Study reveals online sports betting debt surge in gen z

Personal bankruptcy filings in the US have been climbing since their COVID-era low in 2022, and researchers now have a specific culprit in their sights. According to research conducted by scientists at UCLA, USC, and Harvard, published in 2024 but amended in 2025, the probability of a bankruptcy filing by individuals increases by an average of 25% when states shift from in-person sports gambling to mobile sports gambling.

For bankruptcy attorneys watching their caseloads fill with clients in their 20s and 30s, the numbers match what they see every week.

Florida bankruptcy attorney Chad Van Horn says roughly 15% of his current clients are carrying gambling-related debt and that it accumulates faster than almost any other financial problem he handles. "The debt builds incredibly fast because people aren't gambling with cash; they're gambling with borrowed money," Van Horn said. "It's almost a straight line to max out."

One client in his mid-20s built up $25,000 in credit card debt through a daily sports betting habit before filing for Chapter 7 bankruptcy protection. Another client in his early 30s filed for Chapter 13 after accumulating around $50,000 mostly from online gambling and fell behind on rent while continuing to bet, eventually facing eviction.

Van Horn points to microbetting placing small, repeated wagers throughout a live sporting event, as the mechanism most commonly linked to runaway debt among his clients. The bets feel trivial in isolation. The total is not. "They're betting hundreds of dollars per hour and not really knowing it, because they're putting $10 here, $20 there and the apps make it so easy," he said.

North Carolina bankruptcy attorney Ed Boltz has tracked a similar surge, with clients arriving carrying $20,000 to $40,000 in credit card debt accumulated rapidly through online sportsbooks. Even clients who do not use credit cards directly for betting end up in trouble: they route their paycheques to gambling and shift everyday expenses onto cards, which compound separately.

The Federal Reserve Bank of New York published a staff report finding that states which legalised mobile sports betting saw credit delinquency rates spike, particularly among borrowers under 40.

The UCLA-USC-Harvard study reinforced that picture, finding roughly 25% increases in credit card delinquencies, 27% increases in auto loan delinquencies, and a 9% rise in debts sent to collections following mobile betting legalisation.

Researcher Poet Larson told Business Insider that the people absorbing the worst outcomes were already financially vulnerable before legalisation arrived.

According to researcher Poet Larson, it was those who were financially at risk even before legalisation who were most affected.

According to a survey conducted by Northwestern Mutual in 2026, 32% of Generation Z participants said that they partake in or are thinking about sports betting and prediction markets, while only 24% of millennials expressed similar sentiments, making them the generation most likely to seek high-risk financial instruments.

Since the Supreme Court greenlighted the legalisation process for states to start in 2018, almost 40 states have legalised some version of sports betting, and the amount being wagered has exceeded half a trillion dollars. For the lawyers tasked with handling the consequences, the flood shows no signs of easing up. "It's been incredible how fast people can get involved," said Boltz.