New York Fed Study Links Legal Sports Betting to Rising Credit Delinquencies Among Americans Under Age 40

A Federal Reserve Bank of New York study has found a direct link between legal sports betting and rising credit delinquencies, with Americans under age 40 suffering the sharpest financial damage as smartphone gambling apps spread across more than 30 US states.

The research 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, Liberty Street Economics the study found.

'Our findings suggest that sports betting can have dramatic implications for household financial stability,' the authors wrote in the report, released on 25 March 2026.

Young Men at the Centre of the Crisis

The financial fallout is hitting young men hardest. 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.

Since the pandemic, bettors more than doubled their quarterly spending, going from under $500 (£378) in December 2019 to in excess of $1,000 (£757) by June 2021. Today, 90% of wagers are placed on smartphones rather than at casinos or racetracks.

The industry's growth has been explosive. Since 2018, more than 30 states have legalised mobile sports betting, leading to more than half a trillion dollars in wagers, according to the NY Fed. American Gaming Association data shows commercial gaming revenue hit a record $78.72 billion (£60 billion) in 2025.

Parents Blindsided by Children's Debts

Gambling counsellors say parents are increasingly discovering their children's debts only when creditors come calling.

'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 (£38,000). What are you gonna do about it?'' one counsellor told NPR.

A separate 2025 study co-authored by Brett Hollenbeck, an associate professor of marketing at the UCLA Anderson School of Management, produced similarly concerning trends. In states that allowed online betting, the study reported a 10% increase in the likelihood of bankruptcy and an 8% increase in debt collection amounts.

The financial harm also extends beyond state borders. Betting activity and the resulting consumer credit distress do not stop at state boundaries, the NY Fed found. Delinquencies rose even in states where sports betting remained illegal, but which bordered legal states.

Advertising Blitz Draws Scrutiny

The saturation of betting advertisements, particularly on social media platforms where young people spend their time, has drawn growing concern.

A February 2026 Sacred Heart University poll found 62% of Americans are concerned that sports gambling advertisements are affecting young viewers. Among 18 to 34-year-olds, 52.7% said the volume of betting advertisements during sports broadcasts is excessive.

Major operators like DraftKings and FanDuel have faced lawsuits alleging they target vulnerable populations. Baltimore filed suit against both companies in April 2025, claiming they used deceptive practices when marketing to those struggling with gambling problems.

The NY Fed study marks the first major Federal Reserve research directly connecting legal sports wagering to financial distress.

For families watching their finances drain through apps as accessible as social media, the findings confirm what many already suspected.