The Spread: Sports Betting Legalization Spillovers Into Financial, Health, and Education Outcomes

Session Submission Type: Panel

Abstract

Since the Supreme Court's 2018 Murphy v. NCAA decision cleared the way for state-level legalization, online sports betting has expanded rapidly across the United States. While proponents of legalization emphasize that legal regulated gambling markets provide greater consumer protection than illegal unregulated markets, the full social costs of this expansion remain poorly understood. This panel brings together three papers that use quasi-experimental methods to assess the downstream consequences of sports betting legalization across three critical domains: mental health and substance use, household finances and consumer credit, and children's human capital outcomes.

The first paper examines whether state legalization of online sports betting affects prescription drug utilization among young men. Drawing from commercial health insurance claims data, the authors find that legalization increased the share of men aged 18–49 taking antidepressants and anti-anxiety medications, but had no detectable effect on substance use disorder medications.
The second paper asks whether sports betting legalization affects children's school attendance and labor market participation. Using the National Survey of Children's Health, the authors find that, among lower-income and financially stressed households, legalization is associated with higher chronic absenteeism, more grade repetition, and reduced teen employment. The third paper investigates effects on consumer financial outcomes, with particular attention to spatial spillovers across state lines. Using consumer spending and credit data, the authors find that counties in non-legalizing states near legal borders experience spillover loan delinquency effects nearly as large as direct effects. This creates a fiscal asymmetry in which non-legalizing states bear social costs without capturing tax revenue, generating competitive pressure to legalize even when aggregate costs may outweigh revenues. 

Together, these papers provide evidence that the societal costs of sports betting legalization extend to public health, household balance sheets, and the educational trajectories of children. As more states contemplate legalization, and as existing legal regimes mature, policymakers need comprehensive assessments of these laws' effects. This panel directly advances that agenda.

Policy Area

• Health Policy

Chair

• Matthew Eisenberg, Johns Hopkins University

Discussants

• Cordelia Dees Miran Kwon, Johns Hopkins University

• James Matthew Campbell, University of Minnesota - Twin Cities

Organizer

• Benjamin Westermeyer, Johns Hopkins University

Individual Presentations

• Online Sports Betting Legalization and Prescriptions for Mental Health and Substance Use Medications - Presenting Author: Benjamin Westermeyer, Johns Hopkins University

• Online Sports Betting or Online Poverty Trap? Impacts on Children’s Human Capital - Presenting Author: Archi Arnob, University of Kansas

• Sports Betting Across Borders: Spatial Spillovers, Credit Distress, and Fiscal Externalities - Presenting Author: Jacob Goss, University of Wisconsin-Madison