Wisconsin Policy Forum report warns of negative side effects of sports betting expansion

A new Wisconsin Policy Forum report explores Wisconsin's cautious approach to sports betting legalization, warning of potential gambling expansions. While most states that have legalized the activity have done so on a wider scale, including online and commercial sports gambling, Wisconsin only allows it on tribal lands.

The state could try to expand online sports betting to create additional tax revenues, but doing so could come with negative side effects, the report warns. A 2024 research paper cited by the policy forum found that states that legalized online wagering saw increased rates of bankruptcy, debt sent to collections, and auto loan delinquencies.

“Several studies showed that Household finances in states where online sports betting has been legalized were negatively affected in the aggregate,” Mark Sommerhauser, the report’s author and a spokesperson for the Wisconsin Policy Forum, told Wisconsin Public Radio.

The report also acknowledges there is “some amount of illegal sports betting” happening online in Wisconsin. Some apps and websites with gambling elements, including those marketed as fantasy sports sites, are accessible in the state. However, legalizing online betting to tackle the rise of these unregulated platforms could prove counterproductive, according to experts.

The Wisconsin Council on Problem Gambling has shared concerns surrounding the potential negative effects of expanded gambling. Executive Director Rose Blozinski said gambling addiction is already an issue in the state, with an uptick in issues stemming from sports betting in recent years.

“There’s a high suicide rate on people who have gone overboard on gambling, with problem pathological gamblers,” Blozinski said, as per the WPR report. “In addition to that, there’s usually a lot of financial issues. People can find themselves embroiled in legal issues.”

Under Wisconsin's cautious approach to sports betting, tribal nations hold exclusivity to the vertical. Nine of the 11 federally recognized tribal nations in Wisconsin have amended their gaming compacts with the state to authorize sports betting as of the end of 2024, with six of them already running operations in their casinos.

The six tribal nations with active sports betting operations are the Oneida Nation, St. Croix Chippewa Indians of Wisconsin, Sokaogon Chippewa Community, Forest County Potawatomi, Lac Courte Oreilles Band, and Lac du Flambeau Band. They use a share of their net winnings from gaming operations to support services for tribal members and make annual payments to the state to reimburse it for regulating casinos.

The Wisconsin Policy Forum report suggests the state could try to expand online sports betting without amending its constitution by renegotiating gaming compacts to allow online gaming off-tribal lands if it goes through servers on tribal lands, similar to Florida's arrangement with the Seminole Tribe. However, it’s unclear what a deal in Wisconsin would look like, Sommerhauser said.