Sports betting is degrading the financial health of the most vulnerable households, according to a new study that tees up an emerging political issue.
The study, which draws on transaction data from more than 180,000 households, found that sports betting doesn’t replace shopping or other gambling, like lottery tickets or casino outings, but adds to it, eating into savings and driving up debt. “Risky bets crowd out positive expected value investments,” like buying a house or investing for retirement, the study says. (A sizable share of bettors, according to the report, say they view betting as an investment strategy.)
Monthly trading volume on Kalshi and Polymarket, much of it on sports, swelled from $2 billion in early 2025 to nearly $50 billion in June. The negative effects are starting to show up. Researchers at the New York Fed blamed legalized sports betting for rising consumer-loan delinquencies. A separate study found that for every dollar wagered on sports, net investment in stocks and other financial instruments fell by just over two dollars, suggesting that consumers are frittering away money that could go toward building long-term wealth.
“Somebody needs to talk about what the negatives are,” billionaire and philanthropist John Arnold said on a recent episode of Semafor’s Compound Interest. He plans to put pressure on politicians to crack down.
