Kansas Sports Betting Study Reveals Shocking Data

A University of Kansas sports betting study has revealed some shocking new data: Americans are spending money that may otherwise be earmarked for investments on the sports gambling market.

“Households across the country are skipping the stock market and using money that could otherwise be invested to bet on sports,” writes Blaise Mesa of the Springfield News-Leader. “A study, done in part by the University of Kansas, found that households bet more than $1,100 a year on average, and as money dries up, investments drop by 14 percent.”

This study is unique relative to many others. The rise of online sports betting in the United States since 2018 has prompted many deep dives into its impact. Most tend to focus on upticks in problem gambling reports. Others zero in on revenue. Some have spotlighted questionable advertising practices among sports betting operators.

To the best of our knowledge, this Kansas sports betting study is the first of its kind. Nothing else has concretely linked the legalization of sports betting in the United States investment patterns and changes.

These findings seem destined to incite even more studies just like it. After all, the focus here is not just on sports betting in Kansas. It is conducted through the lens of the entire country. And that means the fallout stands to be even broader.

The Kansas Sports Betting Study Identifies Lack of Clarity in the Stock Market as Driving Force Behind Rising Trend

The first question that comes to mind after considering the thesis of the Kansas sports betting study is why. Why, exactly, do people seemingly prefer betting on sports over investing in the stock market?

Though the answer is not definitive, a lack of transparency in the stock market seems to be a driving force. As Mesa writes:

“The study, ‘Gambling Away Stability: Sports Betting’s Impact on Vulnerable Households,’ found that the amount of money invested in the stock market fell almost every quarter for the first three years after legalization in a state. It notes that the long-term financial risks of such a shift fall more heavily on working-class households with less margin for error…Sean Benson, who has bet on sports in Kansas, sees sports betting as something fun to do, not a way to make serious money. He can see the appeal of sports betting over the stock market, even if he doesn’t do it.

“A company’s stock price will jump up or down and it isn’t always clear why, he said. But he can see with his own two eyes why a sports bet wins or loses. ‘As a sports fan my entire life, it’s just what I understand more,’ Benson said. ‘I’d probably be more into the stocks if I understood business.’”

This is an astute point. The United States stock market is convoluted. While many dabble in it independently, investment portfolios are typically managed by professionals.

That inherently creates another barrier for entry. Sure, there are stock market betting sites that allow individuals to buy and sell stocks. But the average person will not be as schooled in research of companies and can be easily confused by the rules, regulations and lingo of the industry. Sports betting is more binary—and doesn’t require a money manager.

Instant Gratification is Also a Factor in Sports Betting Uptick

Not only are online sports betting apps more accessible than investment portfolios, but they also promise more instant gratification.

When you invest in the stock market, you are typically playing the long game. Indeed, day trades buy and sell stock in small windows. But again, this requires a thorough working knowledge of the industry.

As the University of Kansas sports betting notes, the outcome of wagers is usually much quicker. Certain investments in “futures” may take a while to pan out. But even then, you are talking about the length of a season—which is still less than a year.

Figuring out where you stand is more cut and dry as well. Betting on sports ends in a win or lose proposition, with no in-between. In the stock market, prices rise and fall by different margins and without patterns. It is also on you to decide when your investment ends. Do you buy more stock? Sell it? Hold it?

There is no such equivocating for sports betting. You win a wager or you lose a wager. From there, you move on to the next one.

To be sure, this is not to say that line of thinking is safe. The University of Kansas sports betting study neither decries nor supports this trend. But it acknowledges that betting on sports is easier to understand whether it provides you with a best-case or worst-case outcome.

Can Anything be Done About Americans Pivoting Away from the Stock Market?

This is a somewhat loaded question. Treating sports betting as an investment isn’t particularly safe, but neither is the stock market. It is much safer, in theory, when you have someone else managing your portfolio. Even then, though, there are no guarantees.

Plenty of people will argue the stock market stacks the deck against customers more than online sportsbooks in the USA. Outcomes to sporting events are not scripted. And while the stock market isn’t either, the Gamestop squeeze from a few years ago proved that retail users (i.e. independent stock market customers) will always be at a disadvantage relative to institutions.

Better education is the answer to everything. And we do not simply mean informing at-risk residents of the dangers associated with Kansas sports betting. There needs to be a better understanding of what constitutes a good investment overall, be it the stock market, real estate or something else.

For sports betting specifically, states that have legalized it should have an obligation to offer more informational and instructional services than they do now. Gambling hotlines exist. And a portion of tax revenues are allocated towards treatments for problems. But there is not enough focus on prevention. And that starts with properly educating people, preferably at a young age, about the merits and downsides of sports betting.

Some states have already started expanding their offerings in this arena. And after this Kansas sports betting study, it would not surprise us if more follow suit over the next few years.

Take a look at this list of the top online sportsbooks so you can find one that works for all of your sports betting needs: