Legal sports gambling has ascended rapidly in the United States and the consumers in the country seem to embrace it. However, a new study rocks the boat by suggesting that this surge in interest might be at the cost of stock investment.
It also presents the estimated values of the elasticity for ‘bet on sports’ suggesting that for each dollar spent on this activity, the value of net investments of a household is reduced by about $2.
This research team of five academic scholars noted: ‘Our results indicate that millions of consumers gained access to online sports betting, but at the same time, lost their attachment to the equity markets and experienced worsened financial constraints.’
New Jerseyans and other Americans got a taste of legal sports betting in 2018 when the Supreme Court struck down a federal law prohibiting it. This was done at the discretion of the governor of each state and since then 38 states have legalized the activity.
Surge in Sports Gambling
Now that gambling is as easy as three clicks of a mouse or alternatively downloading an application, the world has seen billions of dollars change hands. The fact is evident on the Data that has been sourced from the ‘Sports Book Review’ Here, the share increases from $1. 1 billion was wagered in January 2019, the figure rose to $14 billion in the same month this year.
The current average bet per HH is $ 1,100 or $280 per quarter and this is growing by $ 25 per quarter, according to the study.
Net investments decreased significantly, that is, in two to three years after the legalization of sports betting in a state, it declined to nearly 14%, according to the researchers.
The study also noted that the impoverished household spends a larger amount of their budget on the sports gambling. Consequently, they face manifestly worse effects of the adverse changes in financial conditions.
The researchers explained that “these households are more likely to withdraw from their investment portfolios to finance their betting activity than households in relatively better economic standing”. “Since sports betting is negative expectation activity, this study a shows that legalizing of sports betting can actually plunge individuals into more difficult times financially. ”
The same other recent study corroborated similar worries observing that figures of credit scores in places where sports betting is legal have declined by 1%, whereas debt collection has risen by 8% and bankruptcies by 28%.
“It’s never enough,” said Michelle Malkin, the director of East Carolina University’s Gambling Research & Policy Initiative. “You’ve got to keep on gambling. So it’s this cyclical thought pattern of, ‘I can stop what’s wronging me if only I can go on gambling and win again’.”
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