Editor’s Notice: The chart notes for the primary chart have been up to date to right errors in how we labeled the development line colours. (March 25, 2026)
Since 2018, greater than thirty states have legalized cell sports activities betting, resulting in greater than a half trillion {dollars} in wagers. In our current Employees Report, we look at how legalized sports activities betting impacts family monetary well being by evaluating betting exercise and client credit score outcomes between states that legalized to people who haven’t. We discover that legalization will increase spending at on-line sportsbooks roughly tenfold, however betting doesn’t cease at state boundaries. Close by areas the place betting will not be authorized nonetheless expertise roughly 15 % the rise of counties the place it’s authorized. On the similar time, client monetary well being suffers. Our evaluation finds rising delinquencies in collaborating states, with spillover results throughout state traces. What’s extra, though the share of individuals taking on sports activities betting after legalization is small (roughly 3 % of the inhabitants), total credit score delinquency rises by about 0.3 share factors. Our findings counsel that sports activities betting can have dramatic implications for family monetary stability.
Legalization Results in Excessive Spending that Continues to Rise
Utilizing anonymized transaction-level client spending information, we mixture on-line sportsbook deposits at a county-quarter stage to check counties in authorized states to these in not-legal states earlier than and after legalization. The chart beneath plots two measures of common on-line sportsbook deposits inside authorized states over time. The blue line (measured by the left axis), presents common deposits per grownup. We see that spending grew dramatically after mid-2020, reveals seasonal patterns in keeping with the Nationwide Soccer League season, and continues to develop by the top of 2025.
The purple line (measured on the best axis) exhibits the entire deposits divided by the variety of people with at the least one on-line sportsbook deposit every quarter. In distinction to common deposits within the inhabitants, common deposits per bettor have leveled since 2022. We conclude that long-run development in complete betting is pushed much less by rising deposits amongst current bettors and extra by broader participation and continued market enlargement.
Common Deposits at Sportsbooks Rise Steeply After Mid-2020
Notes: The chart plots quarterly common deposits at sportsbooks per grownup (left axis, purple) and per bettor (proper axis, blue) in counties with authorized cell sports activities betting. Each sequence are unweighted averages throughout all counties in states the place cell betting is authorized in that quarter.
Betting Throughout Borders
An fascinating wrinkle to sports activities betting entry is that potential bettors should not have to be residents of a authorized state to position a wager. Since they solely must be bodily current in a authorized state on the time they make a wager, these dwelling close to authorized states have comparatively easy accessibility to authorized sports activities betting. To account for spillovers throughout borders in our evaluation, we cut up our pattern into three mutually unique teams in every quarter: a direct therapy group of counties inside a authorized state, a spillover group of counties close to a authorized state however in still-illegal states (inside fifteen miles), and a management group of counties farther away from any authorized states (at the least sixty miles from a authorized state). We then examine the evolution of on-line betting in every quarter relative to the primary quarter of authorized entry (personal legalization for the authorized counties or close by legalization for the spillover counties).
The chart beneath plots the estimated impact of legalization on common deposits at sportsbooks individually for the direct impact and the spillover impact in every quarter relative to the primary quarter of authorized entry. We discover a big enhance in spending inside state traces (blue line) with a equally sharp however smaller enhance in close by spillover counties (gold line). On common, on-line betting deposits per grownup enhance by roughly $30 per quarter within the first few quarters after legalization and develop to round $40 after three years. Most hanging is the magnitude of spillovers: for close by counties that aren’t authorized, the affect is roughly 15 % the scale of the direct impact, representing vital spending coming from throughout state traces.
Sportsbook Deposits Develop Dramatically After Legalization in Authorized Counties and in Close by Unlawful Counties
Notes: The chart plots estimates (in circles and squares) and 95 % confidence intervals (in shaded areas) for the change in common sportsbook deposits per grownup in quarters relative to the primary quarter of authorized entry. Authorized entry is outlined as own-state legalization for counties in authorized states (blue line) and close by legalization for counties in spillover states (gold line). The complete empirical specification may be present in Goss and Mangrum (2026).
Implications for Shopper Credit score
Subsequent, we look at credit score delinquencies utilizing the New York Fed Shopper Credit score Panel (CCP), a nationally consultant 5 % pattern of anonymized Equifax credit score stories, with the identical geographic strategy as above. The chart beneath exhibits the affect of legalization on the share of the county inhabitants with any account ninety or extra days late, with the blue line displaying the direct impact and the gold line displaying the spillover impact. Following legalization, delinquency rose steadily in authorized counties and surpassed half a share level three years after legalization, representing a noticeable deterioration in reimbursement efficiency from a baseline of 10.7 %. Spillover counties observe an analogous sample with a smaller magnitude enhance in delinquencies, suggesting that, as with betting exercise, the monetary penalties lengthen throughout state traces. In our Employees Report, we present that the general enhance in delinquency is pushed by debtors below the age of 40. Following legalization, the share of under-40 debtors who’re delinquent rises by 1.02 share factors for bank cards and 0.55 share level for auto loans.
Our client credit score evaluation explores the general affect of sports activities betting on the total inhabitants with out differentiating between people who gamble and people that don’t. Nonetheless, the spending evaluation exhibits that solely round 3 % of the inhabitants newly takes up sports activities betting after legalization. If we as an alternative deal with solely the three % of people that newly take up sports activities betting after legalization, the implied enhance in delinquency price conditional on take-up is 10 share factors, roughly a doubling from the baseline price.
Credit score Delinquencies Improve Steadily After Sports activities Betting Legalization
Notes: The chart plots estimates (in circles and squares) and 95 % confidence intervals (in shaded areas) for the change in credit score delinquency charges in quarters relative to the primary quarter of authorized entry. Authorized entry is outlined as own-state legalization for counties in authorized states (blue line) and close by legalization for counties in spillover states (gold line). The complete empirical specification may be present in Goss and Mangrum (2026).
Implications for Not-But-Authorized States
In our Employees Report, we discover that following the legalization of sports activities betting in a state, credit score delinquencies enhance, pushed by these below 40 years outdated. As well as, betting exercise, and the ensuing client credit score misery, don’t cease at state boundaries. Some who dwell in not-yet-legal states close to authorized states journey throughout state traces to wager and delinquencies rise in these not-legal areas as properly. In authorized states, tax income from sports activities betting can assist offset a few of the adverse impacts of legalized sports activities betting (states collected practically $3 billion in such tax income in 2024 alone), however states that aren’t authorized themselves bear adverse penalties of sports activities betting with out the tax income to offset these prices. As we present within the Employees Report, the adverse penalties with out compensating tax income might create incentives for states to legalize, notably these with inhabitants facilities close to authorized states.
Jacob Goss is a former analysis analyst within the Federal Reserve Financial institution of New York’s Analysis and Statistics Group and a present graduate pupil on the College of Wisconsin—Madison.
Daniel Mangrum is a analysis economist within the Federal Reserve Financial institution of New York’s Analysis and Statistics Group.
Easy methods to cite this submit:
Jacob Goss and Daniel Mangrum, “Sports activities Betting Is In every single place, Particularly on Credit score Studies,” Federal Reserve Financial institution of New York Liberty Road Economics, March 25, 2026, https://doi.org/10.59576/lse.20260325
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Disclaimer
The views expressed on this submit are these of the creator(s) and don’t essentially replicate the place of the Federal Reserve Financial institution of New York or the Federal Reserve System. Any errors or omissions are the duty of the creator(s).
