New Study Ties Credit Score Slump to Sports Gambling

A new study produced by the Federal Reserve Bank of New York has dug further into the credit scores – as well as delinquency rates – of people in states with sports betting regulation, looking for an impact on the metric brought about arguably by the proliferation of online sports betting.

Credit and Auto Loan Delinquency Could Be Tied to Gambling

The survey has determined that there has indeed been a correlation between the presence of online sports gambling and the subsequent drop in credit scores, with the effect spilling over to states and their counties that are within a 15-mile radius of a legal state. 

This “spillover” effect, though, is diminished after 60 miles into a non-legal online sports betting state, indicating something of how willing people are to travel across state borders in order to gamble.

Consumers in Texas, for example, are likely to travel for the purposes of placing a bet,  crossing the border with Louisiana. 

The study may have also found the most at-risk group by looking at states’ credit score data, with people under the age of 40 the most likely to have issues with auto loan and credit card delinquencies, with states that suffer from a spillover effect usually affected worse by it. 

States Affected by Spillover Get More Issues 

This, the study explains, is simply because in the regulated online sports betting states, the framework also creates the accompanying infrastructure to ensure that people are cared for in the form of treatment resources and support lines. 

Conversely, states that only see people cross state borders to gamble have people returning to a vacuum where there are no treatment resources available.