Rob Minnick fell into debt for the first time at age 19. Sitting in the back of his classroom during a freshman-year math class, the now-27-year-old placed a wager on the New York Yankees during an MLB spring training game that pushed him into the red. He told his parents it would not happen again.

“Then it would happen five more times over the next five years,” he told Fortune.

Minnick later gambled away unemployment checks from his college campus job while waiting out the COVID lockdown at his parents’ house. When the stock market tumbled at the start of the pandemic, he pulled money from his stock portfolio and sold his Bitcoin and Ethereum, using the proceeds to fuel a growing gambling addiction.

“My thought was, I need to get this money out and make it back right now, and then I’ll buy double what I just had, and then I’ll hold it,” he said.

Minnick now says he recognizes the short-sightedness of those decisions, but his experience is far from isolated. A new wave of studies suggests that more Americans are selling stocks and draining savings to support sports betting habits, often ending up in financial distress. The pattern matters because sports betting is no longer a niche habit confined to casinos or office pools; since apps made wagering easier to access from a phone, it has become part of the broader consumer and investing landscape.

Since the U.S. Supreme Court overturned the Professional and Amateur Sports Protection Act in 2018, effectively legalizing sports betting, U.S. sports betting revenue has soared from $441 million in 2018 to more than $16.6 billion in 2025, according to Sportsbook Review. The industry has also produced billion-dollar deals between leagues and online platforms such as DraftKings and FanDuel. Americans placed about $30 billion in legal bets during the 2025 NFL season.

For bookmakers and the wider sports industry, that has been a windfall. For many gamblers, it has become a financial drain.

“This is a money-losing proposition for most of these individuals,” Scott Baker, an associate professor of finance at Northwestern University’s Kellogg School of Management, told Fortune. “On average, this is representing a drain to people’s finances.”

Baker authored a study, set to be published next month in the Journal of Financial Economics, that found household betting increased by $1,100 per year in states that legalized online sports betting. The study also found a nearly 14% decline in net investments among households after legal online sports betting was introduced.

Baker said bettors are not simply shifting money from one entertainment category to another. In many cases, they are also spending more on attending games or watching sports in restaurants and bars, creating a compounding effect on household budgets.

“We’re seeing that this gambling plus increases in consumption are both detracting from some of the longer run equity investments—or positive, easy, risky investments that people have been making—and tend to put more pressure and strain on their budgets in general,” Baker said.

Brett Hollenbeck, a marketing professor at the UCLA Anderson School of Management, said his research supports Baker’s conclusions. His paper found that credit scores fell an average of 0.3% in states that legalized sports betting four years after it became legal.

Using consumer credit data from the 38 states that have legalized sports betting in some form, the study also found higher rates of bankruptcy, debt collections, debt consolidation loans and auto loan delinquencies after legalization.

“What’s really unique about this is not just that sports gambling is a big, important industry,” Hollenbeck told Fortune. “But it gives us a window into how gambling causes people’s behavior to change.”

The trend may be widening. Betterment’s 2026 Retail Investor Survey, released earlier this month, found that among 1,000 retail investors ranging from Gen Z to Baby Boomers, more than one-quarter of Gen Z investors treated sports betting as part of their long-term financial strategy. More than half said they redirected money originally intended for stocks into sports betting instead.

Sounding the alarm on the sports betting era

Experts say these behavioral shifts are worrying because sports betting’s expansion may be increasing the prevalence of gambling disorders.

“I’ve seen people end up losing their houses, losing everything—not just because of sports wagering, just because of where gambling disorder will take them,” Michelle Malkin, a criminal justice and criminology professor at East Carolina University, told Fortune.

Because legalized sports betting is still relatively new, its full impact on gambling addiction is difficult to measure, she said. But early research is beginning to show the contours of the problem. In Connecticut, which legalized online sports betting in 2021, 71% of state legal gambling revenue comes from problem or at-risk gamblers, who make up just 7% of residents, according to a Gemini Research study conducted by University of Massachusetts professor Rachel Volberg.

Malkin said problem gambling will likely worsen if sports betting remains under-regulated.

“We can’t be winning everything off the backs of the people who are suffering most,” she said.

At the same time, states that have legalized sports betting and can tax winnings heavily have benefited from the industry. In July alone, the Connecticut Lottery Corporation, the state’s official lottery, generated $587,000 in gross revenue from more than $4.8 million in patron winnings from sports retail wagers. A spokesperson for CT Lottery told Fortune that the revenue goes to the state’s general fund, which supports public health, libraries and public safety.

