College Loan Payments May Have Effect On Sportsbook Industry

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When the U.S. Supreme Court struck down President Joe Biden’s student debt forgiveness program, there was plenty of ink spilled on how it may have a ripple effect on the housing market, the job market, and even when the millennial and Gen Z generations may start families.

Presumably, not a lot of people were thinking about the sports betting industry.

But TransUnion was, and on Wednesday released a report titled, “Gaming Report: Insights into bettors and their financial health.”

The study was done as an online survey of 3,000 adults from late April to early May 2023, and it includes an analysis of gaming industry performance and consumer liquidity.

And while the company found bettors’ financial health is generally better than that of the public at large, the looming return of college loans has the potential to hit the sportsbooks in the pocketbook.

“From our perspective, we saw that marginal income matters most. When people increase their income, there is a much higher likelihood of them putting it toward overall discretionary spending,” Declan Raines, the head of U.S. Gaming at TransUnion, told Sports Handle. “And there is a relationship between increasing your income and increasing your betting spend.”

And when student loans resume this autumn — payments will start coming due in October — many millennials and Gen Z-ers will see their net take-home pay effectively go down as a result.

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“We don’t expect a one-to-one inverse of income increases, but we do certainly expect it to have an impact on the industry,” Raines said. “Millennials are highly in debt to student loan repayments, and they are a key segment to the sports betting industry. We have noticed that high-income millennials tend to more likely be sports bettors. So the true impact of student loans restarting and the impact of that particular segment is yet to be seen, but we do anticipate it will have an effect on the industry.”

According to research from TransUnion, a major consumer credit reporting agency, the amount of outstanding student loan debt as of the first quarter of 2023 totaled $1.6 trillion. Millennials are responsible for 47% of the total, with an average monthly payment of $275. 

‘Headwinds’ ahead

In addition to student loans starting up again, Raines also views inflation and tightening of the job market as other issues affecting the sports betting industry during the third quarter and beyond, based on consumers’ available funds.

While Raines sees some trouble ahead, he does note different states will see different results. For example, he thinks New Jersey — with its mature market and higher personal incomes — will be able to weather the storm better than some newer betting states with lower per capita income.

“There are certainly headwinds impacting the industry,” Raines said. “But we do consistently find the overall financial health of bettors is better than of non-bettors. Bettors tend to earn more and have seen their income increase more in recent years. Bettors seem to have some insulation from a financial health perspective.”

Fraud alert

In addition to taking a look at the effect of college loans restarting, TransUnion researchers also dove into a few other issues in the sports betting industry, notably the preponderance of fraud attempts against sports bettors.

“The likelihood of bettors to fall victim to fraud attempts is much higher than non-bettors,” Raines said. “Identity theft is a big part of it, with bettors twice as likely to experience attempts at identity theft.”

In fact, bettors whom TransUnion identifies as “high value” bettors — depositing over $500 a month — are more than three times as likely to experience fraud attempts, with 22% of them claiming so compared to 7% of the non-betting public.


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