Sports Betting Causes and Consequences

Study Context

Sports betting on international football matches is a highly popular and rapidly spreading activity. This growth has been particularly pronounced among young men in sub-Saharan Africa.

Study Design

This project seeks to understand some of the factors leading to high levels of participation among sports bettors in Kampala, Uganda. In particular, the study focused on how betting demand may be generated or augmented by financial constraints that lead to unmet liquidity needs among many young men in this population. Over 1,700 participants were included in the study with a set of randomized treatments and lab-in-the field experiments.

Results and Policy Lessons

Consistent with the theory of financial constraints increasing betting demand, the results of the study show that bettors do increase lumpy purchases following their wins, reduce betting demand in response to a basic saving intervention, increase demand when primed to think about their liquidity needs, and reduce demand following a budgeting exercise for those who learn that their ability to save is higher than previously believed.