Advocates for stricter gambling regulation argue that this is only part of the story.

“It’s a marriage of the sports leagues, teams and players, media, online technology companies, the gambling companies—all under the partnership with the state government,” Harry Levant, a clinician and director of gambling policy with the Public Health Advocacy Institute, told Fortune.

Levant said the rise of sports betting cannot be explained by legalization alone. The growth of online platforms and apps, he argued, has made betting fast, frequent and easy, delivering the product with “instantaneous” gratification.

“What has happened since sports betting has been legalized—and now online casinos in seven states—is that the product is delivered as rapidly and as instantaneously as possible,” he said. “You can bet on the speed of every single pitch in every single baseball game.”

Sports betting apps also use aggressive sign-up bonuses and other incentives to encourage first-time wagers, while convenience helps keep users engaged. That combination, experts say, makes it easier for betting behavior to spill into other parts of a household’s finances, including savings and investment accounts.

“It gives them just another activity they can do on their phone,” Hollenbeck said.

What the gaming industry is doing

As concern about gambling disorder grows, online sportsbooks and their partners have expanded responsible gaming initiatives.

The NFL has a $6 million, three-year partnership with the National Council on Problem Gambling to increase the visibility of resources and educational materials.

The American Gaming Association (AGA) has highlighted efforts to promote responsible gaming tools such as wager and deposit limits. DraftKings offers a stat sheet that lets users track spending, while FanDuel has partnered with the financial literacy nonprofit Operation HOPE. Both companies are members of the Responsible Online Gaming Association (ROGA).

“Currently, there is a misinterpretation that responsible gaming programs are intended only for those with a gambling problem, causing these programs and tools to be underutilized or ignored,” Jennifer Shatley, executive director of ROGA, told Fortune. “In reality, the target audience for [responsible gaming] programs is the entire customer base, as these programs are designed to assist players with keeping gaming within their own personal limits.”

The industry, however, questions early findings that link sports betting legalization to changes in consumer finances. Shatley said legal sports betting is still in its infancy and that financial data collected after legalization may be confounded by the pandemic.

Joe Maloney, senior vice president of strategic communications at AGA, said previous gambling data—though based on physical casinos rather than online platforms—and financial outcomes such as bankruptcy have not shown a significant relationship. He also said consumers treat sports betting as entertainment rather than an investment.

“Consumers in today’s legal, regulated market for sports wagering view this activity as a good value for their entertainment dollars, not as an expected, positive value investment,” Maloney said.

Who are Gen Z’s big spenders?

Minnick said his own gambling habit accelerated after sports betting was legalized in 2018 and then spread through a growing number of apps that seemed designed to target him and his friends.

He and his college peers reflected sports’ largely male fan base, and he said it was obvious that betting companies were aiming their marketing at that audience.

“It’s pretty obvious who it’s trying to appeal to if Vanessa Hudgens is walking you through [a virtual casino], right?” Minnick said, referring to a Disney Channel actor from the early 2000s who recently appeared in a BetMGM advertisement. “It’s not a big secret.”

While sports betting can affect anyone, Hollenbeck’s early findings suggest that men—who experience gambling disorders at nearly twice the rate of women—and especially Gen Z men, are at greater risk of financial trouble tied to gambling. He said that may be because they are more interested in sports gambling and receive targeted advertising from betting platforms.

The “Oracle of Wall Street” Meredith Whitney has gone so far as to say that young men’s interest in sports betting could affect the housing market because they are less interested in marrying and moving out of their parents’ homes.

“It’s all young men [betting on sports],” she said in a December 2023 CNBC interview. “And I dovetailed that with Pew Research which says that 63% of young men are single. And that’s the highest it’s ever been. And 50% of those young men have no interest in dating, not even casually.”

Minnick, who says he has not placed a bet in a couple of years, is now working against what he sees as the risks facing Gen Z men who are drawn into sports betting. He is a full-time content creator and works with teletherapy firms and state councils to design marketing for gambling disorder resources aimed at young people.

“The root goal of everything is to try to help other people avoid making the same mistakes that I made,” he said.

He has quit sportsbook apps and stopped investing altogether, saying he fears drifting back into risky options trading that could resemble gambling. Today, he says, he is trying to stay on firmer financial ground.

“At this point, the only thing I have is a solo 401(k),” he said. “And I haven’t even funded it yet.”

A version of this story was published on Fortune.com on Aug. 27, 2024.