Sports betting legalization continues to expand across the United States—but new research suggests it may come with unexpected social costs.
A new working paper from the National Bureau of Economic Research (NBER) finds a measurable link between legalized sports betting and reduced household food sufficiency, especially among vulnerable populations.
It's a message that the sports betting public doesn't want to hear, much like the one Lady Luck HQ sent to casino gamblers last year, but it's a harsh reality. The new information comes at a time when states like New Jersey are pushing for stronger responsible gambling rules.
What the Study Found
The paper, titled “Wagering the Bread Money: Sports Betting Legalization and Food Sufficiency,” analyzed data from 2021 to 2023, when many states rolled out legal sports betting.
Key findings include:
- A 2.1% drop in food sufficiency among working-age adults without a college degree
- A much larger 10.5% decline among active sports bettors
- Effects lasting 3 to 5 months, often tied to NFL seasons
- Stronger impacts among adults aged 25–44 and racial or ethnic minority groups
Researchers estimate that legalization in just nine states led to roughly 284,000 additional households struggling to afford enough food, along with $130.2 million in added annual healthcare costs.
Why Food Sufficiency Matters
Food sufficiency is a stricter measure than general food insecurity. It focuses on whether households have enough food to eat—not just whether they worry about running out.
Even small percentage declines can signal meaningful hardship at scale.
How Researchers Measured the Impact
The study used data from the U.S. Census Bureau’s Household Pulse Survey (HPS), a rapid-response survey launched during the COVID-19 pandemic.
The HPS is designed to track real-time changes in household well-being, including:
- Food access
- Employment
- Housing stability
- Health and spending
Because the survey is conducted frequently (biweekly during key periods), it allows researchers to detect short-term changes—such as spikes in betting activity during football season.
To isolate the effect of legalization, the authors used a statistical method called an imputation-based difference-in-differences model. This approach compares changes across states that legalized betting at different times.
What’s Driving the Trend?
The study points to financial strain—not mental health or job loss—as the primary mechanism.
In simple terms:
Money spent on sports betting may be crowding out essential expenses like groceries.
Supporting evidence includes:
- Increased sportsbook search activity after legalization
- Higher reported betting participation
- No consistent changes in employment or mental health indicators
Strengths and Limitations of the Data
The Household Pulse Survey offers several advantages:
- Large sample sizes across states
- Fast data collection during policy changes
- Detailed demographic breakdowns
However, it also has limitations:
- Low response rates (often under 10%)
- Online-only format, which may exclude some populations
- Experimental design compared to traditional surveys like the CPS
Researchers used statistical weighting to improve accuracy, but some bias may remain.
Industry and Policy Implications
This study adds to a growing body of research on the social costs of legalized gambling, particularly as the U.S. market continues to expand after the 2018 Supreme Court decision.
For regulators and operators, the findings raise important questions:
- Should responsible gambling measures be expanded?
- Are current safeguards sufficient for at-risk groups?
- How should policymakers balance tax revenue with public health outcomes?
The timing is especially relevant as major events like the 2026 World Cup drive spikes in betting activity nationwide.
Important Context
NBER working papers are preliminary and have not yet undergone peer review. While the study relies on credible and data-driven methods, the findings should be viewed as early evidence rather than definitive conclusions.
Still, the study offers one of the first causal analyses linking sports betting legalization to household-level financial hardship—making it a significant contribution to the ongoing policy debate.
Action Network provides a host of responsible gambling resources for those who need them, including:
- Educational Content: Articles, podcasts, and videos that emphasize the importance of responsible gambling.
- Budgeting Tools: Tools or advice for setting a gambling budget to ensure that users only bet amounts they can afford to lose.
- Self-assessment Quizzes: Questionnaires to help users assess their gambling habits.
They all emphasize the importance of responsible gambling and setting limits.
