Legal Sports Betting Linked to Rising Credit Delinquencies Among Young Americans

Federal Reserve study finds sharp spike in financial troubles for under-40 bettors as mobile gambling apps spread across US

Apr. 6, 2026 at 9:08am

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A new study by the Federal Reserve Bank of New York has found a direct link between the legalization of online sports betting and rising credit delinquency rates, especially among Americans under the age of 40. The research shows that while overall delinquency rates rose about 0.3% in states with legal sports betting, for the roughly 3% of the population who took up betting, delinquencies spiked by more than 10%, with the sharpest increases seen in young men.

Why it matters

The findings highlight the potential financial dangers of the rapid expansion of legal sports betting, fueled by the proliferation of smartphone gambling apps. As more states legalize mobile sports wagering, the study suggests it could have dramatic implications for household financial stability, particularly among younger demographics.

The details

The study by NY Fed economists Jacob Goss and Daniel Mangrum found that credit delinquency rates rose about 0.3% overall in states where sports betting is legal. But among the roughly 3% of the population who took up betting after their state made it legal, delinquencies spiked by more than 10%. The sharpest increases were driven by those under 40 years old. Nearly half of men aged 18 to 49 now hold an account with at least one online sportsbook, according to a 2025 Siena College Research Institute survey. A 2025 S&P Global Market Intelligence survey estimated that 15% of US adults placed a bet on an online sportsbook within the last year, and more than two-thirds of them were men.

  • The NY Fed study was released on March 25, 2026.
  • Since 2018, more than 30 states have legalized mobile sports betting.
  • Bettors more than doubled their quarterly spending, going from under $500 in December 2019 to in excess of $1,000 by June 2021.

The players

Jacob Goss

Economist at the Federal Reserve Bank of New York and co-author of the study.

Daniel Mangrum

Economist at the Federal Reserve Bank of New York and co-author of the study.

American Gaming Association

The national trade group for the U.S. casino industry, which reported that commercial gaming revenue hit a record $78.72 billion in 2025.

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What they’re saying

“Our findings suggest that sports betting can have dramatic implications for household financial stability.”

— Jacob Goss and Daniel Mangrum, Economists, Federal Reserve Bank of New York

“We're getting more calls from even parents of college kids, or even high school. They have no idea anything is going on, and then they're getting a call from a bookie who's saying 'Your child owes me $50,000. What are you gonna do about it?'”

— Unnamed gambling counselor

What’s next

The Federal Reserve and state policymakers are likely to closely monitor the long-term financial impacts of the rapid expansion of legal sports betting, particularly on younger demographics.

The takeaway

The NY Fed study highlights the potential dangers of the proliferation of mobile sports betting apps, which have made gambling more accessible than ever before. As the industry continues to grow, there are growing concerns about the financial toll it may be taking on vulnerable populations, especially young adults.