Credit delinquency rates are on the rise in states that have legalized sports betting, and it’s impacting Gen Z and millennials the most.
The New York Fed used an analysis of consumer credit data and defined delinquency rates as being 90 days past due on any credit purchase, such as auto loans or mortgage payments.
“Our findings suggest that sports betting can have dramatic implications for household financial stability,” the authors wrote.
Millennials and Gen Z are particularly vulnerable to negative financial consequences as a result of sports betting. While 22% of Americans have an account with at least one online sportsbook, according to a 2025 Siena College Research Institute Survey, nearly half of men ages 18 to 49 have an account. People under 40 made up the largest share of individuals with credit delinquency, which rose to 26% after legalization, the Fed study found using “back-of-the-napkin” math.
“The various outcomes of delinquencies and credit scores [are] just kind of indicating that it seems to be leading to some harm among consumers,” Poet Larson, the study co-author and postdoctoral fellow at the Digital Data Design Institute at the Harvard Business School, told Fortune.
Larson speculates that sports betting has become so popular. Young people, to whom online sportsbooks are marketed toward and who have less accumulated weather than older generations, could be particularly at risk, he said.
These financial effects extend beyond states where sports betting is legal. The Fed study found significant spatial spillover effects, meaning delinquency rose in states where sports betting was illegal, but which bordered legal states. Spillover delinquency rose 0.2% compared to the 0.3% baseline, a result of individuals crossing borders in order to use online sports betting platforms in states where it is legal.
States that have not yet legalized sports betting may still see similar trends in financial insecurity for reasons beyond spillover effects. The rise in popularity of prediction markets, such as Kalshi—which are legal and regulated by the Commodity Futures Trading Commission (CFTC) as “designated contract markets”—have effectively created a national sports betting market.
“Because you have so many people sports gambling, you can start to see appreciable financial harms,” Larson said. “For prediction markets…if it’s small, then we might see financial harm, but it may be kind of difficult to detect.”
