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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BURLINGTON, Vt. (WCAX) – Initial public offerings, better known as IPOs, may seem like big investment opportunities, but a financial adviser is warning they could be a risky addition to your portfolio.
Dan Cunningham of the investment management company One Day in July, said he recommends that people stay away when a company starts selling initial shares on the stock market.
Most recently, Elon Musk’s SpaceX became the biggest IPO ever, but Cunningham said people shouldn’t get caught up in the hoopla.
“They generate a lot of excitement, but when you look at long term results, IPOs have not been a good investment. So we really try to encourage people to stay away from the hype. You are really betting on the future and taking an enormous amount of risk by buying IPO shares in many cases,” Cunningham said.
According to Cunningham, the good news is that, over the long term, the market and most retirement funds that mirror it will balance out.
Copyright 2026 WCAX. All rights reserved.
DULUTH — The Duluth Homegrown Music Festival is seeking both new operational leadership and a solution to financial filing issues that caused the organization to lose its federal tax-exempt status, which it has not held since 2022.
The organization is currently operating as a taxable nonprofit, confirmed Don Ness, the former Duluth mayor who serves as president of Homegrown’s
board of directors.
Ness and the board are working to discern whether there might be any outstanding tax liabilities in the wake of an apparent filing lapse.
“It’s a serious matter that requires diligence to do things right, and to correct past oversight, and to make sure that we are in full compliance with all tax and regulatory requirements,” Ness said. “The board is 100% committed to that course of action.”
As the Duluth Monitor first reported, Homegrown had its federal tax-exempt status revoked in 2022 after failing to make required financial reports for three years. The Monitor also reported that Minnesota Attorney General Keith Ellison’s office has notified the organization it may be in violation of state law requiring the proper registration of soliciting charities.
Clint Austin / Duluth Media Group file photo
“All but one of us have been on for less than a year,” Ness said of the current board members. “We’ve been committed to saying, ‘hey, we need to improve the points of accountability.’”
The organization will also require new operational leadership. Co-directors Cory Jezierski and Dereck Murphy-Williams resigned earlier this month, after leading Homegrown through four successful festivals.
“My contract ended at the end of May, and I knew a few days later that I did not want to continue in that position,” Jezierski said. “Simply put, it was the best thing for my mental health. It’s a job that requires many, many hours and a lot of work, and it can be very stressful as well.”
Amy Arntson / Duluth Media Group file photo
Murphy-Williams did not respond to an interview request for this article, nor did preceding Homegrown director Melissa LaTour. According to LaTour’s
LinkedIn profile,
she was Homegrown director from 2016 to 2022.
Jason Beckman, a recent president who is no longer serving on the board, responded to a News Tribune email but did not provide an interview availability before this article went to press.
Ness does not believe the reporting lapses were due to any ill intent. He praised Jezierski and Murphy-Williams for their success managing festival operations. “They cared deeply about the festival,” he said. “It’s amazing to see that our community continues to support this really unique and special festival.”
“Those guys run a hell of a festival,” said Scott Lunt, festival founder and a current board member. “I think they needed help with bookkeeping.”
Clint Austin / Duluth Media Group file photo
By Jezierski’s account, issues with the festival’s tax status became apparent shortly after he became co-director. “We went to file taxes, they were rejected,” Jezierski said. “At that time we, of course, didn’t know why right away, but once we started pulling on that thread, we unraveled a whole lot of the problems that were going on.”
Jezierski said “it took a long time to try to get any sort of help” from the board, but said that by the time he and Murphy-Williams left the organization, “everything had been turned over to be reconciled” with a financial professional.
Ness, like Lunt, was deeply involved with Homegrown in its first decade but had not had an official role with the festival since then. After launching the festival in 1999 and running it on his own for several years, Lunt was “burnt out,” Ness remembered.
Derek Montgomery / Duluth Media Group file photo
After a transition period during which the festival was run in partnership with the Ripsaw newspaper, Homegrown established a nonprofit organization in 2006 with Ness as festival director. Ness subsequently stepped down when he was elected mayor in 2007.
By 2025, Ness was in his current position as executive director of the Ordean Foundation.
“I was approached by a couple of longtime music scenesters,” Ness recalled. “They said, ‘There are questions about (Homegrown’s) nonprofit status. There are questions about some governance issues. We’re concerned.’”
Ness agreed to join the board, and became president. The 2026 festival ran smoothly from an operational standpoint, but Ness found the financial reporting to be lacking.
Clint Austin / Duluth Media Group file photo
“The last board meeting that we had prior to the (co-directors’) resignations was intended to be an overview of the festival that was a month before,” Ness said. “I certainly felt very uncomfortable with how little financial information we were receiving.”
Lunt also joined the board in 2025, marking his first time serving in that capacity. He said the new board has been spending significant time addressing the accounting and reporting issues.
“Every year at Homegrown time I’m like, ‘I should get more involved,’ and then I don’t,” Lunt said. “Then this board thing came up, and it was kind of sold to me as, like, four meetings a year. I was like, ‘Oh, that’s perfect.’ And now we’re meeting weekly.”
Clint Austin / Duluth Media Group file photo
Although it’s unclear how the organization’s finances will look when the accounting and reporting issues have been fully addressed, along with any outstanding tax liabilities, both Ness and Lunt said they are confident the annual festival will continue without interruption.
“The organization will continue,” Ness said. “The festival will continue. Homegrown is in no danger in terms of its viability.” The financial documentation Ness initially received indicated budgeted revenues of about $140,000, against about $130,000 in expenses.
“Financially, I think we’re in a great spot. We have the money to hire the (financial) professionals, and we have (done so),” Lunt said. “We were hoping that we could get all this sorted out before it had to become more public.”
“We poured countless hours into this festival, and this is how it ends, with everyone talking about this,” Jezierski said. “It’s rough.”
“There’s a DIY ethos that is really at the core of Homegrown,” reflected Ness. “We’re throwing a music festival that isn’t waiting for some famous band from the East Coast to bless us with their presence. We are doing this on our own.”
Clint Austin / Duluth Media Group file photo
That DIY spirit also means “you’re kind of passing wisdom down from person to person, and sometimes that’s imperfect.” Ness continued. “The ways that we do things evolve over time, because it’s not a buttoned-down corporate sort of thing. That can create its own set of challenges.”
“It’s self-supporting,” said Lunt about the festival. “It’s widely volunteer-run. You do need to pay a couple people, obviously, to keep track of some things, but it’s going to be strong into the future. It’s gone through its bumps before.”
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