Debt due to betting: an exaggerated fear?
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17 Sep 2025 •
Reading time: 3 minutes Is online sports betting really a threat to household financial stability? While a number of studies have warned of an increased risk of debt and bankruptcies, new US research has overturned these findings.
A ground-breaking analysis by the Progressive Policy Institute
For several years now, online sports betting has been the subject of growing concern among economists and regulators. The fear is simple: these practices could lead to an explosion in personal debt, a deterioration in credit scores and, in the most serious cases, individual bankruptcies.
But a new study has challenged this prevailing view. Contrary to a series of previous studies, it states that the legalisation of sports betting does not lead to a wave of excessive debt. So should we revise our perception of the risks associated with online gambling?
The Progressive Policy Institute (PPI), a Washington-based think tank, has decided to go beyond alarmist warnings. Its researchers scrutinised the financial data of gamblers in several American states that have legalised online sports betting from 2019, including New Jersey, Pennsylvania, Michigan and Illinois.
Their findings were surprising: no significant link was established between the legalisation of sports betting and an increase in personal bankruptcies or a general decline in credit scores.
Michael Mandel, Vice President and Chief Economist of PPI:
‘Problem gambling is real, and policymakers must ensure resources and safeguards are in place. However, the data shows that for most people, sports gambling in general hasn’t caused systemic financial harm — instead, it’s boosting the economy and providing another form of entertainment for people.’
The figures show a decline: in the early adopter states, the number of bankruptcies fell by 40% between 2019 and 2024, compared with 34% nationally and 36% in the states that joined legalisation later.
On the credit side, the trend is similar. Average scores rose by 1.8%, a pace in line with the national average.
‘Sports betting is best understood as part of a broader trend in discretionary, experience-based spending — like travel, live entertainment, or cosmetic procedures,’ said Mandel. ‘Betting has become more of an experience that people get more enjoyment out of rather than other material goods.’
When figures contradict alarmist rhetoric
These results contrast sharply with another study carried out by the University of California, Los Angeles (UCLA) and the University of Southern California (USC). The latter concluded that the boom in sports betting had had a negative effect on household finances, contributing to lower credit scores and additional bankruptcies.
So who should we believe? For the PPI, previous analyses suffered from a time bias. They took into account the period of the Covid-19 pandemic and the inflationary surge that followed it, two events that weighed heavily on household finances, independently of online gambling:
‘Data from the National Council on Problem Gambling (NCPG) suggests that the intensity of sports betting rose during the pandemic and has fallen since then’
An industry under scrutiny
The PPI’s findings do not mean that sports betting is without danger. Reports are already emerging of players emptying their investment accounts to finance their bets. These cases, although in the minority, are a reminder that addiction remains a reality.
The think tank itself acknowledges that the positive results achieved by the pioneering states could also be explained by more solid financial cultures or better established regulatory frameworks. In other words, the real impact of sports betting may depend more on consumer protection than on gambling itself.
An open question for decision-makers
The publication of the PPI raises a key question: should the regulation of the sports betting market be reviewed? Some legislators, in favour of tighter restrictions, may see this study as an argument to relativise their concerns. Others, on the other hand, would point out that caution is still called for until the long-term effects are fully known.