Personal bankruptcy filings in the US have been rising 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 revised in 2025, when states shift from in-person sports gambling to mobile sports gambling, the likelihood of individuals filing bankruptcy increases by an average of 25%.
For bankruptcy attorneys, who see their caseloads filling with clients in their 20s and 30s, these numbers match what they see every week.
Florida bankruptcy attorney Chad Van Horn says about 15% of his current clients are carrying gambling-related debt and it accumulates faster than any other financial problem he handles. “Debt grows incredibly rapidly because people are not gambling with cash; they are gambling with borrowed money,” Van Horn said. “It’s almost a straight line to the max.”
A 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 30s filed for Chapter 13 after accumulating nearly $50,000 from online gambling and falling behind on rent while continuing to gamble, ultimately facing eviction.
Van Horn points to microbetting, placing small, repeated bets during a live sporting event, as the mechanism most associated with runaway debt among his customers. The stakes seem trivial in isolation. Not total. “They’re betting hundreds of dollars an hour and they don’t really know it, because they’re betting $10 here, $20 there, and apps make it so easy,” he said.
North Carolina bankruptcy attorney Ed Boltz has tracked a similar increase, with clients quickly racking up $20,000 to $40,000 in credit card debt through online sportsbooks. Even customers who don’t use credit cards directly for betting run into trouble: They divert their pay checks to gambling and transfer everyday expenses to the card, which is linked separately.
The Federal Reserve Bank of New York published a staff report that found that states that have legalized mobile sports betting have seen an increase in credit delinquency rates, especially among borrowers under the age of 40.
The UCLA-USC-Harvard study reinforced that picture, finding that credit card delinquencies increased by nearly 25%, auto loan delinquencies increased by 27%, and loans sent to collections increased by 9% after mobile betting legalization.
Researcher Kavi Larson told Business Insider that the people suffering the worst outcomes were already economically vulnerable before legalization arrived.
According to researcher Poet Larson, those most affected were those who were economically at risk even before legalization.
According to a survey conducted by Northwestern Mutual in 2026, 32% of Generation Z participants said they participate in or are thinking about participating in sports betting and prediction markets, while only 24% of Millennials expressed similar sentiments, making them the generation most likely to seek out higher-risk financial instruments.
Since the Supreme Court gave the green light for states to begin the legalization process in 2018, nearly 40 states have legalized some version of sports betting, and the amount wagered has exceeded half a trillion dollars. For the lawyers tasked with dealing with the fallout, the flood shows no signs of abating. “It’s incredible how quickly people can get involved,” Boltz said.
