Gambling and Substance Use: Early Evidence From Sports Betting Laws

Previous research documents a strong association between gambling and substance use, suggesting that these seemingly distinct behaviors may share similar environmental, neurobiological, and genetic causes. However, there is a dearth of credible empirical evidence on whether gambling has a causal impact on substance use or vice versa. This paper estimates the impact of gambling on substance use making use of the rapid roll-out of sports betting laws across US states. Using data from the Behavioral Risk Factor Surveillance System and a difference-in-difference (DID) estimation strategy to assess the impact of legalizing sports betting on smoking and drinking behavior among adults, we find that the legalization of online sports betting has increased binge drinking frequency-at the intensive margin among young men by approximately 10 percent, but find no discernible impact on smoking. The results are consistent across traditional two-way fixed effects models as well as more recently developed DID methods designed for staggered treatment adoption.