Sports Betting Is Everywhere, Especially on Credit Reports

Editor’s Note: The chart notes for the first chart have been updated to correct errors in how we labeled the trend line colors. (March 25, 2026)

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.

Legalization Leads to High Spending that Continues to Rise

Using anonymized transaction-level consumer spending data, we aggregate online sportsbook deposits at a county-quarter level to compare counties in legal states to those in not-legal states before and after legalization. The chart below plots two measures of average online sportsbook deposits within legal states over time. The blue line (measured by the left axis), presents average deposits per adult. We see that spending grew dramatically after mid-2020, exhibits seasonal patterns consistent with the National Football League season, and continues to grow through the end of 2025.

The red line (measured on the right axis) shows the total deposits divided by the number of individuals with at least one online sportsbook deposit each quarter. In contrast to average deposits in the population, average deposits per bettor have leveled since 2022. We conclude that long-run growth in total betting is driven less by rising deposits among existing bettors and more by broader participation and continued market expansion.

Betting Across Borders

An interesting wrinkle to sports betting access is that potential bettors do not have to be residents of a legal state to place a wager. Since they only need to be physically present in a legal state at the time they make a bet, those living near legal states have relatively easy access to legal sports betting. To account for spillovers across borders in our analysis, we split our sample into three mutually exclusive groups in each quarter: a direct treatment group of counties within a legal state, a spillover group of counties near a legal state but in still-illegal states (within fifteen miles), and a control group of counties farther away from any legal states (at least sixty miles from a legal state). We then compare the evolution of online betting in each quarter relative to the first quarter of legal access.

We find a large increase in spending within state lines with a similarly sharp but smaller increase in nearby spillover counties. On average, online betting deposits per adult increase by roughly $30 per quarter in the first few quarters after legalization and grow to around $40 after three years. Most striking is the magnitude of spillovers: for nearby counties that are not legal, the impact is roughly 15 percent the size of the direct effect, representing significant spending coming from across state lines.

Implications for Consumer Credit

Next, we examine credit delinquencies using the New York Fed Consumer Credit Panel (CCP), a nationally representative 5 percent sample of anonymized Equifax credit reports. Following legalization, delinquency rose steadily in legal counties and surpassed half a percentage point three years after legalization, representing a noticeable deterioration in repayment performance from a baseline of 10.7 percent. Spillover counties follow a similar pattern with a smaller magnitude increase in delinquencies, suggesting that, as with betting activity, the financial consequences extend across state lines. In our Staff Report, we show that the overall increase in delinquency is driven by borrowers under the age of 40. Following legalization, the share of under-40 borrowers who are delinquent rises by 1.02 percentage points for credit cards and 0.55 percentage point for auto loans.

Our consumer credit analysis explores the overall impact of sports betting on the full population without differentiating between those that gamble and those that do not. However, the spending analysis shows that only around 3 percent of the population newly takes up sports betting after legalization. If we instead focus on only the 3 percent of people who newly take up sports betting after legalization, the implied increase in delinquency rate conditional on take-up is 10 percentage points, roughly a doubling from the baseline rate.

Implications for Not-Yet-Legal States

In our Staff Report, we find that following the legalization of sports betting in a state, credit delinquencies increase, driven by those under 40 years old. In addition, betting activity, and the resulting consumer credit distress, do not stop at state boundaries. Some who live in not-yet-legal states near legal states travel across state lines to wager and delinquencies rise in these not-legal areas as well. In legal states, tax revenue from sports betting can help offset some of the negative impacts of legalized sports betting, but states that are not legal themselves bear negative consequences of sports betting without the tax revenue to offset these costs. As we show in the Staff Report, the negative consequences without compensating tax revenue may create incentives for states to legalize, particularly those with population centers near legal states.