Over the weekend, millions of Americans watched football. They cheered, they ate, and—more than ever—they gambled. The American Gaming Association
expects $35 billion in bets to be placed on NFL games in 2024, about one-third more than last year's total.
If you follow sports, gambling is everywhere. Ads for it are all over broadcasts; more than one in three Americans now
bets on sports, according to a Seton Hall poll. Before 2018, sports gambling was prohibited almost everywhere. Now
it's legal in 38 states and the District of Columbia,
yielding $10 billion a year in revenue.
Readers may be quick to dismiss these developments as harmless. Many sports fans enjoy betting on the game, they say. Is it such a big deal if they do it with a company rather than their friends?
A growing body of social-science literature suggests that, yes, this is in fact quite different. The rise of sports gambling has caused a wave of financial and familial misery, one that falls disproportionately on the most economically precarious households. Six years into the experiment, the evidence is convincing: Legalizing sports gambling was a huge mistake.[/qupte]
Alarming patterns have started to emerge. Two recent working papers look at the economic impacts of legalization.
One, by Northwestern University's Scott Baker and colleagues, finds that legal sports gambling depletes households' savings. Specifically, for every $1 spent on betting, households put $2 less into investment accounts. States see big increases in the risk of overdrafting a bank account or maxing out a credit card. These effects are strongest among already precarious households.
A
second paper, from the economists Brett Hollenbeck of UCLA and Poet Larsen and Davide Proserpio of the University of Southern California, tells a similar story. Looking specifically at
online sports gambling, they find that legalization increases the risk that a household goes bankrupt by 25 to 30 percent, and increases debt delinquency. These problems seem to concentrate among young men living in low-income counties—further evidence that those most hurt by sports gambling are the least well-off.
A third
recent paper, from the University of Oregon economists Kyutaro Matsuzawa and Emily Arnesen, shows another, perhaps more surprising—and certainly more harrowing—harm of gambling legalization: domestic violence.
Earlier research found that an NFL home team's upset loss causes a 10 percent increase in reported incidents of men being violent toward their partner. Matsuzawa and Arnesen extend this, finding that in states where sports betting is legal, the effect is even bigger. They estimate that legal sports betting leads to a roughly 9 percent increase in intimate-partner violence.
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