Online sports bettors may risk more than just their wagers. Here’s what’s at stake.

It’s well known that online sports betting can be a risky endeavor. But a new study from the Federal Reserve Bank of New York shows the practice may also be linked to higher delinquency rates, delivering another potential blow to Americans’ financial health.

Online sports betting, now legal in more than 30 U.S. states, allows users to make bets on everything from which team will win a game to how many rebounds a certain player might get. Popular platforms like DraftKings and FanDuel present a quick way to wager money without having to go to a physical location like a casino, which some states require. 

The practice has grown in popularity, with a 2025 survey by S&P Global Market Intelligence estimating that 15% of U.S. adults placed a bet on an online sportsbook within the last year. Of those, more than two-thirds were men.

As demand for these platforms has grown, so too has the amount of money Americans funnel toward online sports betting. Quarterly data from the New York Fed study shows average deposits — the initial amount a bettor puts down when they place a wager — have jumped since 2020. Bettors deposited an average of $1,250 per quarter in 2025, compared to around $500 just five years ago.

A gamble for your credit?

The New York Fed studied the impact online sports betting could have on consumers’ financial health by comparing betting activity and consumer credit outcomes in states that legalized it with those that have not.

To be sure, delinquency rates have been climbing for years and are now at their highest levels since the 2008 financial crisis. The rise can be attributed to a number of factors, with some research pointing to a drop-off in stimulus funds after COVID-19 as one of the catalysts.

The Federal Reserve Bank of New York, however, found that online betting could also be one factor at play when it comes to consumer credit outcomes. Since online betting became legal, the increase in delinquencies in states that legalized has outpaced those in states that didn’t, the organization found. 

The New York Fed used in-house data from its Consumer Credit Panel, which consists of anonymized credit reports from the credit reporting agency Equifax, and consumer spending data to gauge average online sportsbook deposits. They defined delinquency rates as 90 days past due on any credit product.

After sports betting was legalized, delinquencies rose 0.3 percentage points for the total population. 

While that is a relatively small increase, when the New York Fed looked solely at the population that newly took up sports betting after legalization (roughly 3% of the population), its estimates show delinquencies rose by 10 percentage points. That illustrates that betting activity could increase the risk of falling behind on debt.

That calculation shows how online betting can have an “economically meaningful effect with potentially lasting consequences for borrowers’ credit profiles,” the researchers wrote.

The next generation of online sports betting

The study did not take into account betting on prediction markets, which have become popular venues to place sports bets. On Kalshi, a platform that has approximately 4 million active users, 90% of the current trade volume is driven by sports.

However, recent legal challenges could put these platforms’ ability to host sports betting contracts to the test. Arizona’s attorney general recently sued Kalshi earlier this month, alleging that it engaged in illegal gambling practices by allowing users to bet on sporting contests and individual player performance. 

Lawmakers have also stepped up efforts to regulate sports betting. A bill introduced earlier this month would ban prediction markets from hosting wagers that resemble a sports bet or casino-style game.