A recent study by the Federal Reserve Bank of New York has identified a correlation between the legalization of online sports betting and increasing delinquency rates on consumer credit. The analysis reveals that states permitting online sports wagering have experienced a sharper rise in borrowers falling behind on debt payments than states that have not legalized the practice.
Online sports betting has expanded rapidly, with more than 30 U.S. states now permitting users to place wagers on various sporting events through platforms such as DraftKings and FanDuel. These services enable bettors to make instant deposits and wagers without visiting physical venues. According to a 2025 survey by S&P Global Market Intelligence, 15% of U.S. adults reported placing an online sportsbook bet in the past year, with over two-thirds of those bettors being men.
Increase in Betting Deposits and Delinquency Rates
Data from the New York Fed study shows that quarterly average deposits on online sportsbooks more than doubled over five years, rising from approximately $500 in 2020 to $1,250 in 2025. To assess the financial impact, researchers analyzed anonymized credit data from Equifax alongside consumer spending patterns in states before and after legalizing online sports betting.
Delinquency rates, defined as being 90 days or more past due on any credit account, have risen universally since the early 2020s, reaching levels not seen since the 2008 financial crisis. While this increase has multiple causes, including reduced government stimulus payments after the COVID-19 pandemic, the New York Fed’s findings indicate that the legalization of online sports betting contributes to the trend.
Specifically, the study found a 0.3 percentage point higher rise in delinquency rates for the general population in states adopting legal online sports betting relative to states without legalized betting. For the subset of consumers who began betting on sports online after legalization—about 3% of the population—the delinquency rate increase was approximately 10 percentage points, suggesting a significant risk of credit difficulties linked to new betting activity.
Potential Economic and Regulatory Implications
The researchers noted that the increase in delinquencies connected to online sports betting could have lasting negative effects on borrowers’ financial profiles. They emphasized the economic significance of these findings, citing potential challenges for consumers managing debt obligations while engaging in online wagering.
Additionally, the study did not examine newer forms of betting such as prediction markets, platforms that simulate sports wagers but have come under legal scrutiny. For example, Kalshi, a popular prediction market with around four million active users, relies heavily on sports-related contracts. However, recent legal action in Arizona challenges the legality of such platforms hosting sports bets.
At the federal level, lawmakers have introduced legislation seeking to further regulate or restrict sports betting activities within prediction markets, reflecting growing concerns about the expansion of online gambling and its financial risks.
Why it matters
The findings underline a growing need for policymakers, regulators, and consumers to consider the broader financial consequences of online sports betting. As states continue to legalize and expand access to these platforms, understanding their impact on credit health and delinquency rates is crucial for mitigating potential risks to personal financial stability.
Rising delinquency can affect credit access, borrowing costs, and economic resilience, making this an important issue for both individuals and financial institutions involved in consumer lending.
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