Gambling is expanding in America and making poor people poorer, according to new data

The problem of gambling addiction is old. The famous Russian author Fyodor Dostoevsky almost lost everything, later describing his habit:
“Within a quarter of an hour I won 600 francs. This whetted my appetite. Suddenly I started to lose, couldn’t control myself and lost everything. After that I … took my last money, and went to play … I was carried away by this unusual good fortune and I risked all 35 napoleons and lost them all.”
In a last ditch gamble, he signed a risky contract and almost lost the last things he owned — the rights to his own work. While the life-destroying problems of gambling are old, its methods are often not, and have become even more addictive and sophisticated over time.
American author Rick Whitaker describes his friend at gambling anonymous meetings who spent all of their disability checks on bingo, and another friend who was a million dollars in debt to loan sharks.
In his essay “One More Last Chance” Whitaker describes the hold gambling had over his own life. “If it’s been more than a day or two since I last played, I begin to feel a tension that can be quite vague — until I think of poker. The tension leads me to a belief that poker is the only means by which I will be freed.”
“Other obligations — to friends, partners, or family, to dinner, shopping, or work,” he continued, “are pushed aside in my head by the undeniable desire to sit alone at my computer, clicking mouse, winning and losing money … Inevitably there is a particular hand, which I lose, that initiates my downfall. From there it’s smooth sailing until I’m broke.”
While Dostoevsky had to go to a casino in person, and Whitaker had to log onto his computer, recent judicial and technological developments have made getting that gambling high yet even easier. A few years ago, a Supreme Court decision opened the floodgates of online sports gambling in the U.S. With this decision and the advent of smartphones and apps, now making bets is as easy as swiping on an app, and the temptation to gamble can travel in somebody’s pocket all day, every day.
For gambling addicts, this is the equivalent of putting someone struggling with drugs in an all-you-can-snort buffet. It’s now been long enough that the data on the harm caused by widely available sports gambling is starting to come in. In a recent paper, UCLA and USC researchers took advantage of the fact that different states have legalized online sports gambling at different times, using that to rigorously test the effects of making online gambling legal.
As their numbers demonstrate clearly, gambling is leaving a trail of destruction in its wake — especially for those who are already poor.
Additionally, these same researchers found that young men in low-income counties are hit especially hard. There’s also evidence gambling is contributing to the crisis of young men who are having a hard time establishing careers and families.
Another paper by business professors from BYU, Northwestern University and the University of Kansas found that the money for sports betting did not come from other forms of gambling. For example, people are not spending their lottery money on sports betting, but rather money from household and other investments. For example, legalization of sports gambling is associated with a 14% decrease in investments in the stock market.
Betting specific to sports also leads to more betting in other ways, with low-income households affected especially dramatically, these business scholars once again found. “Following the legalization of sports betting,” they write, “low-savings households increase their credit card balance by about $368 relative to high savings households, which is an increase of about 8% relative to the mean.”
For desperate families living paycheck to paycheck, $368 is huge.
Mark Johnson, one of the authors of the latter paper, suggested in an email exchange that some of these effects are not even apparent until later as households start to whet their appetite like Dostoevsky. “There is definitely a ramping up period after legalization as people start to engage more in sports betting,” he said.
“After individuals place their first bet, the probability that the individual makes another bet is over 50% in each quarter for the next 3 years. Furthermore, those bet sizes tend to increase over time — 3 years after the first bet, these individuals are depositing 8x the size of their first quarter bets.”
Compared to when households first make a foray into sports betting, Johnson said these longer-term statistics are helpful for anyone trying to evaluate the effects of legalization.
While legalization opened up the floodgates, 20 states still do not allow mobile sports gambling, but the gaming industry is working hard to expand. As seen in the American Gaming Association’s map below, in three of those states there are advance legislative efforts to legalize it.
Now, data is coming in to provide more insight into what the consequences of such legalization would be for individuals and families.
There are potentially even newer forms of betting on the horizon that can tap into even more, vulnerable markets. For example, Jason Kotter, another author on the BYU, Northwestern University and University of Kansas paper, said that “political prediction markets and other prediction markets are something to watch.”
“Right now, these markets have some guardrails in place that limit (at least in the U.S.) the size of bets,” he continued. But it wouldn’t surprise this scholar to “have the social acceptance of online sports betting eventually spill over into social acceptance of prediction market betting.” Such a loosening of restrictions, he said, would likely see a market around predictions grow “very quickly.”
With this wave of gambling legalization and normalization, Utah stands out as one of the few states where mobile sports gambling is illegal. However, even among this group, Utah stands out for taking a strong stand against gambling, as it is one of only five states that do not have a state-run lottery (including Nevada, interestingly; evidently their politically powerful casinos do not want the competition). Utah is also one of four states that do not allow commercial or tribal gaming.
It’s no surprise why Utah is relatively unfriendly to gambling. “Games of chance” are explicitly outlawed in its constitution, and The Church of Jesus Christ of Latter-day Saints, whose members make up a significant portion of the state of Utah, has a strong anti-gambling position, “including lotteries sponsored by governments” and have encouraged members to “join with others in opposing the legalization and government sponsorship of any form of gambling.”
Of course, such a position is not unique to the Church of Jesus Christ, as anti-gambling sentiment is found among many faiths and denominations. For example, one study found that most Protestant pastors find sport gambling wrong, and religious people have been shown to be less likely to have a gambling problem.
I was unable to find a publicly available dataset on gambling behavior that also had a large enough sample of Latter-day Saints to see if Latter-day Saints are less likely to gamble, but one study from a few years ago suggests that that is the case.
Anti-gambling sentiment is not only borne out of some sense of religious pickiness, once again, but also out of a concern for the poor. It has been known for a long time that the lottery, for example, hurts struggling people the most, with The Economist reporting that “the average adult living in the poorest 1% of zip codes spends almost 5% (or $600 annually) of their income on lottery tickets.”
The expansion of sports gambling is a chance to take stock on the consequences — and whether states and individuals are wise to keep walking down this path. Utah and a few other states have charted a different courts than the rest of the nation. And they’re smart to do so. Given past and present data on the effect of gambling on the poorest among us, as well as tear-jerking first-hand accounts of the destruction it causes, it is becoming clear why.
Editor’s note: A previous version of this article The American Gaming Association’s map on sports betting, compiling “state-level detail on types of wagering allowed, key regulations, legal retail and online/mobile sportsbooks.”
Correction: An earlier version of the article featured The American Gaming Association’s map, “U.S. Legal Sports Betting” rather than the “U.S. Sports Betting: Mobile” map it’s now updated to include.