Financial Expert Says Sports Betting Will Cause Future Housing Crisis

A well-respected financial analyst said Tuesday that the rise of legal sports betting could cause a housing crisis at some point down the line. 

Meredith Whitney, known as the “Oracle of Wall Street,” said on Squawk on the Street on CNBC that as sports betting continues to increase in popularity, there will be even more customers that take on losses. As those losses incur, the current generation of homeowners will have nobody to sell their property to.  

Whitney specifically highlighted the impact on young men, who have an enlarged focus on technology and sports.

Whitney, the CEO of Meredith Whitney Advisory Group, is best known for accurately predicting the 2008 recession. 

The renowned analyst started by noting the extreme growth that has occurred in such a short window. After all, sports betting was only legalized federally just over five years ago in 2018.

"The fastest growing leisure spend is fantasy sports and online sports betting," Whitney said. "I looked further into that and looked at DraftKings and what you see is massive growth." 

That growth has not only helped build a booming gambling industry, but it has had impacts in several other areas. Net spending in other industries is down, and young men are forming an attachment to their phones and laptops.

“Retail spending has been down all year, restaurant spending, travel, services, leisure… the fastest growing leisure spend is fantasy sports and online sports betting,” said Whitney. 

Whitney also attributed the falling dating rates to vices such as sports betting. As young men pay more attention to gambling and sports betting, they offer less time to finding a partner. 

According to Whitney, data from Pew Research shows that 63 percent of young men are single, the highest that figure has ever been. 50% of men have no interest in dating, and over 30% of men are sexually inactive.

She looped this back to the housing point and concluded that if there aren’t couples entering the home-buying market, then homeowners will have an even smaller group of people to market to. 

Whitney also said that 74% of the housing stock is in possession of people 50 or older who will need to sell those houses in the not-so-distant future.

Whitney’s comments are her interpretation of the situation at hand. There are no facts that directly support the idea that the rise of sports betting is to blame for a struggling housing market or related future failures, or even falling data rates. 

The housing market (and dating struggles) are influenced by a variety of modern factors, and sports betting likely is not the primary culprit. However, Whitney’s theory still has time to be proven correct.

Whatever impact sports betting is having on society, it is not going to slow down. The booming industry is responsible for more than $220 billion in total bets since it was legalized federally and is poised for more record-breaking numbers with even more states, most recently Florida, joining the market.

Sports betting is legal in 38 states already. There’s also momentum building in states that have been strongly opposed to sports betting thus far, including Texas, Alabama, Georgia, and others.

This is also one of the most popular times of the year for sports bettors to load up their mobile sportsbook apps and throw down some bets.

The NBA In-Season Tournament is about to play its first-ever championship game; the NFL playoffs are a month and some change away; and the College Football Playoff begins on New Year’s Day.