Data Science Talk Series 

Title: The Effects of Sports Betting Legalization on Consumer Behavior, State Finances, and Public Health

Abstract: The legalization of sports betting has increased gambling participation significantly across the U.S., raising important questions about its costs and benefits for states and consumers. We use a large panel of individual-level financial data to analyze the impact of sports betting legalization on regulated gambling activity, state revenues, and broader economic effects. Examining 11 treatment states with differing patterns of legalization across online and offline gambling channels, we find that online sports gambling spending increased by 369% following legalization (from $0.99 to $4.63 per individual-month), while the rate of irresponsible gambling – defined as monthly gambling expenditures exceeding 1% of income – rose by 372% (from 0.2% to 0.9% of individuals). These increases represent genuine growth in regulated gambling activity, and there is little evidence of substitution from offline casino spending. The spending increase is relatively uniform across income levels, but irresponsible gambling shows significant income-based heterogeneity, with lower-income individuals experiencing disproportionately larger increases. Existing gamblers drive substantially more of the increase in problematic behavior than new gamblers, despite representing a smaller share of the population. Legalization also generated spillover effects, including a 20% increase in mass-market alcohol consumption and a 75% increase in calls to gambling helplines. State tax revenues were lifted by $0.78 per capita monthly across treatment states due to legalization.  

Bio of the speaker: Dr. Wayne Taylor is a marketing professor at the Cox School of Business at Southern Methodist University. His research focuses on modeling consumer behavior using large customer databases. Dr. Taylor's work is particularly centered on customer relationship management, with a special emphasis on loyalty programs, targeting, and understanding policy effects. He is an empirical modeler who primarily uses Bayesian statistics to conduct practical, impactful research, much of which extends from his applied work with large corporations. Before joining academia, Dr. Taylor worked at the managerial level for Las Vegas Sands, where he specialized in casino marketing analytics.