Finance
It's time to rein in sports betting
When it comes to your finances, sports betting may be one gamble you don’t want to take.
Wagering on sports can lead to poorer debt management and worse credit scores. Bettors are also more likely to increase their spending and shrink their investments, according to a pair of recent studies. The consequences are biggest among financially vulnerable populations.
What’s worse, per a third study, is that the way sports betting is evolving could make it one of the most addictive forms of gambling.
It’s time for policymakers to step in and regulate this budding betting industry six years after it was legalized in the US to help people avoid their worst impulses — before it’s too late.
“As individuals, voters, [and] policymakers, I think our results are concerning,” Justin Balthrop, a co-author of one of the studies and an assistant professor of finance at the University of Kansas, told Yahoo Finance.
“But it’s very hard to make prescriptions before you have a diagnosis. And what I think our paper is really trying to do is get very precise estimates of exactly what the problems are.”
The financial consequences of sports betting
Sports betting began to take hold after the Supreme Court struck down the Professional and Amateur Sports Protection Act in May 2018, allowing states to set their own sports gambling laws.
So far, sports betting is legal through retail and/or online sportsbooks in 38 states and the District of Columbia. Revenue has jumped, growing 30.3% to $7.56 billion year to date through July from the same period last year.
In his study, Balthrop — who refers to himself as “a pretty avid and voluminous sports bettor” — took advantage of the staggered rollout of sports betting across the US after its legalization, giving him and his colleagues time to understand the before and after effects of this betting.
What he found was for every $1 deposited into online sportsbooks, those households reduce their investment allocations by $2. The doubling effect — from $1 to $2 — comes from the additional spending outside of the bets to support their gambling. Think extra streaming services or more sports bar tabs to watch games.
Additionally, sports betting increases the number of times households overdraw their bank accounts, Balthrop found. These effects were worse for financially constrained households, which also reduced their credit card payments while increasing their balances.
“The core of this effect is taking place in households that may not have budgetary slack,” Balthrop said.
Davide Proserpio and his colleagues found similarly concerning findings in their study. Overall, the average credit score in a state fell by 0.3% after legalizing sports gambling. That figure triples to 1% if the state permitted online sports gambling.
The fact the study took the average credit score of a state’s entire population likely dilutes the real impact on a bettor’s personal credit score, Proserpio, an associate professor of marketing at the University of Southern California, said.
On top of that, bankruptcies, debt consolidation loans, and debt collections increased in states that legalized sports betting, especially online betting — to the point that Proserpio found that lenders restricted access to credit to protect themselves. Low-income young men were more likely to be affected.
“It’s not just gambling is affecting, on average, consumer financial health,” he said, “it is also affecting a part of the population that is already low income and probably has other types of [financial] problems.”
‘A casino in our pockets’
Balthrop and Proserpio documented the consequences of sports betting, but their studies didn’t examine why this particular form of gambling can be so detrimental.
That’s where Dr. Jamie Torrance, a researcher in psychology at Swansea University in the UK, and his colleagues come in. They examined numerous studies worldwide on gambling in what’s called a scoping review and unearthed patterns to help explain why sports betting has gotten so pernicious. It comes down to three factors: access, quantity of bets, and illusion of control.
Historically, sports betting was a slow, “simplistic form of gambling,” Torrance said. To wager on a game, you had to call up a booker or walk into a betting shop. You could only bet if a team was going to win, lose, or tie. And then you had to wait until the game was over for the outcome of your bet.
“There’s lots of research that indicates that the longer you have to wait for a gambling outcome, the less addictive and harmful the product usually is,” Torrance said.
Not anymore with sports gambling, which is instantly accessible on our phones and more akin to slot machines.
“We’re basically walking around with a casino in our pockets,” Torrance said.
On popular apps such as DraftKings and FanDuel, bettors can wager at any time of the day, on any sport, on any game. They can bet on more than just who wins the game, too; they can put money on the outcome of the next baseball pitch or field goal kick. The options are nearly endless and the results come back faster.
“That is a big issue,” he said.
Another major problem is that sports bettors can easily convince themselves they can beat the odds, Torrance said, providing “an illusion of control.”
They fancy themselves as sports experts. They watch all the games and read all the game reports. They may subscribe to sports newsletters with insider info. Heck, maybe they were a half-rate player a decade ago.
“Sports betting has a way of tapping into people’s misestimation of their own expertise,” Balthrop said, agreeing with Torrance.
But — like any other type of gambling — the game is rigged. The house always wins.
‘A trade-off’
Torrance’s research also uncovered how sports betting could evolve — and his two major predictions are unsettling.
First, he expects sports betting companies to employ augmented reality. For instance, you could point your phone at a live sporting event, and the app would provide real-time odds on different bets.
