# Problem Gambling Gambling that keeps going despite harm to the gambler's money, work or relationships. Clinicians diagnose the severe form as gambling disorder. For this vault the subject is policy, not medicine: who profits from the harm, who is supposed to prevent it, and how [[Prediction Markets]] slip out of the protections built for [[Sports Betting]]. ## What legalization did The strongest evidence comes from a 2024 study by Brett Hollenbeck (UCLA), Poet Larsen and Davide Proserpio (USC). They used credit-bureau data on about 4.4 million adults from 2016 to 2023 and compared states that legalized sports betting with states that did not. - In states that allowed **online** betting, **bankruptcy filings rose 25% to 30%** within about four years of legalization. - Debt collections, credit-card delinquencies and auto-loan delinquencies rose too, and credit scores fell slightly. - States with in-person-only betting showed little or no effect. **The phone is the difference.** - The damage was largest among **young men in low-income counties**. The effects show up across whole state populations, not only among known problem gamblers. **The counter-study.** The Progressive Policy Institute, a centrist think tank that says it has no gambling affiliation, published a study in September 2025 finding little difference in bankruptcies or credit scores between states with and without online betting from 2019 to 2024. Its method compares national and state aggregates. The UCLA/USC study tracks individual credit files, so it is better placed to find effects concentrated in one group. ## The prediction-market gap Sportsbooks in legal states must offer self-exclusion, follow age limits and advertising rules, and display helpline numbers. Prediction markets regulated by the [[CFTC]] follow none of these state rules: - **Self-exclusion does not carry over.** The Associated Press reported in May 2026 on gamblers who had banned themselves from sportsbooks and relapsed on [[Kalshi]] and [[Polymarket]]. One, a tax accountant, described getting "the same high." A clinician at Birches Health: "in the therapy room, we are often seeing the same cycle." - **Age.** Prediction markets take 18-year-olds. Most states set 21 for sports betting. New York's September 2026 lawsuit against Polymarket cites access by 18- to 20-year-olds. - **No helpline requirement.** On February 9, 2026, the National Council on Problem Gambling asked prediction-market operators to promote its helpline (1-800-MY-RESET) the way sportsbooks do. Its warning: users "may not recognize their activity as functionally gambling" and so are less likely to seek help. - **Geography.** Prediction markets reach bettors in states such as California and Texas, where sports betting is illegal and no state regulator sets the terms. ## The industry's response On September 30, 2026, the week after New York sued it, Polymarket introduced voluntary lock-outs (30 days, one year or lifetime), daily, weekly and monthly deposit caps for U.S. users, a cooling-off period before limits can be raised, and a partnership with Birches Health (Reuters). Kalshi has run a voluntary opt-out program since March 2025, and operators are building a national self-exclusion program for prediction markets. All of it is voluntary, and none of it is coordinated with the state self-exclusion lists. ## Policy fixes on the table The SAFE Bet Act and the Prediction Markets Security and Integrity Act would set federal floors: affordability checks, a national self-exclusion registry, limits on advertising and AI-driven promotions, and age verification. Details are on [[Sports Betting]]. ## See also - [[Sports Betting]] · [[Prediction Markets]] · [[Prediction Markets and Gambling Sector]] - [[Polymarket]] · [[Kalshi]] · [[CFTC]]