Bankruptcy filings are increasing in some areas across the United States. Overall bankruptcies are up 16%. The economy has been tough lately, but some studies are showing that the cause is related to something else: sports gambling.
There are now 38 states that allow in-person and/or online sports gambling. In those states bankruptcies have risen 28% since 2018. Maryland is one of the states that allows online gambling. Maryland legalized online gambling in November 2022. Several forms of online gambling — including sports betting, daily fantasy sports, and horse racing wagering — are all legal in the state. There are currently a dozen online sportsbooks operating in Maryland. Anyone over the age of 21 can use a mobile app to bet on sports in the state.
Researchers in southern California have recently released the findings of a study that shows a causal relationship between the increase in sports gambling and the increase in bankruptcy. It is easy for people to get addicted to online gambling. It can be done without leaving your home, making it super convenient. Some people place wagers regularly, even on a daily basis.
The study looked at what happened to peoples’ financial health once sports gambling became legal in their states. From 2018 to 2023, bankruptcies increased by 28%. Debt collections increased by 8%. Credit scores even dropped slightly, by 0.3%. When separating states that legalized sports betting online from states that made it illegal, the decrease was three times larger.
Because the time of legalization is different across states, this kind of variation allowed the researchers to establish a causal relationship. In Ohio, sports gambling began in 2023, and there has been a 9% increase in consumer bankruptcies since then. Kentucky, which legalized sports gambling in 2019, saw a 16% increase in personal bankruptcy filings from 2022 to 2023.
Researchers came to the conclusion that giving people easy access to gambling increases the negative consequences associated with gambling and addiction. Some bankruptcy attorneys have clients where there was more sports betting than there were transactions for food. There has been a dramatic increase of clients with sports gambling issues in the past year, and it is expected to increase even more.
Most policymakers legalized sports gambling to take advantage of the tax revenue it generates. In some states, this is a huge amount — potentially hundreds of millions of dollars. The Maryland Lottery, casinos and sports betting contributed $1.585 billion to the state in Fiscal Year 2024, according to The Maryland Lottery and Gaming.
An Easy Trap
Many people get addicted to gambling, and it is getting easier than ever to play cash games and bet on sports games from the comfort of your own home.
Addictions such as gambling and other bad habits can lead to money issues and even bankruptcy. You will need to curb these habits to secure your financial future. The Law Offices of Adam M. Freiman can assess your situation and let you know if bankruptcy is a good first step. To schedule a consultation with our office, call (410) 486-3500 or fill out the online form.
