Credit Scores Down, Delinquencies Up in Sports Betting Border States, Says NY Fed
Posted on: February 24, 2026, 02:56h.
Last updated on: February 24, 2026, 02:57h.
- Federal Reserve Bank of New York highlights negative personal finance trends for some bettors in sports wagering-adjacent states
- Adverse outcomes include modest downturns in credit scores, slight upticks in delinquencies
Following the Supreme Court ruling on the Professional and Amateur Sports Protection Act (PASPA) that paved the way for states to legalize or reject sports wagering, a slew of studies examined adverse personal finance outcomes for bettors in states that embraced online sports wagering.
A new study by the Federal Reserve Bank of New York goes a step further, highlighting what it calls “spatial spillovers,” or the effects of legalized online sports betting (OSB) on regions that are near legal sports betting states. Though not at catastrophic levels, effects on personal finances in those areas are bad, according to the study.
Counties in non-legal states within 15 miles of a legal state experience spillover spending equal to roughly 14 percent of the direct effect, with these spillovers declining to roughly zero by 60 miles,” notes the New York Fed. “Using the New York Fed Consumer Credit Panel, we find that median credit scores decline by roughly 1 point and overall delinquency rises 0.3 percentage points from a 10.7 percent base, with spillover delinquency rising nearly 0.2 percentage point.”
That data imply that bettors in a non-legal state, say Texas, are willing to cross state lines provided they’re close to the border — in this case Louisiana — to place sports bets, potentially inviting negative financial outcomes in the process.
Financial Distress Spreads Stronger Than Betting Itself
There’s no shortage of studies highlighting the ill effects problematic sports betting habits can have on participants’ personal finances, but most focus on state or local outcomes.
For example, a 2024 study conducted by researchers at the University of California Los Angeles (UCLA) and the University of Southern California (USC) found that credit scores fell modestly in OSB states and those declines resulted from rising “bankruptcy rates, debt collections, debt consolidation loans, and auto loan delinquencies.”
By examining spillover effects in neighboring jurisdictions, the New York Fed study goes further, noting that credit scores decline in “spillover counties” and that financial distress in those regions accelerates at a pace that’s more intense than sports betting itself.
“Delinquency rates in spillover counties rise by 0.18 percentage points, or about 58% of the direct effect,” according to the study. “Notably, while the first-stage spillover effect on betting intensity is only about 15% as large as the direct effect in legal counties, the spillover effect on delinquency is roughly 60% as large, suggesting that financial distress spreads across borders more strongly than betting activity itself.”
Younger Bettors Bear Brunt of Spillover Effects
While some studies have contested sports betting impacts on personal finances, many other indicate younger people, particularly young men, are vulnerable to negative financial consequences related to their sports wagering habits.
The New York Fed study confirms as much, noting that in spillover counties, auto loan and credit card delinquencies trend higher among bettors under the age of 40.
“Notably, the spillover effects for this age group are larger than the direct effects for both auto loans (0.78 percentage points) and credit cards (1.25 percentage points),” observes the New York Fed. “While this result seems counter-intuitive, legal states often devote tax revenues from sports betting toward mitigating the negative effects of sports betting. These include state-level phone lines for those struggling with addiction, supports groups, education, and advertising. If these resources are available in legal states but not in spillover counties, residents of the latter might be more prone to financial distress.”
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