Legalized College Sports Gambling Can Jeopardize Students’ Financial Success

2018 decision by Supreme Court has expanded gambling beyond Nevada.


Over the past few years, a new financial challenge has been growing for college students:  sports gambling. In 2018, the U.S. Supreme Court handed down a decision in Murphy v. NCAA, which overturned a 1992 federal law banning most states (aside from Nevada) from legalizing sports betting. Since Murphy, states have been allowed to legalize sports betting. This means that betting on college sports has begun popping up on college campuses around the country as states legalize it. Thanks to modern technology, college students can easily access sports betting on their smartphones thanks to betting and gambling apps

Legalized sports betting via a convenient app represents a new financial challenge to young people. Without personal financial literacy education in high school, incoming college freshmen may be unaware of the risks of gambling. While responsible gaming can be fun, gamblers should be fully educated on the dangers. College students are considered to be at higher risk for excessive gambling due to relatively lower impulse control compared to older adults. The fact that universities are now partnering with sports gaming apps, and making it easier for students to bet on college sports, is alarming for many.

Risks of Gambling

While many people gamble in moderation, such as enjoying a rare trip to a casino or buying the occasional lottery ticket, some fall prey to gambling addiction. Fortunately, financial literacy has a negative relationship with the frequency of gambling, meaning that those who are financially literate are less likely to become addicted to gambling. However, only financial literacy, and not just financial education, had this relationship, meaning the financial education must be high quality and instill true financial literacy. Part of this high-quality financial education should include a lesson on the risks and psychology of different types of gambling.

Online sports betting may be an attractive gambling option because it is seen as giving the gambler far more of a chance of success than truly random games like Roulette wheels and slot machines. However, sports betting can be very complicated, and college freshmen may be confused about all the terminology and options. They may also be overconfident about their ability to estimate the performance of college sports teams, especially those from their own institution. If sports gaming apps are partnered with universities, students may be tacitly encouraged to use the apps to bet on the “home team,” which may not be in their interest.  

Psychology of Finance, Economics, and Gambling

Part of a high school personal financial literacy class should include the psychology of both economics and gambling. Teenagers should be aware of how sellers – including gambling sites – use various tactics to encourage more purchases. Stores use different strategies to encourage impulse buys, and apps use various colors, sounds, and notifications to stimulate the reward centers of our brains. Gambling sites may lure in new users by making it very easy to register as a user and link a bank account or credit card number. However, when it comes time to deposit any winnings, the gambling site may use various strategies to try and convince the user to “double down” and use those winnings to gamble some more.

Psychology also plays a role in personal finance, with all consumers facing psychological impulses that can lead to financial struggles. Some consumers may struggle with impulse buying, while others fear the risks of investing and desire to keep all their money in cash. Awareness of the psychology behind good financial strategies, and the struggles many people face, can help young people make better financial decisions. Understanding how the mind works with money can help people override innate tendencies that can lead to bad financial habits.

About the Author

Owen Rust

Owen Rust teaches AP Economics and AP Government in Texas, and has also taught Personal Financial Literacy, which Texas high schools must now offer! He has a Master's degree in Finance and Economics from West Texas A&M University and is passionate about young people learning how to take charge of their financial and investing goals. Outside of teaching, Owen is also a writer who writes about politics, government, education, economics, and finance and investing.

Last updated on: December 20, 2022