Sports Betting Is Everywhere, Especially on Credit Reports
Recorded: March 28, 2026, 4 a.m.
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Liberty Street Economics « China’s Electric Trade | Main March 25, 2026 Sports Betting Is Everywhere, Especially on Credit Reports Jacob Goss and Daniel Mangrum Since 2018, more than thirty states have legalized mobile sports betting, leading to more than a half trillion dollars in wagers. In our recent Staff Report, we examine how legalized sports betting affects household financial health by comparing betting activity and consumer credit outcomes between states that legalized to those that have not. We find that legalization increases spending at online sportsbooks roughly tenfold, but betting does not stop at state boundaries. Nearby areas where betting is not legal still experience roughly 15 percent the increase of counties where it is legal. At the same time, consumer financial health suffers. Our analysis finds rising delinquencies in participating states, with spillover effects across state lines. What is more, even though the share of people taking up sports betting after legalization is small (roughly 3 percent of the population), overall credit delinquency rises by about 0.3 percentage points. Our findings suggest that sports betting can have dramatic implications for household financial stability. Average Deposits at Sportsbooks Rise Steeply After Mid-2020 Betting Across Borders Sportsbook Deposits Grow Dramatically After Legalization in Legal Counties and in Nearby Illegal Counties Implications for Consumer Credit Credit Delinquencies Increase Steadily After Sports Betting Legalization Implications for Not-Yet-Legal States Jacob Goss is a former research analyst in the Federal Reserve Bank of New York’s Research and Statistics Group and a current graduate student at the University of Wisconsin—Madison. Daniel Mangrum is a research economist in the Federal Reserve Bank of New York’s Research and Statistics Group. How to cite this post: You may also be interested in: Sports Betting Across Borders: Spatial Spillovers, Credit Distress, and Fiscal Externalities Where Are Mortgage Delinquencies Rising the Most? Student Loan Delinquencies Are Back, and Credit Scores Take a Tumble DisclaimerThe views expressed in this post are those of the author(s) and do not necessarily reflect the position of the Federal Reserve Bank of New York or the Federal Reserve System. Any errors or omissions are the responsibility of the author(s). Share this: Share on Facebook (Opens in new window) Share on LinkedIn (Opens in new window) Email a link to a friend (Opens in new window) Print (Opens in new window) Comments You can follow this conversation by subscribing to the comment feed for this post. Post a commentLeave a ReplyYour email address will not be published. Required fields are marked *Comment * (Name is required. Email address will not be displayed with the comment.)Name * Δ All Liberty Street EconomicsSearch Follow Liberty Street Economics receive email alerts for this page WATCH: About the Research Group About the Blog Economic Research Tracker Liberty Street Economics is available on the iPhone® and iPad® and can be customized by economic research topic or economist. View by TopicBalance of PaymentsBank CapitalBanksCentral BankCorporate FinanceCOVID-19 FacilitiesCreditCrisisCryptocurrenciesDemographicsDSGEEconomic HistoryEducationEmploymentEuro AreaExchange RatesExpectationsExportsFederal ReserveFed FundsFinancial InstitutionsFinancial IntermediationFinancial MarketsFiscal PolicyForecastingHey, Economist!Historical EchoesHousehold FinanceHousingHuman CapitalInflationInternational EconomicsLabor MarketLender of Last ResortLiquidityMacroeconomicsMicroeconomicsMonetary PolicyNew JerseyNew YorkNonbank (NBFI)PandemicPanicPuerto RicoRecessionRegional AnalysisRegulationRepoStocksStudent LoansSupply ChainSystemic RiskTariffsTreasuryUnemployment Most Read this Year Who Is Paying for the 2025 U.S. Tariffs? Useful LinksEconomic Indicators Calendar Disclosure Policy The LSE editors ask authors submitting a post to the blog to confirm that they have no conflicts of interest as defined by the American Economic Association in its Disclosure Policy. If an author has sources of financial support or other interests that could be perceived as influencing the research presented in the post, we disclose that fact in a statement prepared by the author and appended to the author information at the end of the post. If the author has no such interests to disclose, no statement is provided. Note, however, that we do indicate in all cases if a data vendor or other party has a right to review a post. Archives2026 March 2026 Request a Speaker Data Visualization Contact Us |
Jacob Goss and Daniel Mangrum’s research, published in March 2026 within the Liberty Street Economics blog, investigates the surprising and significant impact of legalized sports betting on household financial health. The core of their analysis centers around a comparative study of states that had legalized mobile sports betting with those that had not, utilizing anonymized consumer transaction data from the New York Fed’s Consumer Credit Panel (CCP). Their findings reveal a complex and concerning trend – while sports betting participation remains relatively low (around 3% of the population), legalization has demonstrably triggered a tenfold increase in online sportsbook spending and, crucially, has contributed to an elevated rise in consumer credit delinquencies across both legal and bordering non-legal states. The researchers segmented their data into three groups: counties directly impacted by legalization, counties within fifteen miles of legal states, and a control group at least sixty miles away. They observed a sharp initial increase in sports betting deposits—approximately $30 per quarter in the first few months after legalization and growing to around $40 after three years—within both legal and spillover areas. This increase was particularly pronounced in the initial phases, suggesting a period of market expansion and rapid adoption. A key discovery was the substantial 'spillover' effect, with counties near legal states experiencing roughly 15 percent of the increase in betting activity, representing a considerable influx of funds from outside the defined legal boundaries. The authors highlight that this phenomenon underscores the interconnectedness of financial markets and the potential reach of new forms of consumer spending. Furthermore, the study meticulously examined credit delinquency rates, revealing a steady increase in delinquencies within states that had legalized sports betting. This rise was notably driven by younger borrowers under the age of 40. The observed delinquency increase was approximately 0.3 percentage points, despite the relatively small percentage of the population actively engaging in sports betting. This highlights the potential vulnerability of consumer finances to addictive behaviors and impulsive spending. Goss and Mangrum carefully detail the data, presenting estimates and confidence intervals to illustrate the magnitude of these effects. They correctly acknowledge the limitations of their analysis, specifically noting that it does not differentiate between consumers who bet and those who do not, yet demonstrates a clear link between new engagement in sports betting and greater credit risk. The authors conclude that the implications of legalized sports betting extend beyond simple market dynamics. The ripple effect of increased spending and subsequent credit distress wasn’t contained by state lines, causing financial instability in nearby, non-legal regions. The findings suggest a need for careful consideration of the potential financial consequences accompanying the expansion of online gambling and the importance of proactive measures to mitigate associated risks. Goss and Mangrum’s work provides a timely and informative analysis of this relatively new trend in consumer behavior and its impact on the broader financial landscape. |