• According to a new scientific study, people are investing their stocks in legal gambling.
• The researchers found that household investment decreases by about $2 for every dollar invested.
• According to the study, this had a disproportionately negative impact on lower-income households.

The rising popularity of legal sports betting is being greeted with great cheers by American consumers. But a new study shows that the rise is coming at the expense of stock investments.

The study, which has yet to undergo peer review, finds that a household’s net investment decreases by about $2 for every dollar spent on a bet.

“Our findings suggest that access to online sports betting comes at the expense of exposure to the stock market and exacerbates the financial difficulties of cash-strapped households,” wrote a group of five academic researchers.

Betting invaded the modern American sports experience in 2018 when the Supreme Court struck down a federal law banning it, leaving control to the states, and 38 have since legalized it.

With gambling as easy as downloading an app, billions of dollars have been wagered. While the total amount wagered in the U.S. stood at $1.1 billion in January 2019, that number skyrocketed to $14 billion in the same month this year, data from the Sports Book Review shows.

According to the study, U.S. households spend an average of $1,100 per year, or $280 per quarter—an amount that increases by $25 each quarter.

At the same time, researchers found that net investment typically declined by nearly 14 percent in the two to three years following legalization in a state.

In addition, the study found that financially constrained households tend to spend a larger portion of their income on sports betting and are therefore more affected by the negative impacts.

“These households, already in relatively poor financial conditions, are more likely to divert funds from their investment portfolios to betting activities,” the researchers wrote. “Given that sports betting has a negative expected value, this finding highlights the potential that legalizing sports betting could worsen financial vulnerability and distress.”

Another recent working paper reached a similar conclusion, describing how credit scores were damaged in areas where sports betting is legal. In those areas, credit scores dropped by 1 percent, while debt collections and bankruptcies increased by 8 and 28 percent, respectively.

“It’s never enough,” Michelle Malkin, director of East Carolina University’s Gambling Research & Policy Initiative, previously told Business Insider. “You have to keep playing. So it’s this cyclical pattern of thinking: ‘I can solve my problems by keeping playing and getting the next win.'”