Are States Without Sports Betting Fueling Problem Gambling

There is no question that problem gambling is one of the biggest mental health crises in the US. However, there is reason to wonder if states without sports betting are fueling the problem.

In states across the country, sports betting bills have faced strong opposition due to concerns about problem gambling. That includes two large markets in Georgia and Texas, which are among a handful of states without any legal form of sports betting. 

While banning sports betting may seem like an obvious solution to curb the rise in problem gambling, new data suggests it may be having the opposite effect.

GeoComply Finds State Bans Aren’t Stopping Bettors

Geo-location giant GeoComply released a study last year on betting demand in states without regulated markets. They looked at the number of location checks, the number of active accounts, and the year-over-year increase in active accounts. 

Below is a table with their findings. 

Data from GeoComply, compiled between Sep. 5, 2024 - Jan. 5, 2025

GeoComply will soon update those numbers for the past year and expects all of them to increase.

States Without Betting Lack Revenue, Data

While GeoComply’s stats give us a picture of consumer demand in non-betting states, it doesn’t provide deep insight into problem gambling. 

States with legal markets are tracking problem gambling numbers, which non-betting states can’t do. Some residents may seek help, but the industry’s legal status will prevent others from doing so. Those bettors will be suffering in silence, making it impossible to gauge how widespread the issue is. 

The other issue for non-betting states is the lack of tax revenue to fund problem gambling programs. Those markets lack the extensive resources for their residents, making it hard for residents to find help. While addiction therapy can be beneficial, those programs may only have a loose understanding of gambling addiction, if any at all.

Prediction Markets Change the Math

While sports betting remains illegal in several US markets, residents there now have easy access to wager on sports.

Sports prediction markets have exploded in popularity over the last year and can operate in all 50 states. It is considered a form of commodity trading, meaning the industry is subject to the tax requirements and regulations that the sportsbooks are. 

The prediction industry has been popular, but it's still growing. It's largely unregulated, with most operators offering no protocols for problem gambling. That makes it even more dangerous for struggling gamblers, especially in states without regulated sports betting. Because prediction markets do not contribute to state tax revenue, states without legal markets are now facing a dangerous crisis without the funds to solve it.