by Kris Nordstrom, MPP
Director of Research
July 19, 2026
There have been growing calls to legalize online sports betting in New Mexico. Today, sports wagering is limited to tribal casinos, but some lawmakers and industry advocates argue that expanding it online would generate new tax revenue and help diversify the state’s economy.
New Mexico should reject online sports betting. Expanding and increasing access to online betting would prioritize short-term revenue over the long-term well-being of New Mexico families and communities. While diversifying the state’s tax base is an important goal, it should not come at the cost of increasing gambling-related harms, including addiction, financial instability, and disproportionate impacts on vulnerable populations.
First, gambling taxes are regressive, raising revenue off the backs of people with low incomes. The revenue from online sports gambling, in particular, is likely to come from the pockets of Black and Hispanic New Mexicans. New Mexico has taken great strides in recent years to make our state tax system more fair across income and race. Legalizing online sports gambling would be a step in the wrong direction.
Online sports gambling is also a major threat to family stability. Out of all the forms of gambling, online sports gambling appears to be the most closely associated with clinical gambling disorders. The gamification and targeted marketing mastered by sports betting apps makes them highly addictive. Gambling disorders among sports bettors are at least twice as high as among gamblers in general. A study of sports gamblers in Maryland found that 20% engaged in “disordered gambling,” with an additional 31% of gamblers deemed to be at risk.
Younger people, particularly boys and young men, are particularly susceptible to gambling disorders. These addictions are a threat to public health, frequently contributing to mental health issues such as suicide and depression.
For families, spending on sports betting displaces savings and other beneficial long-term investments. Researchers estimate that for every $1 spent on betting, households put $2 less into investment accounts. The problem is particularly acute in families with low incomes, where sports betting leads to higher credit card balances and greater incidence of overdraft fees. This means less money for families to invest in their children’s well-being.
By examining data from states that have legalized online sports gambling, researchers have discovered that it increases the risk that a household goes bankrupt by 25 to 30 percent and plummets credit. They’ve also found that there is a 9% increase in domestic violence in the states where online sports gambling is legal. Bankruptcies and domestic violence are devastating for families, creating adverse childhood experiences that can negatively impact children’s health and development.
These social costs are an awfully high price to pay for, at best, a tiny increase to state revenue. Despite its wide adoption across 38 states, state revenue from sports gambling taxes comprised just 0.2% of total state government tax collections in FY 2024. Even that small number overstates sports gambling’s contributions to state revenue. Increased spending on gambling means less spending on other goods and activities, cannibalizing collections from other sources like sales taxes. Meanwhile, the state’s spending obligations increase due to the social costs of legalization.
To be sure, New Mexico lawmakers should be looking to diversify the state’s tax base. Luckily, there are many alternatives for diversifying the tax base that don’t threaten families’ well-being. Increasing taxes on high earners, reducing exemptions to the gross receipts tax, and ensuring that profitable corporations pay their fair share will strengthen New Mexico’s tax base without threatening family stability.
Diversifying the tax base in these ways allows the state to sustain or increase in the evidence-based programs that allow all New Mexicans to flourish. In contrast, online sports gambling has been proven harmful to families and children. Families are less likely to thrive when their families face greater financial instability and stress. Legislators should resist the false promises of sports gambling and continue to focus on creating a fair tax system that supports New Mexicans’ needs – not one that immiserates regular people on behalf of betting companies.