Second, he anticipates these companies will provide bettors with very specific notifications based on their gambling behavior. A person could receive an alert that the star player’s mother is having surgery this week that could affect the player’s performance. Maybe the recommendation is to bet against the team.
“That kind of stuff encourages what we discussed earlier, which is the illusion of control,” he said.
This is why all three researchers embarked on these studies, to provide crucial data on gambling to inform lawmakers who — to be honest — may be swayed more by the tax revenue sports betting provides. But citizens who get themselves into too much debt or don’t save for retirement become a “social cost burden” down the road, Balthrop said.
“There is a trade-off here,” Proserpio agreed.
Australia offers a blueprint, recently implementing ways to slow the betting process to combat those ruinous consequences. But time is ticking in the US as the sports betting industry evolves and grows.
Lawmakers in Missouri and Oklahoma have introduced bills to legalize the industry, while two Democratic congressmen this month introduced a bill that would allow the federal government to regulate advertising, bet-making, and artificial intelligence in the industry.
“I’d like to think that you guys over the pond have more time to reduce harm, but in reality, I don’t think that’s going to be the case,” Torrance said. “I think, in fact, it’s going to mirror the UK where we have lots of gambling harm.”
In other words, don’t bet on it.
Janna Herron is a Senior Columnist at Yahoo Finance. Follow her on X @JannaHerron.
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Finance
Financing opportunity: Q&A with Harold Pettigrew on the future of the CDFI Sector – Kresge Foundation
As the community finance field enters a new era—shaped by economic uncertainty, shifting capital flows, and growing calls for accountability—how can CDFIs prepare for what’s ahead? The Kresge Foundation spoke with Harold Pettigrew, the president and CEO of the Opportunity Finance Network (OFN) to help answer that question. This article is part of a series highlighting the impact of CDFIs and how the sector is adapting to the current environment.
MD: CDFIs play a unique role in our financial ecosystem, often serving communities that mainstream banks overlook. Why are CDFIs so critical for advancing economic growth and creating opportunities in underserved communities?
HP: In every corner of America, CDFIs show that impact and financial performance aren’t at odds—they reinforce each other. We address market gaps and go where traditional capital doesn’t: listening first, solving for need, and providing capital to people and financing projects that strengthen families and communities. Whether it’s a small business on Main Street or a housing development in a rural town, CDFIs make investments that build wealth and create opportunities that reach people and communities that need it most.
MD: CDFIs seem to have broad support in Congress, even when some administrations have looked to reduce funding or support. Is bipartisan support materially different today? What role has OFN played in telling the CDFI story and maintaining that support?
HP: Bipartisan support for CDFIs remains strong because our work cuts across political divides — we’re about creating jobs, building businesses and revitalizing communities. What’s different today is the urgency and scale of the need, and the growing recognition that CDFIs are essential partners in solving some of our nation’s toughest challenges. OFN and CDFIs tell real stories of impact—stories of people across the country whose lives and livelihoods have changed thanks to the capital provided by CDFIs. Through advocacy, research, and direct engagement with policymakers, we’ve elevated a clear, consistent message: For over 30 years, CDFIs have delivered results addressing market gaps in providing access to capital to communities across the country.
MD: Beyond federal funding concerns, what are the current challenges and needs CDFIs are facing in their day-to-day efforts to support communities?
HP: CDFIs are navigating a complex economic environment— rising interest rates, tighter capital markets, and growing community needs are stretching our resources like never before. Many CDFIs are being asked to do more with less, while also investing in their own operations to scale effectively and sustainably. OFN is working to develop diverse pools of flexible capital, make deeper investments in talent and technology, and new policy frameworks that support and recognize the unique value CDFIs bring. The demand is clear — what’s needed now is bold investments to meet the moment and craft new solutions for the future.
MD: Philanthropies and community development departments of banks and insurance companies have always been crucial partners for CDFIs — how can they best support and invest in CDFIs right now?
HP: Our partners in philanthropy and financial services have been critical to the success of CDFIs, and now they have a critical opportunity to strengthen the CDFI industry for the future. That means moving beyond transactional grantmaking to long-term, trust-based partnerships. It means offering flexible, risk-tolerant capital that lets CDFIs innovate and expand, and it means investing in the infrastructure — people, systems, data — that helps us operate at scale.
MD: What keeps you optimistic about the future of the CDFI sector?
HP: What keeps me optimistic is the impact and commitment I see every day, from the entrepreneurs we finance, to the communities we serve, to the CDFI leaders innovating with courage and conviction. The sector is growing, diversifying and deepening its impact. We’re not just responding to the moment — we’re helping define the future of expanded access to finance and financial services. And with every new loan, every new partnership, every life changed, we’re proving that when we expand access to opportunity — we don’t just finance projects, we shape the future of communities across the country.
