Wednesday, July 22, 2026

Legalization of sports betting has led to households saving significantly less money

Households that had little savings to begin with added credit card debt and took on larger loan payments to keep betting

Brigham Young University

Photo illustration of individual engaging in sports betting — image:
New research from Brigham Young University finds the legalization of sports betting has lead to US households to save less money.
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Credit: BYU Photo

As legalized sports betting becomes increasingly accessible with mobile apps such as DraftKings and FanDuel, a new study from BYU Finance professors is finding people are saving less to fuel gambling habits.

The research, authored by BYU Marriott School of Business professors Mark Johnson and Jason Kotter, and published in the Journal of Financial Economics, analyzes transaction data from 184,000 households. They found households cut their net investment in brokerage accounts by 20% following the legalization of sports betting. And the heaviest bettors cut their investment deposits by more than half: for every dollar they put into a betting app, roughly 20 cents never made it into long-term savings.

In other words, more and more people — including those who had little savings to begin with — are treating gambling as an investment, even though the data shows sports betting is a terrible financial strategy.

“If you have a diversified investment portfolio like an S&P index, it consistently makes money over a long period,” Kotter said. “With sports betting, you might win occasionally, but if you look over a window of six months or longer, only a tiny fraction of people do better than break even. If you think you are going to make a lot of money betting, you are expecting to be an extreme exception in the data.”

Johnson and Kotter expected to see betting displace other entertainment spending — fewer concert tickets, fewer nights out — not from funds they otherwise would have saved or invested. Instead they found it’s increasingly common that someone will cut a quarterly $200 Vanguard deposit in half in order to fuel a FanDuel account.

The revoke of the federal ban on sports betting changed the game, pairing sports betting as both a form of entertainment and a possibility for legal economic gain. Tracking line-ups and player progression has evolved from a fun pastime to a seemingly profitable venture.

“Many people consume sports and feel like they are experts on their favorite teams or players,” Kotter said. “This can make them overconfident, leading them to believe they have an informational advantage and a potentially profitable strategy. But very few bettors make money."

The researchers discovered that bettors see online sports betting as a form of investment — more sure or as sure of a money maker as traditional investments. This is especially true, they found, when general public expectations for the economy are low and people are worried that investing won’t have the same returns.

“You see people talking about buying equity in the stock market as if it's a gamble,” Kotter said. “Particularly for younger people, accumulating the kind of wealth you might need to buy a house feels so far out of reach. So sports betting also becomes about the potentially immense returns. You take a long shot bet you're almost surely going to lose, but if you win, it's big.”

Not only are bettors saving less, but they’re actually spending more. Johnson and Kotter found that frequent bettors also increased spending in sports-adjacent categories like restaurants, bars, and cable television, further blurring the line between entertainment and investment.

“It creates an exacerbating effect where they not only draw money from investment accounts but also spend more in places they wouldn't have without the legalization of sports betting,” Johnson said. “They view it as both entertainment and investing; they go to a restaurant with friends to watch the game and discuss their bets together.”

For Johnson and Kotter, their findings reflect a need to protect families and teach bettors to adapt to the possible detrimental effects of sports betting legalization and online accessibility.

“We are not going to get rid of sports betting nationwide,” Kotter said. “So the conversation must focus on alleviating the worst harms. We need to break the mental link between sports betting and good financial returns by helping people understand the actual data and probabilities of making money.”

Professors Scott Baker of the University of Wisconsin-Madison, Justin Balthrup at the University of Nebraska-Lincoln and Kevin Pisciotta of The University of Kansas served as co-authors on the study.

Sports betting is leading US households to save less money. It's especially impacting US households who are already struggling financially.

Credit

BYU Photo

Journal

Journal of Financial Economics

DOI

10.1016/j.jfineco.2026.104330

Method of Research

Data/statistical analysis

Subject of Research

People

Article Title

Gambling away stability: Sports betting’s impact on vulnerable households

2 million cars with anti-theft systems installed by dealers are at higher risk of theft

A vulnerability in systems installed by dealers in Southern California since 2017 is getting fixed by the system manufacturer. But car owners need to be aware.

University of California - San Diego

KARR sticker — image:
This sticker, found on cars sold after 2017 on the driver’s side window, indicates that the vehicle likely has had a vulnerable system installed by a dealer.

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Credit: David Baillot/University of California San Diego/Jacobs School of Engineering

Video: https://youtu.be/xS_4dNRGkoA?si=olL6w75Gj9l0DQo8

At least 2.2 million cars on the road today are vulnerable to an attack that allows thieves to lock and unlock doors and immobilize vehicle engines remotely via a Bluetooth connection, computer scientists at the University of California San Diego have found.

Attackers can get access to cars from as far as five yards away. Most of the vulnerable vehicles were bought at Honda, Toyota, Mazda, Ford, and Jeep dealerships in Southern California from 2017 to today. But because these vehicles are resold on the second-hand market, several hundred thousand vulnerable vehicles can also be found throughout the United States, Canada and even as far as Japan. Many vulnerable cars display a sticker with the word “KARR” or “SWDS” on the driver’s-side window.

