Online Sports Betting Is Now Being Linked to Rising Personal Bankruptcies — Here’s What the Data Says

Total consumer bankruptcy filings in the United States rose 12 percent in calendar year 2025, climbing from 478,752 filings in 2024 to 533,949 in 2025, according to data from Epiq AACER, which tracks U.S. federal court records. Individual Chapter 7 filings — the kind that allow people to wipe out unsecured debt entirely — increased by 15 percent over the same period. Consumer bankruptcy attorneys across the country say they are seeing a pattern they were not seeing five years ago: a growing share of clients in their 20s and 30s carrying tens of thousands of dollars in credit card debt tied directly to online sports betting activity.

The connection between legal sports betting expansion and household financial distress is no longer just anecdotal. A peer-reviewed study by researchers from UCLA, the University of Southern California, and Harvard, using financial data from approximately 7 million U.S. consumers, found that states which expanded to online or mobile sports betting saw the likelihood of bankruptcy filings increase by roughly 25 to 30 percent three to four years after legalization — compared to states that had not yet allowed online access. The same study found an 8 percent increase in the average amount of debt in collections per consumer in those states, along with an increase in debt consolidation loan usage.

Why Online Access Changes the Equation

The research is clear on a specific distinction: in-person sports betting does not produce the same financial effects that online and mobile access does. When bettors have to physically go somewhere to place a wager, there is friction in the process. With a mobile app, the barriers are almost entirely removed. Bets can be placed at any time, funded through linked bank accounts or credit cards, and scaled up quickly without the social feedback that in-person environments provide. The apps are also designed to minimize the time between losing and placing the next bet.

Consumer bankruptcy attorneys who have been handling these cases describe a pattern that accelerates faster than most forms of consumer debt. Ed Boltz, a bankruptcy attorney in North Carolina, told Business Insider that he has started seeing clients with $20,000, $30,000, and $40,000 in credit card debt accumulated over a relatively short period of betting activity. Florida attorney Chad Van Horn said approximately 15 percent of his current bankruptcy clients are carrying gambling-related debt — and that the speed at which that debt accumulates is different from traditional financial problems. “The debt builds incredibly fast because people are not gambling with cash; they are gambling with borrowed money,” Van Horn said. “It is almost a straight line to max out.”

Van Horn pointed specifically to microbetting — the practice of placing small, frequent wagers on in-game events throughout a sporting broadcast — as a particularly risky behavior pattern among younger clients. The individual bet amounts feel manageable, but the cumulative spend across a single game or evening can reach hundreds of dollars without the bettor registering it as a significant financial decision in the moment.

Who Is Most at Risk

The academic research on this question found that the negative financial effects of legal online sports betting are concentrated most heavily among consumers who were already in financially precarious positions before legalization. Subprime borrowers — those with lower credit scores before betting became accessible — showed the steepest increases in bankruptcy likelihood and debt collections. Higher-income consumers with stronger credit profiles were largely unaffected in aggregate.

That concentration among financially vulnerable populations is significant for how policymakers and consumer advocates think about the issue. Sports betting generates substantial tax revenue for states — legal wagers have totaled more than half a trillion dollars since the Supreme Court struck down the federal prohibition in 2018 — and that revenue is a genuine fiscal benefit. But if the financial harm is concentrated among people who were already stretched thin, the distributional effects of that trade-off are worth examining seriously.

The Federal Reserve Bank of New York published a staff report finding that credit delinquency rates spiked in states with mobile sports betting, particularly among borrowers under 40. That demographic — younger adults who came of age with legalized mobile wagering already normalized — represents the sharpest edge of the risk curve.

Signs to Watch For — and Where to Get Help

Bankruptcy attorneys describe a common progression in gambling-related financial distress. It typically begins with manageable losses that prompt larger bets in an attempt to recover. When the initial credit card or bank account runs dry, the pattern often shifts to cash advances, secondary cards, or redirecting income that should cover bills toward betting activity. By the time someone shows up in a bankruptcy attorney’s office, the debt is often several months old and spread across multiple accounts.

Several warning signs are worth watching for before things reach that point. These include consistently placing bets larger than originally intended, using credit cards or cash advances specifically to fund gambling accounts, hiding betting activity from family members, missing bill payments to cover losses, and a persistent sense that the next win will fix everything. These are recognized markers of problem gambling behavior, not just bad luck.

Consumer protections do exist. All major licensed sportsbooks operating in the U.S. are required to offer self-exclusion programs, which allow bettors to voluntarily restrict their own access to the platform for a defined period or permanently. Responsible gambling tools including deposit limits, session time limits, and cooling-off periods are also available on licensed platforms. The National Council on Problem Gambling operates a 24/7 helpline at 1-800-522-4700 with referrals to resources in all 50 states.

For bettors who are still engaged with legal platforms and want to be intentional about managing risk, understanding how betting odds work is a useful starting point — recognizing the built-in house edge across all bet types is fundamental to any realistic approach to types of bets and how often they can realistically win.