Sports Bets Hitting $220 Billion Has Financial Advisers on Alert

Nathaniel Conrad admits he’s lost a lot of money gambling on sports. When football season is underway, though, he can’t resist placing a few bets.

Starting last year, he threw down at least $300 on games he watched, on top of four fantasy football leagues — each with $100 buy-ins. These days, the 41-year-old Arizona resident tries to limit the wagers to $5.

“You can’t even go to a fast food store now and get something for $5,” said Conrad, who works in video production.

With the proliferation of mobile betting apps like FanDuel and DraftKings, plus betting kiosks at stadiums across the country, even small bets make for big business. The US sports gambling industry has seen more than $220 billion wagered in the five years since the Supreme Court essentially legalized what was long an underground aspect of fandom.

Financial advisers are among those on alert for the consequences of this massive shift in how average fans engage with their favorite teams. It’s especially critical as data shows excess pandemic savings were extinguished earlier this year.

Early studies have determined that online betting is adding to consumer stress. Another research paper found that some Americans are taking money out of their brokerage accounts to fund wagers. And in extreme cases, losses from gambling can contribute to auto loan delinquencies and bankruptcies.

Bettors can now risk money on everything from Korean baseball to Chilean soccer. But for much of the US, the National Football League is the main event. The season’s opening contest between the Kansas City Chiefs and Baltimore Ravens on Thursday night came down the final play, with a tidal wave of wagers hanging in the balance in the latest example of why bettors gravitate to football. The action will continue Friday with the Eagles and Packers playing in Brazil and there’s a slate of games on tap Sunday.

One industry group estimates Americans bet $26.7 billion on last year’s NFL season, and the figure is expected to grow. The overwhelming majority will lose their money.

“Part of the motivation to gamble is the perception that you can make a quick buck like with crypto or the stock market,” said Keith Whyte, executive director of National Council on Problem Gambling. “There’s a lot of risk especially among these young male sports bettors who see it as a good way to make money. In the long term, it’s incredibly rare.”

Betting Explosion

Just ten years ago, US gamblers had to make their way to Las Vegas or tap an illegal bookie to bet on sports. But the Supreme Court in 2018 overturned a decades-old law that prevented state-sanctioned sportsbooks, allowing the growth of mobile betting apps. It’s similar to how retail-friendly stock trading platforms like Robinhood have democratized investing, making it easier than ever to bet money with a few clicks and swipes on a mobile phone.

Ads and promotions are now everywhere in stadiums and on TV, integrating gambling into the way many NFL fans take in the sport. Football enthusiasts who used to meet up at a bar now text group chats about a contest’s key moments and how their wagers — on everything from the final score to a specific player’s performance — are doing.

Sports fans often think they have an edge because of their perceived knowledge of the leagues and players, but in fact, most end up losing, Whyte said. Data on percentage of winning bets are sparse, but by one measure, only 3% of sports gamblers are profitable long term.

Every week during NFL season, Sam Wagman sets aside a couple hundred dollars for his wagers. The 29-year-old, who lives in West Palm Beach and works in sports media, has a group chat with his friends solely for talking about betting.

He looks forward to the start of football all year.

“It’s always a long six months between the Super Bowl and the Hall of Fame game,” he said, referring to the preseason contest that kicks off the NFL season each August. “I’m really happy it’s back."

When he first started sports betting in college, Wagman said he was wagering $100 per game — too much, in retrospect. He’s gotten better at self-restraint, but still likes the feeling of rooting for a specific outcome. It makes him more invested, he said.

Not everyone can exercise self-restraint, especially as sportsbooks offer generous bonuses and flashy promotions. A study by researchers at the University of Kansas found that after placing an initial wager, 70% of sports bettors deposit money at least two more times, and almost 40% bet more than ten times.

That was the case for Anthony Ho, an insurance product analyst from Virginia. In September 2021, he saw a TV ad for a legal sportsbook offering a deal he couldn’t pass up: new bettors who put in $5 would get an additional $200 in credits. The newbie felt like everything he touched “turned to gold” after winning 17 bets in a row, he said in an interview.

Ho said his wagers gradually grew from $5 to more than $7,000. He began to wake up at 7 a.m. before work to bet on live soccer games in Australia and Japan, chasing the massive payouts he saw other bettors win online.

By 2024, the 40-year-old said he had maxed out his credit cards, took out an installment loan with payday lenders and was staring down $25,000 in debt. Ho finally came clean to his wife after he was sued by a creditor who served him at his house in June. Now, his wife is paying for their living costs.

“It’s that allure of winning the easy money. You can bet as it happens and I’m addicted to it,” Ho said. “Everyone has had that one big payout and you’re constantly chasing that.”