Wagering with your well being? Legalization of online gambling and mental health

• In Event: Cyber-Risky Behaviors

Abstract

In 2018, the U.S. Supreme Court struck down the Professional and Amateur Sports Protection Act (PASPA), a 1992 federal law that prohibited gambling on sporting events. In the absence of the federal PASPA, state governments are responsible for decisions about the regulation of sports gambling. As of 2025, 38 states and territories have legalized some form of sports gambling and and 30 states have legalized online sports gambling. Legalized gambling seems to create value for many consumers and is a substantial source of tax revenue in many states.  However, the broader availability of gambling may also lead to adverse outcomes, including an increase in the harms associated with gambling addiction and associated mental health disorders.
In this paper, we examine the effects of legalized sports gambling on individuals and families that have previously struggled with gambling addiction. We use historical health insurance claims data to construct a sample of 5,221 people who had a diagnosis for pathological gambling prior to the 2018 policy change. A subset of 3,270 of these patients  are linkable to family members and so we construct analytic samples of 4,541 children and 2,424 spouses of people with a previous gambling addiction diagnosis. Preliminary analysis shows that compared to the general population, people with gambling addictions and their spouses and children have much higher rates of depression, anxiety, bipolar disorder, ADHD, and substance use disorders. With the linked samples in hand, we use a staggered adoption difference in difference design to estimate the effects of state laws that legalize sports gambling on the mental health of people and families who were already struggling with problem gambling. Quantifying these effects provides insight into the possible social costs associated with legalizing sports gambling, which should be compared with the benefits of the policy from the point of view of consumer welfare and government tax revenue.

Authors

• Nicole Y Siegal, Indiana University
  Presenting Author

• Coady Wing, Indiana University
  Non-Presenting Co-Author

• Alberto Ortega, Indiana University
  Non-Presenting Co-Author