Gambling is a complicated issue in America.
The practice is federally legal in the U.S., but heavy restrictions at the state level limit the scope of the gaming industry in states.
Only two states, Nevada and Louisiana, allow casino-style gambling statewide. Other states like Maryland and New York allow casinos in certain jurisdictions, and other states like North Carolina and Connecticut offer them on tribal lands.
But the states that don't allow casinos aren't opposed to all forms betting as 45 states (plus Washington, D.C., Puerto Rico, and the U.S. Virgin Islands) have state sanctioned lotteries.
Online sports betting has exploded in popularity since the U.S. Supreme Court struck down the Professional and Amateur Sports Protection Act (PASPA) four years ago and we are just starting to learn more about the demographic of people who participate in this new form of gaming.
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Wealthier and More Worried
Mobile sports bettors tend to be wealthier than the general population, with 54% earning $100,000 or more a year, according to a new survey from credit reporting agency TransUnion.
But while the majority of online sports bettors appear to be on strong financial footing based on their incomes and savings, a higher percentage of the nearly 3,000 gamblers surveyed also said they have trouble paying bills and are using short-term credit services like payday loans, compared to the general population.
“At face value, most of the consumers engaging in mobile sports betting can likely afford to do so,” said Declan Raines, head of U.S. Gaming at TransUnion.
“At the same time, our findings demonstrate how important it is, especially during a time of economic uncertainty, that operators utilize comprehensive data to identify both resilient and distressed consumers."
Nearly 70% of mobile sports bettors saw their income increase in the previous three months, compared to 32% of the total population.
On the other hand, 79% of mobile sports bettors were concerned about their ability to pay current bills and loans in full, compared to just 52% of the population.
This uncertainty is resulting in more timidity when it comes to placing bets.
"You definitely see intent to alter their spending habits based on on inflation. The ability pay loans and bills. Consumers are likely to move away from discretionary activities in the current environment," Raines told TheStreet.
That could be bad news for online gambling platforms like Drafkings (DKNG), BetMGM (MGM), Caesars (CZR) and Barstool (PENN).
Downside of Gaming
There are pitfalls built into online sports betting of which bettors should be aware.
"Many mobile sports betting websites and apps allow deposits using credit cards, a high-interest form of revolving credit, so it's imperative for sports bettors to understand how to gamble responsibly," TransUnion said.
The bedrock rule of any game of chance is that the house always wins and that truism can bring out the worst in people with addictive personalities.
"People with gambling problems often have many of the same risk factors that predispose individuals to other addictive behaviors," the National Center for Responsible Gaming says.
Overall men tend to spend more money on gambling than women. And while people in higher socioeconomic groups tend to spend more money on gambling, those with lower incomes spend a higher percentage of their income of gambling, according to recent studies.
