The numbers come first.
U.S. sports betting revenue surged from $441 million in 2018 — the year the Supreme Court overturned the Professional and Amateur Sports Protection Act — to more than $16.6 billion in 2025, according to Sportsbook Review. Americans placed roughly $30 billion in legal bets during the 2025 NFL season alone. Behind every dollar of that revenue sits a household balance sheet taking the loss.
A study authored by Scott Baker, an associate professor of finance at Northwestern University's Kellogg School of Management, and set to be published in the Journal of Financial Economics, quantifies the damage. Household bets increased $1,100 per year in states that legalized online sports betting. Net investments in those same households fell by nearly 14% after legalization.
'This is a money-losing proposition for most of these individuals,' Baker told Fortune. 'On average, this is representing a drain to people's finances.'
The capital is not simply migrating from one entertainment line to another. Baker found that gambling expenditures compound alongside increased spending on sports games, bars, and restaurants — a snowball effect that squeezes the long-run equity positions households would otherwise hold.
A separate study by Brett Hollenbeck, a marketing professor at UCLA Anderson School of Management, used consumer credit data across the 38 states that have legalized sports betting in some form. His findings: credit scores fell an average of 0.3% four years after legalization, accompanied by increased rates of bankruptcy, debt collections, debt consolidation loans, and auto loan delinquencies.
The generational signal is particularly sharp. Betterment's 2026 Retail Investor Survey of 1,000 retail investors found that more than one-quarter of Gen Z investors treated sports betting as part of their long-term financial strategy. More than half of that cohort redirected money originally intended for stocks toward sports betting instead.
Rob Minnick, now 27, lived the data. At 19 he placed his first wager during an MLB spring training game and went into debt. Over the following five years he gambled away unemployment checks, liquidated his stock portfolio, and sold Bitcoin and Ethereum holdings when markets fell at the start of the pandemic — convinced he could recover the losses through more betting.
'My thought was, I need to get this money out and make it back right now,' Minnick told Fortune.
Michelle Malkin, a criminal justice and criminology professor at East Carolina University, warned that gambling disorder does not stop at a depleted brokerage account. 'I've seen people end up losing their houses, losing everything,' she told Fortune.
CEO Times take: Free enterprise built the legal sports betting industry, and the market is entitled to operate within the law. But capital is not neutral — it either compounds in productive assets or it evaporates in a sportsbook's margin. A nearly 14% decline in net household investment is not a lifestyle choice; it is a measurable destruction of the private wealth formation that funds retirement, homeownership, and the next generation's opportunity. Policymakers who champion legalization as a tax-revenue windfall owe voters an honest accounting of what that revenue costs the households writing the checks. The taxpayer who bets away his index fund today is the social-services case file tomorrow. The market has already voted: the house always wins.
