Online Betting Could Be Fueling Bankruptcies, Experts Warn

Bankruptcy attorneys have warned that online betting could be causing an increase in personal bankruptcies and said that people gambling with borrowed money are at an especially high risk of harm.

USA Reported an Increase in Personal Bankruptcies

Online betting has taken America by storm, with a few states launching online casinos, too. As the gaming sector continues to grow, critics remain wary of its effect on the broader society. One growing concern is the financial harm that it can cause to people suffering from addiction.

The concerns increased several years ago when the US government reported that non-business bankruptcies had increased by 11.9% year-on-year, with some 565,890 reported for the fiscal year 2025-26.

While the overall rise in bankruptcy filings is caused by a variety of economic factors, some say that online sports betting has played a significant role.

Experts Expect the Situation to Worsen

Florida bankruptcy attorney Chad Van Horn spoke with Business Insider on the matter, saying that online gaming does seem to have a negative effect on vulnerable people, especially younger men, who are deemed to be a riskier audience.

Poet Larsen, who has been researching the matter, said that people harmed by betting are often people who were already struggling financially even before online betting was legalized in their state.

To make matters worse, many of the riskier players do not gamble with cash but with borrowed money. Van Horn added that he has seen credit card statements jump from zero to five-figure sums in no time.

This was echoed by North Carolina bankruptcy attorney Ed Boltz, who said that online gaming has led to an increase in people who incur five-figure credit card debts.

Van Horn and other experts agreed that the availability of online betting, the emergence of micro-betting markets, and the growing popularity of prediction markets have made the situation even more complex.

Unfortunately, both Van Horn and Boltz expect to see an increase in gambling-related bankruptcies in the near future. The latter said that the speed at which people fall into debt due to gambling has been “astonishing.”