Thursday, March 6, 2025
March is Problem Gambling Awareness Month, and it remains unclear if Minnesota will legalize online sports betting. Research is emerging about whether players in other states are simply having fun with it or if there are troubling patterns.
Since a federal ban on sports betting was struck down by the U.S. Supreme Court in 2018, more than 30 states have legalized it, with many opening up access to online options like FanDuel.
Justin Balthrop, University of Kansas finance professor, helped lead a study into the relationship between placing sports bets online and the added financial stress for vulnerable households.
"It's extremely concerning to me to know that money is being taken from longer-term savings vehicles and put into something that is more or less guaranteed to grind down to zero over the long term, if you keep betting," he explained.
In other words, the research says sports betting isn't simply substituting for other discretionary spending. Balthrop's study found a 14% reduction in net investments among households using these apps.
Researchers are not taking a stance on these laws, but want to inform policymakers as they discuss things like adding safeguards. The Minnesota Legislature has debated the issue but has yet to get a bill across the finish line.
Balthrop said he understands the pressure legislators feel to legalize sports betting and not lose revenue to neighboring states. But as they consider the idea, he urged them to think about future scenarios -- such as the loss of personal savings pushing more people into social assistance programs or food banks.
"If that increases tenfold in the future, then those are tax monies that are going to need to be spent in the future that maybe outweigh the benefit in the short term," he continued.
Other early research indicates online sports gambling isn't creating widespread problems yet. However, Balthrop hopes for more studies that look into how friends and family are affected by excessive betting.
Meanwhile, separate findings from experts in California reveal lower credit scores and increased bankruptcy filings. Industry leaders say regulatory structures in active states prevent users from being exploited by illegal markets.
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