Lower credit scores, increased bankruptcies, more debt sent to collections, and more incidents of domestic violence tied to local team losses.

That’s what Minnesotans would be inviting if the Legislature legalizes sports betting, according to authors of recent studies on wagers, who appeared at a hearing of the Senate Finance committee Wednesday.

In 2018, a Supreme Court ruling repealed a law that had long banned sports betting nationwide, except in Nevada. Since then, 38 states and the District of Columbia have legalized the sports wagers, and a growing number of consumers are placing bets using mobile apps.

The researchers described a host of negative outcomes in states that have legalized sports betting in recent years. 

In the seven legislative sessions since the Supreme Court effectively legalized the spread of sports betting, the Legislature has not repealed the state ban on the practice, despite bipartisan support for — and opposition to — legalization.

Sen. Matt Klein, DFL-Mendota Heights, who has carried bills to legalize sports betting in recent years, announced in a press release Tuesday that he would introduce another sports betting legalization bill when the legislative session begins next week.

Klein’s bill would create a Minnesota-based problem gambling hotline; prohibit advertisements targeting minors or problem gamblers; ban push notifications that promote wagering; require a three-hour waiting period between the time funds are deposited and when they can be used; and prohibit prop bets on college sports. (Prop bets are based on occurrences other than the final outcome of the game, such as an individual player’s performance, or even the outcome of a single play.) 

Legal gambling advocates like Klein argue that sports betting will happen regardless of the law because gamblers will find ways to wager using offshore operations, but a legal, regulated regime would give Minnesotans more protections and help when they need it. 

UCLA professor Brett Hollenbeck presented his analysis of credit scores, debt consolidation and collections data, bankruptcies, car loan delinquencies and more. Across nearly every metric, residents of states that legalized sports betting had worse outcomes than those in states that still prohibit sports gambling.

Using bank and credit card transaction data, Scott Baker of Northwestern University and his colleagues found that people who bet on sports are more likely to overdraw their accounts, have higher credit card balances and invest less than those who do not gamble on sports. That work takes the population-level findings of Hollenbeck’s study and confirms that on an individual level, sports betting leads to poor financial outcomes. 

Sports betting legalization has also increased certain kinds of intimate partner violence, according to Emily Arnesen and Kyu Matsuzawa of the University of Oregon. Studies have long documented that domestic violence increases when a local sports team loses — particularly when the local team was expected to win. Arnesen and Matsuzawa estimated that sports betting legalization increased incidents of intimate partner violence by around 9%.

Sports betting opponents argue that the large companies operating sports books employ predatory tactics to ensnare gamblers and encourage heavy gamblers to keep making bets. For example, the major mobile sports books have “VIP” programs for users who spend a certain amount of money. Once a user reaches VIP status, they are assigned a “host” — a real person who messages with the user to encourage wagering and offer bonuses, incentives and prizes. 

Matt Litt, a New Jersey-based attorney who specializes in litigation against sports books and gaming companies, said he spends many of his days reading text messages between gamblers and VIP hosts. Hosts send users trophies and offer all-expenses paid trips to users who spend a certain amount of money, he said.

“The addiction is crystal clear. And if I can see it, the VIP host certainly knows it,” Litt said, pointing out that many states require customer-facing employees of casinos and sports books to know the signs of problem gambling. “The number one sign you’re seeing through these messages with a VIP host is a gambler begging for money, saying, ‘I had a bad night last night, can you please help me?’”