Impact of Online Gambling on Credit Card Debt
Session Title
Financial Impacts: Debt, Spending & Behavior
Presentation Type
Paper Presentation
Start Date
28-5-2026 12:00 AM
Abstract
Since 2018, the legalization of online gambling in the USA has expanded rapidly, raising concerns about its financial impact. This paper examines how legalization affects credit card debt and other financial outcomes using the Survey of Income and Program Participation (SIPP) and Consumer Expenditure Surveys (CEX). Employing a staggered difference-in-differences framework with a Poisson pseudo-maximum likelihood estimator,I find that legalization of online gambling leads to an increase of 11.6% in credit card debt. The increase is caused by existing debt holders. No effects are found for income or savings, while the heterogeneity analysis reveals stronger impacts among households with low-educated and black household heads. These findings reveal that while online gambling generates tax revenue and promotes regulated entertainment, it also exacerbates financial vulnerability for disadvantaged groups. The results underscore the need for targeted consumer protections, debt management tools, and policies that balance fiscal benefits with financial stability.
Impact of Online Gambling on Credit Card Debt
Since 2018, the legalization of online gambling in the USA has expanded rapidly, raising concerns about its financial impact. This paper examines how legalization affects credit card debt and other financial outcomes using the Survey of Income and Program Participation (SIPP) and Consumer Expenditure Surveys (CEX). Employing a staggered difference-in-differences framework with a Poisson pseudo-maximum likelihood estimator,I find that legalization of online gambling leads to an increase of 11.6% in credit card debt. The increase is caused by existing debt holders. No effects are found for income or savings, while the heterogeneity analysis reveals stronger impacts among households with low-educated and black household heads. These findings reveal that while online gambling generates tax revenue and promotes regulated entertainment, it also exacerbates financial vulnerability for disadvantaged groups. The results underscore the need for targeted consumer protections, debt management tools, and policies that balance fiscal benefits with financial stability.