A new study has found that over 10% of sports bettors are squandering large portions of their retirement savings on gambling.
The study of transaction data from 184,000 homes revealed that about 11% of online sports bettors are problem gamblers, and they are more likely to come from lower-income households.
The research conducted by Brigham Young University, University of Wisconsin, University of Nebraska, and University of Kansas professors, published in the Journal of Financial Economics, also found that after sports betting became legal, households reduced their net investment in brokerage accounts by 20%.
On top of that, the biggest bettors reduced their investment deposits by more than half: almost 20 cents of every dollar they invested in a betting app never ended up in long-term savings. This means that despite the evidence that sports betting is a poor financial plan, an increasing number of people, including those who had little resources to begin with, are viewing gambling as an investment.
“If you have a diversified investment portfolio like an S&P index, it consistently makes money over a long period,” said study co-author and BYU professor Jason Kotter. “With sports betting, you might win occasionally, but if you look over a window of six months or longer, only a tiny fraction of people do better than break even. If you think you are going to make a lot of money betting, you are expecting to be an extreme exception in the data.”
Frequent gamblers also squander retirement savings on sports-adjacent items
The distinction between entertainment and investment was further blurred when the researchers discovered that frequent bettors also raised spending in sports-related areas, including restaurants, pubs, and cable television.
“It creates an exacerbating effect where they not only draw money from investment accounts but also spend more in places they wouldn’t have without the legalization of sports betting,” said study co-author and BYU professor Mark Johnson. “They view it as both entertainment and investing; they go to a restaurant with friends to watch the game and discuss their bets together.”
According to a Pew Research Center survey conducted in October 2025, 43% of American citizens believe that legalizing sports betting across much of the nation is detrimental to society. This new research certainly lends some credence to that belief.