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AIPROPX ReportFortune · 2h ago
This is a money-losing proposition for most of these individuals’: Americans are draining stock portfolios to shovel more money…
Rob Minnick fell into debt for the first time at age 19. Sitting in the back of his classroom during a freshman year math class, the now-27-year-old placed a wager on the New York Yankees during an MLB spring training game that sent him into the red. He assured his parents it wouldn’t happen again.
“Then it would happen five more times over the next five years,” he told Fortune .
Minnick gambled away the unemployment checks he received from his college campus job as he waited out the COVID lockdown from his parents’ house. When the stock market tumbled at the beginning of the pandemic, he yanked money from his stock portfolio and sold his Bitcoin and Ethereum, using the money to stoke the flames of a growing gambling addiction.
“My thought was, I need to get this money out and make it back right now, and then I’ll buy double what I just had, and then I’ll hold it,” he said.
Minnick will admit his myopia now, but his financial habits surrounding his gambling disorder are far from singular. A new wave of studies has found an increasing number of Americans are dumping stocks and draining savings in order to fuel sports betting habits—and finding themselves in financial turmoil as a result.
Since the U.S. Supreme Court overturned the Professional and Amateur Sports Protection Act in 2018—effectively legalizing sports betting—U.S. sports betting revenue has exploded from $441 million in revenue in 2018 to more than $16.6 billion in 2025 , according to Sportsbook Review.
The industry has minted billion-dollar deals between leagues and online platforms like DraftKings and FanDuel. And Americans placed about $30 billion in legal bets during the 2025 NFL season. That’s a big payday for the sports book and sports industry, yet it’s a hole burned in the pocket of many gamblers.
“This is a money-losing proposition for most of these individuals,” Scott Baker, an associate professor of finance at Northwestern University’s Kellogg School of Management, told Fortune . “On average, this is representing a drain to people’s finances.”
Baker authored a study , set to be published next month in the Journal of Financial Economics , that found that household bets increased $1,100 per year in states that legalized online sports betting. Meanwhile, the study also found a nearly 14% decrease in net investments in households after the introduction of legal online sports betting.
These gamblers are not just funneling money from other parts of an entertainment budget to sustain their betting habits, Baker said. Instead, they’re also using funds to attend sports games or watching sports in restaurants or bars, creating a snowball effect of money spent on sports betting and its accompanying entertainment activities.
“We’re seeing that this gambling plus increases in consumption are both detracting from some of the longer run equity investments—or positive, easy, risky investments that people have been making—and tend to put more pressure and strain on their budgets in general,” Baker said.
A colleague in the field, Brett Hollenbeck, a marketing professor at the UCLA Anderson School of Management, can back up Baker’s findings. His paper found that credit scores fell an average of 0.3% in states that had legalized sports betting four years after the activity became legal.
Using consumer credit data in the 38 states that have legalized sports betting in some form, the study also found increased rates of bankruptcy, debt collections, debt consolidation loans, and auto loan delinquencies following legalization.
“What’s really unique about this is not just that sports gambling is a big, important industry,” Hollenbeck told Fortune . “But it gives us a window into how gambling causes people’s behavior to change.”
This practice may become more prevalent. Betterment’s 2026 Retail Investor Survey released earlier this month found that of 1,000 retail investors, from Gen Z to Baby Boomers, more than one-quarter of Gen Z investors treated sports bettings as part of their long-term financial strategy; more than half redirected money originally intended to go into stocks toward sports betting instead.
Sounding the alarm on the sports betting era
These behavioral changes are alarming to experts, who are concerned that the proliferation of sports betting is increasing the prevalence of gambling disorders.
“I’ve seen people end up losing their houses, losing everything—not just because of sports wagering, just because of where gambling disorder will take them,” Michelle Malkin, a criminal justice and criminology professor at East Carolina University, told Fortune .
Because legalized sports betting is a relatively recent development, it is difficult to know the extent of its consequences for gambling addiction, she said. But early studies are starting to paint a picture. In Connecticut, which legalized online sports betting in 2021, 71% of state legal gambling revenue comes from problem or at-risk gamblers—who make up just 7% of residents, a Gemini Research study conducted by University of Massachusetts professor Rachel Volberg found.
Malkin believes problem gambling will become a bigger issue so long as sports betting remains under-regulated . “We can’t be winning everything off the backs of the people who are suffering most,” she said.
But for states that have legalized sports betting and are able to heavily tax winnings, the legal online gambling platforms have been a boon. In July alone, the Connecticut Lottery Corporation, the state’s official lottery, made $587,000 in gross revenue from over $4.8 million in patron winnings from sports retail wagers. A spokesperson from CT Lottery told Fortune the revenue is used in the state’s general fund, which invests in public health, libraries, and public safety. But advocates for greater gambling regulation warn this is only one piece of the puzzle.
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