Sports Betting's Impact on American Sports

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Understanding the Consequences

Sports betting is negatively impacting American sports. Initially, it seemed like a small industry, but in a country driven by obsession, it's no surprise that betting apps have perfected dopamine delivery.

This toxicity is just beginning.

Gambling has long been part of American history, and sports gambling has been legal in Europe for years. However, what's effective there doesn't necessarily translate to the U.S.

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Impact on Financial Health

Sports gambling is affecting Americans’ financial health. In states where sports gambling has been legalized, financial health has deteriorated. According to a research paper from UCLA Anderson School of Management, there was a “…substantial increase in bankruptcy rates, debt collections, debt consolidation loans, and auto loan delinquencies…” within 4 years of a state legalizing sports betting. These results are stronger in states that allow online sports gambling compared to those that restrict it to in-person betting, and the effects are larger for young men in low-income counties.

If you’re still reading and trying to hold onto a reference: you can try to think of sports betting as the new state lottery.

Interesting note: A paper published by Holy Cross examined the impacts of sports gambling in New York State and found that for every $100 people bet on sports, lottery sales declined by $3.13.

More Toxic Than the Lottery

Sports betting is more toxic than the state lottery. The lottery happens at set times during the week, tickets cost a set amount, and there’s little variation in how you can bet. Sports betting, however, is far more variable and doesn’t depend on a set amount of money.

Ahmed, who grew up in convenience stores, explains it best:

“During the week, people come in to buy lottery tickets. You buy 20 bucks every week for the Wednesday and Saturday Powerball. You don’t win. Boo hoo, whatever. You get paid next Friday and do the same thing again. 20 bucks on the lottery.

Sports gambling is a way different experience. You’re probably more attached to your local sports teams than the lottery, so you bet on sports instead. The Celtics play three times this week during the playoffs, and the Red Sox also have a game. You have limited resources, getting paid 500 bucks a week, and you’ve set aside your 20 dollar budget for gambling.

But now you see you can win in various ways: parlays, props, in-game bets, etc. You can spread your money around and maximize your chances of a return. Instead of going to the store to buy lottery tickets, you can do it all on your phone without getting up out of your seat. So…the point is, why wouldn’t you blow past your allotted budget?”

*we’re not going to talk about scratch-offs, that’s a whole different thing

The State's Role

But the state is winning, right? They’re funding stuff, aren’t they? The state has no incentive to cut down on sports gambling because they profit from it. They will continue to fund state-sponsored gambling services to maintain some civility, but they want people gambling.

From the National Conference of State Legislatures:

“As of 2025, sports betting is legal in 38 states and Washington, D.C., bringing significant financial benefits to these regions. In the 2023 fiscal year, states collected more than $1.8 billion in tax revenue from sports betting, according to a study by the Tax Foundation. And the American Gaming Association reports that legal sports gambling operations generated a record $10.92 billion in revenue in 2023.”

Allocation of Funds

What are states doing with this money? Let’s have an example, shall we?

North Carolina’s allocation is as follows:

· Tax rate on sports betting: 18%

· $500k to offset the collection of the tax

· $2 million to support gambling addiction (a comical amount)

· $1 million to amateur sports

· $1 million for grants to assist with travel sports

· The remaining amount is allocated equally to support UNC athletics.

Soapbox moment: North Carolina collected $131 million in revenue last year from sports betting. For size, the NC Education budget is about 18ish billion per year. Given the cost of Pre-K, NC’s gambling revenue could expand the program to include 13,000 extra kids per year

Conclusion

This is another instance where legalizing vice and turning it into a heavily taxed industry may not be the societal boon we thought it would be. Can a vice like sports betting enhance your social life? Absolutely, it’s a communal activity (half of Americans made a sports bet last year). Can it ruin your life, too? Sure.

Can immense tax revenues build the cities/towns you want? Sure.

Can it also misallocate funds or build a city that you won’t take advantage of because your mental/ financial health has deteriorated due to gambling? Sure.

This is an extreme example, but you get the point. Sure, we need more research on the effects of sports betting on mental health, financial security, and the American psyche.

Legal avenues of gambling (casinos, lottery) have existed for a long time…

…but it’s concerning when the casino is now on your phone.