enjoyable than work or school, at least in the short term. His paper and the others mentioned in this story are working papers that have not yet gone through the peer review process.

“A lot of young men are spending less time doing productive things like education and work,” Fleming said. “It’s unclear if that will have rippling effects to where it actually makes these policies a net negative for tax revenue, but it’s just something that policymakers should consider: the unintended consequences.”

A Syringe That’s ‘Loaded and In Your Pocket’

Sports betting companies argue that their industry is no more financially destructive than other leisure activities that divert time and money.

“Common sense could tell you that every dollar of discretionary income spent could be singled out by any academic study as some dollar crowding out of savings for retirement or for whatever else,” Joe Maloney, senior vice president of strategic communications at the American Gaming Association, a trade group representing sports betting companies, told Investopedia in an interview.

Maloney said legalized sports betting provided a better alternative than illegal gambling that took place before the law was changed. He also said it didn’t make sense to single out online sports gambling from other newly popular activities that people spend time and money on, like pickleball.

Maloney cited research showing legalizing mobile sports betting had no discernible effect on mental or financial health in the population at large: A 2024 study by Tim Bersak, a professor of economics at Wofford College, found that surveys by the Census showed no increase in financial hardship or mental distress in states that legalized online sports betting compared to those that didn’t.

The industry has taken steps to mitigate the damage from serious gambling addiction. Users of the popular sports gambling platforms can set monetary limits or even ban themselves from the apps. Gaming operations also help advertise the 1-800-GAMBLER addiction hotline.

But like many problem gamblers, Howard didn’t get help until a lot of damage had been done. He blames his gambling habit for the destruction of his finances, his dropping out of college, the collapse of romantic relationships, and the repossession of his car. He recalls routinely falling asleep watching games, then waking up the next day, checking scores on his phone—and then watching more games at work.  

“Drug addicts have to go out and get a syringe or something like that,” Howard said. “For gamblers, the syringe is loaded and in your pocket.”