The rise of legalized gambling

In 1992, the Professional and Amateur Sports Protection Act (PASPA) banned sports betting through most of the United States. While individuals could still make bets with one another, neither the government nor businesses could be involved in gambling "schemes" linked to competitive sports.

In 2012, New Jersey legalized sports betting, which led to a lawsuit from the NCAA, which argued that doing so violated the PASPA. The case eventually reached the U.S. Supreme Court in 2018, which ruled that the PASPA violated the Tenth Amendment's prohibition on the federal government using powers reserved for states.

Since then, 38 states and the District of Columbia have legalized sports gambling, and many states also allow online casino games. In 2025, Americans spent $166 billion on sports betting, and some studies have shown that Americans are more likely to have placed a bet than to have read a book in the past year.

Even in states where sports gambling is illegal, people can still access prediction markets, which are online platforms where users bet on future events. According to the data analytics site TickerTracker, people wagered almost $60 billion on Kalshi, a popular prediction market site, in the last month — a year-over-year increase of more than 2000% compared to the $2.8 billion wagered last September.

Legalized gambling sees limited benefits, high risks

So far, research suggests that the legalization of sports gambling has had limited benefits and significant negative financial and health impacts.

For example, states where sports gambling is legal are only seeing a combined tax revenue of around $500 million a quarter, which is less than what the states make from alcohol, tobacco, or marijuana.

Separately, a 2024 study from Northwestern University found that legal sports gambling had a negative effect on households' savings, with every $1 spent on betting leading to $2 less in investment accounts. Another study found that the legalization of online sports gambling increased the risk of going bankrupt by 25% to 30% and increased debt delinquency.

Legalized gambling has also contributed to health harms. In a study from the University of Oregon, researchers estimated that legal sports betting was associated with a roughly 9% increase in intimate-partner violence. Other studies have shown that suicidal ideation and suicide risk is five to 10 times higher in people with gambling disorders.

In a recent study published in the American Journal of Preventive Medicine, researchers found that after sports gambling was legalized in Ontario, ED visits for gambling disorders doubled. Most of the people who went to the ED for gambling disorders were men, and a third of these visits led to hospitalizations.

Many patients arrived at the ED with major depression, suicidal thoughts, or other mental health and substance use disorders. In their records, ED doctors noted that gambling had contributed to those conditions.

"This rise in severe presentations might be a bit of a warning signal of a wider increase in harms across the general population," said Ryan Forrest, a public health doctoral student at the University of Toronto and one of the study's authors. "We think about things like financial distress, family and relationship problems, worsening mental health — and those things are not captured in the emergency department data."

"The way that online systems work right now do not protect people at all who are prone to behavioral addictions, and that, to me, is very dangerous for my clients," Grant said. "Bartenders have rules about how much they can serve someone. Police can issue a DUI — there are efforts to stop people who are potentially causing harm. But that does not happen in the gambling space." 

Prediction markets have also made betting more accessible. While sports betting is restricted to people over 21, those as young as 18 can place wagers on prediction markets. These markets are also not required to follow state-mandated protections for people with gambling addictions, like self-exclusion lists that ban people from casinos, mobile sports betting, and more.

"It's extremely concerning," said Jesse Suh, a clinical psychologist who treats patients with gambling issues. "Most of the patients I see with problem gambling are college aged, and I've heard about them spending their parents' money for the semester on betting apps. With prediction markets, there are just no obstacles keeping people away from mobile gambling."

Overall, "it is crucial to target the speed of gambling products, advertisement of gambling particularly to the young, but also put an end to easy and fast access to credit that enables debt-driven gambling," wrote the authors of a 2022 paper on the mental health impacts of gambling debt.