An Empirical Analysis of the Impact of Legal Sports Betting On Consumer Credit Health

Abstract

The Supreme Court’s May 2018 decision in Murphy v. NCAA removed the federal prohibition against sports betting and invited states to regulate the practice for themselves. This has launched a national debate. Advocates in favor of legal sports betting champion increased tax revenues, business for struggling casinos and racetracks, and regulation of a practice that has flourished in the shadows. Detractors warn of the social ills commonly associated with gambling, including crime, addiction, and financial waste.

This Note provides the first empirical analysis of the impact of legal sports betting on consumer credit health. Making use of the staggered sequencing of state legalization, I find that legal sports betting accounts for a small but statistically significant increase in mortgage delinquency rates. I submit that this finding justifies caution as policymakers explore legal sports betting opportunities.