No. 10 Asiaha James of the North Carolina State Wolfpack advances to the Sweet 16 round with a victory over the Michigan State Spartans in the second round of the 2025 NCAA Women’s Basketball Tournament at Reynolds Coliseum in Raleigh, North Carolina on March 24, 2025.
Lance King NCAA Photo | Getty Images
As March Madness nears its peak, sports betting is gaining momentum as well, but a new study finds that sports betting is having a negative impact on the financial stability of many households.
The American Gaming Association estimates that sports fans will bet about $3.3 billion through legal means on this year’s NCAA men’s and women’s basketball tournaments alone, a 54% increase over the past three years.
But as more states legalize mobile sports betting and a wider range of participants participate, the health of consumer credit is being undermined, a new report from the New York Fed finds.
The New York Fed said in a report that it has seen a “significant deterioration in repayment performance” in parts of the country where sports betting has been legalized, and warned of “spill-over effects” to nearby areas that have not yet legalized sports betting.
“Credit delinquencies by people under 40 have increased with the legalization of sports betting in states,” the report states.
Since the Supreme Court struck down the federal ban in 2018, more than 30 states have legalized mobile sports betting, resulting in more than $5 trillion in bets, according to the New York Fed.
Another 2026 paper by researchers at the UCLA Anderson School of Management, Harvard University, and the University of Southern California Marshall School of Management found that states with legal gambling increased the odds of filing for bankruptcy by 25% to 30%.
“Most Americans have very little margin for error when it comes to their finances,” said Matt Schultz, chief credit analyst at LendingTree. “While sports gambling may help you in that respect if you win, the truth is that it’s far more likely to hurt you than help you in the long run.”
AGA did not respond to requests for comment.
Credit scores show increasing strain
The New York Fed’s findings are not the only sign of deteriorating consumer credit health. The national average credit score continues to trend downward, according to another report released this week by FICO, which developed one of the scores most widely used by lenders.
The average score is now 714, down two points from last year, due to a resumption of student loan delinquency reporting and an increase in mortgage delinquencies, according to the report.
FICO scores range from 300 to 850. Generally a good score is 670 or above, a very good score is 740 or above, and anything above 800 is considered exceptional.
FICO also found that the so-called K-shaped economy has placed financial strain on some borrowers, while strengthening the financial position of others. More consumers are now scoring in the highest and lowest score ranges.
“At the same time, a record percentage of consumers are demonstrating strong and consistent credit behavior,” Ethan Dornhelm, head of score analysis at FICO, said in a statement.
The VantageScore report shows a similar trend.
The average VantageScore credit score in February was 701, about the same as last year. However, VantageScore’s research found that as financial pressures increase, some borrowers are gradually moving to lower credit limits, while the most credit-worthy borrowers are reducing their credit utilization rates, a key component of higher credit scores.
“Overall consumer credit health remains relatively resilient, as improvements in credit health among top-tier consumers outweigh deterioration among bottom-tier consumers,” the report said.
“The advice, of course, is to live within your means,” said Ted Rothman, senior industry analyst at Bankrate. “It’s okay to spend money on occasional treats,” he says, even when it comes to sports betting. “You just have to budget it.”
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