A new report from the Progressive Policy Institute challenges the assumption that legalised sports betting leads to financial instability.
A new report from the Progressive Policy Institute (PPI) in the US challenges the assumption that legalising sports betting leads to greater financial instability.
Instead, the findings in Balancing Innovation and Risk: The Case of Legalised Sports Betting by Dr. Michael Mandel and the PPI indicate that bankruptcies have declined more steeply in states that embraced regulated sports wagering.
The analysis compared consumer bankruptcy filings between 2019 and 2024, a period that saw rapid growth in mobile sports betting.
Nationally, bankruptcies fell by 34%. However, in states that legalised online sports betting by 2021, filings dropped by 40%.
Early adopters such as New Jersey and West Virginia recorded declines of nearly 49% and 44% respectively, while the District of Columbia saw a 56% reduction.
The study also found that credit scores improved in early adopter states at roughly the same rate as the national average.
In addition, FICO (credit) scores increased by 1.8% in those states, mirroring the overall rise across the US. This suggests that widespread concerns about gambling-driven credit downgrades have not materialised at the aggregate level.
Despite consumer spending on legalised sports betting jumping from $920m in 2019 to $13.7bn in 2024, overall betting expenditure remained stable as a share of household spending, staying near 1% of personal consumption.
The report notes that while betting patterns changed, total betting outlays did not grow disproportionately.
The study concludes: “[We] make the case that legalised sports betting serves as an economic innovation that generates positive consumer benefits and costs akin to other discretionary ‘experiential’ spending categories such as foreign vacations, live entertainment, and appearance-enhancing surgery.
“We show that it’s not uncommon for consumers to take on debt to finance outlays in these areas, yet the government does not step in to control individual behavior.”
Gambling study results don’t always align
The findings, which resemble comments made by the American Gaming Association last year, juxtapose sharply with some previous studies.
One, published in 2024, claimed sports betting reduced savings and increased debt, potentially leading to 30,000 additional bankruptcies annually.
The PPI analysis suggests those conclusions may have been distorted by external economic shocks during the pandemic and the inflationary surge that followed.
Nonetheless, the report cautions against complacency. It highlights the need to address problem gambling, with surveys showing that a portion of bettors have missed bill payments or sought treatment for gambling disorders.
The onus remains on policymakers to balance innovation with consumer protection by supporting education and treatment resources.
According to the PPI, sports betting should be viewed as part of a broader trend towards discretionary “experiential” spending, akin to travel, concerts, or elective cosmetic procedures.
The study frames the policy challenge as one of pragmatism: to regulate effectively without stifling consumer choice or the economic benefits generated by a rapidly growing industry.