Date of Publication: February 24, 2026, 02:56h.
Last Updated: February 24, 2026, 02:57h.
- Federal Reserve Bank of New York identifies concerning financial trends for gamblers in states with sports betting.
- Negative developments include slight decreases in credit scores and small increases in delinquencies.
In the aftermath of the Supreme Court’s decision regarding the Professional and Amateur Sports Protection Act (PASPA), which allowed states to either adopt or reject sports betting, numerous studies have looked into the negative financial impacts on bettors in states that legalized online sports wagering.
A recent investigation by the Federal Reserve Bank of New York elaborates on what’s termed as “spatial spillovers,” shedding light on the consequences of legalized online sports betting (OSB) in areas adjacent to legalized states. While not alarming, the findings indicate detrimental effects on personal finance in these regions.
“Counties situated within 15 miles of a legal betting state observe spillover expenditures reaching approximately 14 percent of the direct impact, with such effects diminishing to virtually zero at distances of 60 miles,” the New York Fed notes. “Analyzing the New York Fed Consumer Credit Panel, we see median credit scores dip marginally by about 1 point while delinquency rises by 0.3 percentage points from a base of 10.7 percent, along with spillover delinquency increasing by nearly 0.2 percentage points.”
This data suggests that individuals in non-legalized states, like Texas, may cross state lines to places like Louisiana for sports betting, potentially leading to adverse financial repercussions.
Financial Distress Spreads More Rapidly Than Betting
Numerous studies have documented the harmful impacts of excessive sports betting on individuals’ financial well-being, mainly focusing on local or state-level outcomes.
For instance, research from 2024 by scholars at the University of California Los Angeles (UCLA) and the University of Southern California (USC) indicated that credit scores in OSB states have experienced a marginal decline, attributed to increased rates of “bankruptcy, debt collections, debt consolidation loans, and auto loan delinquencies.”
By investigating spillover effects into neighboring counties, the New York Fed study goes a step further, revealing that credit scores are also adversely affected in “spillover counties,” and that financial hardships are escalating more rapidly than the betting activity itself.
“In spillover counties, delinquency rates increase by 0.18 percentage points, corresponding to about 58% of the direct effect,” the study states. “Interestingly, while the initial spillover effect on betting intensity is only around 15% of the direct effect in legal states, the spillover effect on delinquency approximates 60% of the same, indicating that financial distress can spread across state lines more aggressively than betting practices.”
Young Gamblers Most Affected by Spillover Effects
While some studies have disputed the influence of sports betting on personal finances, many have shown that young individuals, especially young men, are particularly susceptible to the negative financial impacts of sports wagering.
The recent study by the New York Fed corroborates this, highlighting that in spillover counties, delinquencies for auto loans and credit cards are notably higher among bettors under 40.
“Remarkably, spillover effects for this demographic exceed the direct effects on both auto loans (0.78 percentage points) and credit cards (1.25 percentage points),” the study points out. “Although this finding may seem counterintuitive, states with legalized sports betting often allocate tax revenue to address its negative ramifications. These funds support helplines for addiction, support groups, educational initiatives, and advertising. However, such resources may not exist in spillover counties, potentially increasing the likelihood of financial hardships for their residents.”