Are Americans Betting Their Future on Sports? Uncover the Surprising Stats | Global News Avenue

Since the 2018 U.S. Supreme Court ruling legalizing sports betting Nationally, the pastime has taken the U.S. by storm, fueling the rapid expansion of online and in-person sports betting and spurring growth in a nascent industry.

Billions of dollars are being invested every year to reshape how people spend, save and invest – though not always for the better. While states benefit from new revenue streams, the social and financial costs of gambling continue to increase. From reduced savings to increased debt Bankruptcy rate, and its impact is becoming increasingly apparent.

How much are Americans losing from sports betting?

Americans have bet nearly $450 billion on sports since the Supreme Court struck down federal laws banning sports gambling in 2018. This decision is right sports betting Operators – including market leaders FanDuel and DraftKings–The company has generated nearly $40 billion in revenue in the 38 states where sports betting is now legal, according to the Legal Sports Report.

Those revenues have been growing rapidly as more Americans place bets. Preliminary reports show that in 2024 alone, operators booked more than $14.2 billion after paying bettors’ bonuses, a 29% increase from 2023. So what does this mean for people placing bets?

Scott Baker, an associate professor of finance at the Kellogg School of Management, told Investopedia that these revenues are “essentially operator revenues.” In other words, “This is almost equivalent to the operator’s revenue.” net loss “For Americans,” he said. A research team led by Baker found in their working paper that by the end of 2023, nearly 8% of households were involved in gambling. These bettors spend an average of $1,100 per year on online betting.

Researchers analyzed millions of financial transactions from hundreds of thousands of U.S. households and found that as people put more money into sports betting, their savings and invest The decline was “significant.” For example, in states that legalized sports betting, households’ net investments fell by about 14% on average, meaning that for every $1 households spent on sports betting, they had $2 less invested in their investment accounts.

“For some people who are susceptible to addiction from this, the impact is very bad and I think it’s going to cause a lot of hardship for some of these families,” Baker said.

The data also shows differences in how consumers spend their money. Researchers found that increased sports betting opportunities increased spending on cable TV, restaurants and other forms of entertainment, as well as the opportunity to participate in sports betting. lottery game.

“If you start sports betting, you start watching more sports, you might go to sports bars more,” Baker explained. “This suggests that sports betting does not necessarily offset these other activities but rather amplifies them.”

How does sports betting affect debt and bankruptcy?

Legalizing sports betting is not only changing consumers’ spending habits, it’s also impacting their financial health. Research Led by Brett Hollenbeck of UCLA Anderson School of Management. Hollenbeck and his colleagues concluded in their working paper that overall, consumers’ financial health “slightly worsens” in states that have legalized sports betting.

Within four years of a state legalizing online sports betting, Hollenbeck and team found: credit score With an average decrease of 1%, debt collection amounts jumped 8% and bankruptcy filings jumped 28% – which means approximately 30,000 new bankruptcies are filed each year.

“By reducing friction, people may bet more than they normally would, and they may make worse decisions,” Hollenbeck explains.

What are the benefits of sports betting?

Despite growing concerns about gambling addiction and financial stress among bettors, the rapid popularity of sports betting has brought economic benefits to states where it is legal. States received more than $1.8 billion from tax Sports Betting in 2023 – Helping fund infrastructure projects, education, and even counseling on problem gambling.

Industry leaders have also taken steps to address the challenges. Major gaming companies including Bally’s, FanDuel and DraftKings have joined forces to form Responsible Online Gaming Associationcommitting more than $20 million to promote responsible gambling initiatives.

bottom line

The growing legalization of sports betting has helped states and operators earn billions of dollars, but the cost to Americans’ financial health has become increasingly clear over time. Study shows disturbing rise debt, bankruptcyand reduce bettors’ investments.

The challenge as states navigate this booming industry is balancing tax windfalls with rising social costs. On the other hand, bettors should approach this high-risk pastime with caution to avoid long-term financial consequences.

“Sports betting is still booming, so it remains to be seen whether people will lose a bunch of money and then quit, or whether they actually fall into some bad patterns,” Baker concluded. “But it’s clear that gambling often makes some People get the best – maybe because they don’t Know the odds Or exactly how much it cost them. “