No Sports Betting Won’t Bankrupt You or Tank Your Credit Score, Survey Says

Over the past year, researchers have sounded a cautious alarm that gambling with online sportsbooks could be driving people into debt, lowering their credit score, and increasing the likelihood of bankruptcy.

New Research Assails Claim That Bankruptcies Linked to Sports Gambling

The Progressive Policy Institute (PPI) has decided to take matters into its own hands and put those claims to a further test by looking at the credit score and financial status of people who gamble on sportsbooks online.

The research did not find any significant evidence to back the claim that legalization of online sports betting had indeed led to the feared widespread occurrence of personal bankruptcies or significant credit score reduction.

Analyzing data between 2019 and 2024, the PPI concluded that there had been no significant increase in the above-stated events. The PPI took a look at some of the earliest and most populous adopters of online sports gambling, among which are New Jersey, Pennsylvania, Michigan, Illinois, and others.

It may be even argued that states that adopted sports gambling actually saw a decrease in personal bankruptcies, with a 40% decline in such events in early-adopter states compared to 34% nationally, and 36% in all states that adopted online sports gambling.

Credit scores also rose in those early-adopter sports betting states by 1.8%, in line with the national average. The PPI’s research does seem to be favoring the industry at first blush, but it’s an analytical look into how sports gambling is affecting personal finances.

Current and Previous Research Tends to Be a Little Biased

The recent research also cites a previously released survey by the University of California, Los Angeles (UCLA) and the University of Southern California (USC), which similarly released a study in which they argued that the opposite is true – i.e., that online sportsbooks have led to a dip in credit scores, and have pushed more consumers into bankruptcies.

However, the PPI notes that the survey covers a fairly unstable period, including inflation spikes and the coronavirus pandemic that preceded it.

“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,” the PPI further noted, with sports gambling subsiding in the wake of the pandemic re-opening.

The PPI reminded that early adopter states showed a reverse trend – fewer consumer bankruptcies, but then again, this could be attributed to a better overall financial culture and laws in those states. Both studies have looked at data that could be attributable to sports betting, but then again, this does not paint the full picture either.

Yet, there have already been reports of gamblers divesting or liquidating their investment accounts to sustain their sports betting habits. Those could be the exceptions, though, and not the norm.