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Government Wins Big as Americans Go Broke on Super Bowl Bets
Legalized sports betting adds billions to state budgets, but at a high cost to consumers
Feb. 6, 2026 at 4:39am
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A new study finds that the legalization of sports betting has led to a 'substantial increase' in bankruptcies, loan delinquencies, and debt sent to collection agencies in states that have legalized it. Despite concerns about the integrity of games and the financial toll on consumers, Congress has done little to regulate the industry as online gambling companies like FanDuel and DraftKings pour money into political campaigns.
Why it matters
The rapid expansion of legalized sports betting across the U.S. has created a new revenue stream for state governments, but it has also come at a significant cost to consumers. With easy access to online gambling, more Americans are going into debt or facing bankruptcy due to sports betting losses, raising concerns about the societal impact.
The details
Researchers from UCLA found that the legalization of sports betting, particularly online betting, has 'decreased consumer financial health' based on data showing increases in bankruptcies, loan delinquencies, and debt sent to collection agencies in states that have legalized it. Meanwhile, states are reaping the benefits, with New York assessing a 51% tax on sports gaming revenue. The online gambling industry has also ramped up political donations, mainly to Republican candidates, in an effort to fend off potential regulation.
- The U.S. Supreme Court ruled the Professional and Amateur Sports Protection Act unconstitutional in 2018, paving the way for states to legalize sports betting.
- In 2025, researchers from UCLA published a study finding a 'substantial increase' in bankruptcies, loan delinquencies, and debt sent to collection agencies in states that have legalized sports betting.
- In December 2026, an NBC News poll found that 63% of Americans are 'very concerned' or 'somewhat concerned' that sports betting will 'lead to games being fixed or rigged.'
The players
FanDuel
One of the major online sports gambling platforms in the United States.
DraftKings
One of the major online sports gambling platforms in the United States.
Senate Leadership Fund
A Republican political action committee that received a $500,000 donation from DraftKings in December.
UCLA
The university where researchers conducted a study on the impact of legalized sports betting on consumer financial health.
U.S. Supreme Court
The court that ruled the Professional and Amateur Sports Protection Act unconstitutional in 2018, paving the way for states to legalize sports betting.
What’s next
The SAFE Bet Act, first introduced in 2024 and again last year, would regulate advertising for sports betting and the use of artificial intelligence in online gambling, but it has yet to pass Congress.
The takeaway
The rapid expansion of legalized sports betting has created a new revenue stream for state governments, but it has also come at a significant cost to consumers. With easy access to online gambling, more Americans are going into debt or facing bankruptcy due to sports betting losses, raising concerns about the societal impact and the integrity of the games themselves.