The vulnerability is due to a device controlled via a smartphone app that is typically installed by dealerships to manage vehicle inventory and prevent theft. The device, installed underneath the bottom of the dashboard on the driver’s side, connects vehicle and app via Bluetooth. The app makes the device perform functions similar to a key fob: lock and unlock doors as well as honk a horn and flash headlights as a warning. In addition, the device can prevent the car from starting as long as the car isn’t already running.

All KARR-SWDS devices rely on the same secure key – meaning that once the researchers cracked that key, they had access to all the cars equipped with these devices. It’s a bit like setting all passwords for a line of devices to 1234 and making it impossible to change the password.

When a dealership sells a vehicle, they market the device and app as a paid upgrade – an anti-theft tool as well as a tool to control the car via an app. Even if the buyer declines the upgrade, the device remains active, still leaving the vehicle vulnerable to an attacker in certain situations.

The company manufacturing these devices, Acrisure, released a patch to fix the vulnerability on July 20, 2026. The fix requires downloading an app. “Many car owners don’t even know that their vehicle is vulnerable. So we wanted to make sure they were aware by publishing this study,” said Aaron Schulman, a professor in the UC San Diego Department of Computer Science and Engineering, and one of the study’s senior authors.

The vulnerability could allow thieves to steal cars more easily. “Instead of smashing a window to get access to a vehicle, thieves could simply connect remotely via Bluetooth to the device inside the vehicle, and make it unlock car doors,” said Jerry Yu, a computer science Ph.D. student in Schulman’s research group at UC San Diego and the paper’s co-first author. Once the car is unlocked, attackers can use a variety of tools available to locksmiths to then start the car and drive away.

The researchers, led by Schulman, will detail how they discovered the vulnerability and reverse-engineered it at the DEF CON conference Aug. 9 in Las Vegas and the USENIX Security conference Aug. 12 in Baltimore, Md.

In the study, researchers identified at least 1.4 million vulnerable vehicles, but further analysis by the UC San Diego researchers increased that number to an estimated 2.2 million – at least.

Different levels of vulnerability

In addition to Acrisure, Rockledge, a car security and insurance company, makes similar devices. The researchers found these devices may also be vulnerable, but are more difficult to attack. An attacker would need to be there when a driver uses these systems to intercept and record their digital interactions, and then play those interactions back to get access to the user’s vehicle. Researchers were unable however to validate these findings with Rockledge as the company had not yet responded to the researchers’ disclosure as of this writing.

The research team is careful not to disclose the details of how they reverse-engineered the systems so their work can’t be replicated by thieves. Researchers also disclosed the vulnerabilities to all relevant manufacturers and vendors as well as to the National Highway Traffic Safety Administration.

How to fix the vulnerability?

“Removing the devices is not trivial. You have to open up the dashboard and cut and reconnect the wires that are deeply intertwined with the car’s computers and ignition system,” said Yibo Wei, who is also a computer science Ph.D. student in Schulman’s group at UC San Diego and the paper’s co-first author.

To fix the vulnerability non-invasively, the device firmware – the software that controls the hardware – needs to be updated. On July 20, KARR-SWDS maker Acrisure announced that it has released a firmware update to fix the issue. The update needs to be made by the vehicle owner via the KARR app. For more information visit www.KARRsecurity.com

But to truly make sure similar vulnerabilities do not occur in the future, researchers suggest that physical interaction – like pressing a button inside a car – be required when a new smartphone connects with these Bluetooth-based security systems.

How did the researchers discover the vulnerability?
It all started in 2018 when researchers led by former UC San Diego computer science Ph.D. student Nishant Baskar found Bluetooth fingerprints they didn’t recognize while hunting for devices called credit card skimmers, which criminals install in gas pumps to steal consumer credit and debit card data.

After a fair bit of research, they were able to connect the Bluetooth fingerprints to the devices manufactured by Acrisure and Rockledge. They then set out to test whether the devices were secure, as part of a broader research effort to understand cybersecurity in Bluetooth devices.

Researchers also found that public databases store location information about vehicles equipped with these devices. This in turn, would allow attackers to track specific vehicles they want to break into.

The research was supported in part by a grant from the National Science Foundation (grant no. CNS-2239163).

BLE Theft Auto: Evaluating the Security of Aftermarket BLE-based Automotive Remote Control Systems

Jerry Yu, Yibo Wei, Sumanth Rao, Mohak Vaswani, Jefferson Chien, Nishant Bhaskar and Aaron Schulman, Department of Computer Science and Engineering, University of California San Diego, UC San Diego, Christian Dameff, UC San Diego Health

This button is part of the KARR system. If it is installed in your car at the bottom of the dashboard, your car is likely vulnerable to the attack the researchers have discovered.

Student with app used to exploit the vulnerability

Yibo Wei, a Ph.D. student at UC San Diego and one of the paper’s co-first authors, holds up a phone equipped with an app he built to exploit the vulnerability the researchers discovered and gain unauthorized access to a car.

This button is part of the KARR system. If it is installed in your car at the bottom of the dashboard, your car is likely vulnerable to the attack the researchers have discovered.