Following a U.S. Supreme Court ruling in 2018, many states rushed to legalize online sports gambling. Now, the impacts of these policy decisions are starting to come into focus.
A study from the University of California San Diego reveals that legalized gambling is associated with a notable increase in irresponsible betting behaviors, particularly among low-income populations.
The study found that low-income individuals were more likely to engage in high-risk betting, spending more than 1 percent of their income on gambling, exacerbating financial instability, and prolonging poverty.
Economic burdens visited upon troubled gamblers extend beyond individual losses, affecting families and communities through increased bankruptcy rates, job loss, and reduced productivity.
A common slogan for growing the gambling footprint is revenue generation, but states that have legalized betting don’t see significant revenue increases.
As Texas found after creating a state lottery in 1992, taxes from legalized gambling don’t go a long way. Although the lottery was pitched to Texans as an avenue to fund public education, it has never paid for more than a week of schooling in a given year.
Total online gambling tax revenue is “modest compared to the annual total state and local tax collected per capita.” The state with the highest proportional contribution of gambling revenue was Michigan, where funds totaled a whopping 0.8 percent of annual state and local taxes.
“The lack of meaningful revenue validates what we’ve stated from the start; this is about lining the pockets of special interest, not in the best interest of Texas,” said Brady Gray with the Texas Family Project.
He added, “Online gambling is predatory to the core.”
The UC San Diego study suggests he’s correct. Of the more than 700,000 gamblers studied, 96 percent lost money gambling online. The researchers found this was by design, as the platforms “ban or throttle frequent winners.”
In the last legislative session, the Texas House approved a measure to allow online gambling in the State. The entire Democrat caucus and a minority of Republicans supported the proposal.
The Senate killed that measure by not giving it a hearing or a vote.