Gambling and Substance Use: Early Evidence from Sports Betting Laws

Abstract

Previous research has established a strong association between gambling and substance use, often suggesting that these seemingly distinct behaviors may share similar environmental, neurobiological, and genetic causes. However, there is a dearth of credible empirical evidence that documents whether gambling has a causal impact on substance use or vice versa. This paper seeks to estimate the impact of gambling on substance use, making use of the rapid, yet staggered roll-out of sports betting laws across US states in recent years. We utilize data from the CDC's Behavioral Risk Factor Surveillance System and a difference-indifference (DID) estimation strategy to assess the impact of legalizing sports betting on the use of tobacco, alcohol, and marijuana among adults. We find that the legalization of online sports betting has increased binge drinking among young men by approximately 10%, but find no discernible impact on smoking and marijuana use. The results are consistent across specifications exploiting two-way fixed effects models as well as alternative staggered DID methods conceptualized more recently.

Keywords: Substance Use, Sports Betting Laws, Smoking, Drinking, Marijuana, Gambling

JEL Classification: I12, L83