Harold Pettigrew is the President and CEO of Opportunity Finance Network (OFN)
Derek Kudsee is a veteran of the enterprise software industry, with senior leadership roles at industry giants such as SAP, Salesforce, and Microsoft under his belt. So, when he took the helm as the new Managing Director for Unit4 Financials by Coda, ERP Today sat down with Kudsee to discuss his vision for Coda, the promise of agentic AI to make work feel lighter for finance teams, and his mission to transform the classic system of record into a dynamic system of intelligence for the Office of the CFO.
What was it about the opportunity at Unit4, and specifically the challenge of modernizing Coda, that convinced you to take this role?
A rare combination of having a deeply trusted platform and a clear opportunity to reimagine the finance function drew me to Unit4, and specifically the Coda business. Some of the largest enterprise customers have been running on this platform for decades. I’ve been brought in to help these finance teams run more efficiently and provide greater insight through agent-driven automation. We live in a world where technology has converged in our consumer and professional lives. Therefore, modernization is not only about addressing complex systems, but also about enhancing the user experience. This combination of running a deeply trusted platform, reimagining its capabilities in an AI-driven world, and modernizing the user experience was attractive.
Unit4 Financials by Coda’s goal is to deliver an “AI-fueled office for the CFO” using agentic AI. How will a finance team using Coda experience this in their day-to-day work?
When one thinks of an AI-fueled Office of the CFO, it’s about having agents deep inside those finance processes that will suggest, explain, and act within guardrails that finance teams can set. The work should feel like the machine is performing tasks that were previously done manually or laboriously.
A simple example is in an accounts payable department. An agent can automate everything from invoice capture using AI-driven OCR, verify that the invoices are within policy, queue them for approval, send them to the respective individuals, and flag exceptions along the way. Users can see how the work feels lighter because the machine handles everything from capture to the final stage, including payment release.
How do the AI functionalities offered by Coda differ from what competitors are offering right now?
Many vendors today have a finance module. However, we aim to be the best standalone financial management system, not a generic suite. We’re not trying to be finance because we want to sell an HR or CRM system. That means we need to embed intelligence deeply within the finance processes so that the software acts, takes action, and performs activities for the finance function. For that, the agentic AI needs to operate with autonomy, understand financial context, and learn from user behavior.
Moreover, fundamentally, Coda has always been built on a unified financial model. We’ve never had Accounts Payable separate from Accounts Receivable that needed to be consolidated. Our AI works on clean, structured data from day one, and that’s the foundation for accuracy. We don’t need to chase hype to incorporate AI. We’re going to redefine the finance function with AI at its core.
How do you plan to balance the introduction of these cutting-edge innovations without disrupting the core stability that Coda is known for?
The safest way to modernize finance is to add certainty around the core, rather than disrupting it. Our core is why customers have been running Coda for 20-30 years. Thus, stability is not a nice-to-have; it’s non-negotiable. Our customers run mission-critical processes, and that trust is sacred to us. Therefore, every innovation we deliver, whether it’s UX modernization or AI, will be built on one simple principle: if it compromises stability, we don’t build it. We don’t ship it.
With that rock-solid foundation in place, we can layer intelligence and usability on top. While some software providers are still determining the stability of their platform, we can offer customers the best of both worlds. They’ll have the reliability they’ve counted on for decades, and now we bring them the innovation they need to stay ahead.
What This Means for ERP Insiders
Your biggest enemy is decision latency. According to Kudsee, the primary challenge for modern finance is the gap between a business event occurring and the ability to respond intelligently. This decision latency, caused by fragmented data, batch processes, and manual workarounds that are standard in traditional ERP environments, prevents finance from being a proactive and strategic partner. Coda’s goal is to shrink that gap from weeks or days to near-real-time.
Shift the ERP mindset from system of record to system of intelligence. For decades, the primary function of ERP finance modules has been to record transactions accurately. This is no longer sufficient, as Kudsee notes. A modern financial platform must function as a system of intelligence that not only records data but also analyzes, predicts, and automates actions within core financial processes, effectively acting as the intelligent brain of the CFO’s office.
Prioritize financial depth over suite breadth. Kudsee suggests that the single ERP for everything strategy can result in a finance module that is a jack-of-all-trades but master of none. The alternative approach is to prioritize depth and best-in-class functionality for the critical finance function. Instead of settling for the generic finance module within a larger suite, consider how a dedicated platform like Unit4 Financials for Coda, focused on deep financial control, insight, and automation, can deliver more agility and tackle core challenges, such as decision latency, more effectively.
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