This September marked the second anniversary of the launch of legal sports betting in Kansas. While legal wagering on sports continues to expand across the country, researchers in Kansas joined forces to evaluate the impact of the activity.
The Effect of Betting on Vulnerable Families Is Greater
Legal online and retail betting arrived for Kansas residents aged 21 and older on September 1, 2022, following the legalization of the activity completed in May of the same year. Currently, there are several land-based sportsbooks and six mobile betting operators. Not unexpectedly, the giants DraftKings and FanDuel, along with other leading betting and gaming operators like BetMGM and Caesars have already established their presence in Kansas.
Now the results of a new study highlight the financial impact of legal wagering across the state. The study was conducted by researchers with the University of Kansas, along with Justin Balthrop, an assistant professor of finance, a report released by KOMU 8 reveals.
One of the key findings of the new research points to a decrease in investments by Kansas residents. In the words of Balthrop, the average decrease in investment savings by households across the state was approximately 14%. He added that the negative financial impact of betting on vulnerable households was greater.
“We find that households, on average, drop their investment savings by about 14%. We also find that the effect is more exacerbated for households which we call financially strained.“
Justin Balthrop, assistant professor of finance
Speaking about vulnerable households, Balthrop added that following the introduction of betting, they showed increased signs of potential financial distress and struggles. Such challenges would include an increase in credit card debt, over-drafting of accounts and other factors, the expert explained.
Understanding the Challenges Can Help Resolve Them
Balthrop revealed that the findings of the study do not mean that betting should be banned or that the activity is “unambiguously bad.” He explained: “It just means that we need to understand what’s going on, and this is one step in that direction.”
Per the study, betting did not replace other entertainment activities but rather was added to the list of such. Still, Balthrop acknowledged that while the study shed light on the financial impact of legal wagering, the side of betting that wasn’t evaluated may cause future concerns.
Currently, half of the states neighboring Kansas offer legal betting while the other half do not. While the activity is available in Nebraska and Colorado, Oklahoma doesn’t permit wagering on sports. On the other hand, Missouri residents are expected to vote for or against the legalization of betting on the upcoming ballot in November.
