Data Shows Bankruptcies, Credit Scores Not Impacted By Online Sports Betting, PPI Paper Says

By Bill Speros Sep 9th, 2025 5:06 PM EDT

There is no “big difference” between bankruptcy filings and overall credit scores in states that were early adopters in legal online sports betting in comparison to those who weren’t, an examination of the available data by the Public Policy Institute finds.

A paper entitled “Balancing Innovation and Risk: The Case of Legalized Sports Betting” by PPI Chief Economic Strategist Michal Mandel, released Wednesday, examines the real numbers behind other studies that raised “widespread worries about the negative financial, social, and emotional impacts” of online sports betting.

“We looked at the data concerning consumer credit scores and bankruptcies,” Mandel told bookies.com Tuesday. “It’s kind of a big picture from 50,000 feet if you can see the effects of legal sports betting. It doesn’t give you a final answer, but it does say: ‘Well, we’re not seeing any big changes.’”

Focus On 'Early Adopters' Show Little Impact

Mandel put PPI's focus on the 16 states & Washington DC that launched sports betting from 2018-21. Here's a look those jurisdictions that legalized online sports betting from 2018-21 and the decline in bankruptcies from 2019-24.

STATE	YEAR	DECLINE
New Jersey	2018	-48.7%
West Virginia	2018	-43.9%
Indiana	2019	-30.1%
Iowa	2019	-34.8%
New Hampshire	2019	-49.0%
Oregon	2019	-27.2%
Pennsylvania	2019	-41.3%
Colorado	2020	-33.6%
District of Columbia	2020	-56.0%
Illinois	2020	-47.3%
Tennessee	2020	-40.8%
Arizona	2021	-33.9%
Connecticut	2021	-46.0%
Michigan	2021	-33.4%
Virginia	2021	-38.1%
Wyoming	2021	-40.6%
All Early Adopters		-39.6%
All OSB States		-36.2%
All States		-34.3%

As the chart shows, from 2019 to 2024 — a period of rapid increase in online ports betting — consumer bankruptcy filings fell by 34%, continuing a multi-year trend, the paper reported.

Consumer bankruptcies in the first quarter of 2025 were close to the lowest level in more than 20 years, despite the prevalence of online sports gambling. Sports betting is live and legal in 38 states, plus Washington DC. Betting launches in Missouri on Dec. 1

“We found that the early adopter states had a consumer bankruptcy decline of 40% from 2019 to 2024, compared to the 34% national decline. For example, New Jersey and West Virginia, the first two states to adopt mobile sports betting, had bankruptcy declines of 49% and 44% respectively. Meanwhile, Alabama, a state that has not adopted online sports betting, saw only a 28% decline in consumer bankruptcies."
- Balancing Innovation and Risk: The Case of Legalized Sports Betting

While bankruptcies rose nationwide 13.7% from 2023 to 2024, there was a minor difference on the plus side (13.6% vs. 13.9%) between states that adopted sports betting and those that did not.

Data Shows No Sports Betting Effect On Credit Scores

A similar trend held with credit scores. From 2019 until 2024, national average FICO scores rose from 703 to 715. In state that adopted sports betting between 2018-21, the increase matched the national average.

While net spending on legal sports betting rose from $920 million in 2019 to $13.7 billion in 2024, overall spending on gambling has stayed flat as a share of consumer spending. The paper notes that gambling accounted for 1.04% of consumer spending in 2024, compared to 1.07%, according to the Bureau of Economic Analysis.

No 'Reason To Treat Sports Gambling Differently'

The aim of the paper was to look at the overall data available – in terms of both consumer spending and bankruptcies – and not to come to any action plan.

“Stay alert for signs of problem gambling. But at this point, I don’t see any sort of reason to treat sports gambling differently from discretionary spending,” Mandel said. “People are concerned about how much they’re spending. People need to keep an eye on their spending.”

PPI opposes any borrowing to fund gambling in the same way it opposes the use of credit to fund travel, concert tickets, life experiences and cosmetic surgery.

“From this perspective, sports gambling does not raise unique issues compared to other discretionary experiential purchases. It may be advisable to discourage households from taking on excessive debt, but this should be part of a broader policy discussion.”
- Balancing Innovation and Risk: The Case of Legalized Sports Betting

Previous Studies

Mandel cites two widely cited studies in this area from Northwestern and UCLA. They concluded that the spread of online legal sports betting led to:

• A reduction in overall savings
• A likelihood that bankruptcies would increase by 25-30% between 3-4 years of legalization.
• A drop in credit scores of 1% over 4 years where online sports betting was legalized

The academic papers are based on samples, Mandel said, not data. Both of those studies cited information culled from the COVID pandemic period, which Mandel believes is an historic outlier. “The swings in the behavior during the pandemic were unprecedented,” Mandel said. “My sense is that was easy to mistake pandemic-driven changes during that period to sports betting changes during that period. I wanted to look at the aggregate.”

'We do our research independently'

PPI views itself as being apolitical and “radically pragmatic.” While PPI often make actions recommendations on its findings, the goal here was offering a “big data point” for operators, regulators, legislators and others to use.

“We do our research independently,” he said, adding this study was done without any guidance from any entity in the sports betting space. “We follow the evidence and go where it guides us.”

Mandel’s interest in sports betting spawned from a desire to stay connected with his late father, who was a retired accountant and found the odds intriguing.

“He was 94 and looking for an activity and we hit on sports gambling,” Mandel said. “We spent a couple of years doing bets together. It fit into the gambit of what we do at PPI, which is to worry about the balance between innovation and regulation. So, I decided to burrow into it."