When it comes to your finances, sports betting may be one gamble you don't want to take.

Wagering on sports can lead to poorer debt management and worse credit scores. Bettors are also more likely to increase their spending and shrink their investments, according to a pair of recent studies. The consequences are biggest among financially vulnerable populations.

What's worse, per a third study, is that the way sports betting is evolving could make it one of the most addictive forms of gambling.

It's time for policymakers to step in and regulate this budding betting industry six years after it was legalized in the US to help people avoid their worst impulses — before it's too late.

"As individuals, voters, [and] policymakers, I think our results are concerning," Justin Balthrop, a co-author of one of the studies and an assistant professor of finance at the University of Kansas, told Yahoo Finance.

"But it's very hard to make prescriptions before you have a diagnosis. And what I think our paper is really trying to do is get very precise estimates of exactly what the problems are."

The financial consequences of sports betting

Sports betting began to take hold after the Supreme Court struck down the Professional and Amateur Sports Protection Act in May 2018, allowing states to set their own sports gambling laws.

So far, sports betting is legal through retail and/or online sportsbooks in 38 states and the District of Columbia. Revenue has jumped, growing 30.3% to $7.56 billion year to date through July from the same period last year.

In his study, Balthrop — who refers to himself as "a pretty avid and voluminous sports bettor" — took advantage of the staggered rollout of sports betting across the US after its legalization, giving him and his colleagues time to understand the before and after effects of this betting.

What he found was for every $1 deposited into online sportsbooks, those households reduce their investment allocations by $2. The doubling effect — from $1 to $2 — comes from the additional spending outside of the bets to support their gambling. Think extra streaming services or more sports bar tabs to watch games.

Additionally, sports betting increases the number of times households overdraw their bank accounts, Balthrop found. These effects were worse for financially constrained households, which also reduced their credit card payments while increasing their balances.

"The core of this effect is taking place in households that may not have budgetary slack," Balthrop said.

Davide Proserpio and his colleagues found similarly concerning findings in their study. Overall, the average credit score in a state fell by 0.3% after legalizing sports gambling. That figure triples to 1% if the state permitted online sports gambling.

The fact the study took the average credit score of a state's entire population likely dilutes the real impact on a bettor's personal credit score, Proserpio, an associate professor of marketing at the University of Southern California, said.

On top of that, bankruptcies, debt consolidation loans, and debt collections increased in states that legalized sports betting, especially online betting — to the point that Proserpio found that lenders restricted access to credit to protect themselves. Low-income young men were more likely to be affected.

"It's not just gambling is affecting, on average, consumer financial health," he said, "it is also affecting a part of the population that is already low income and probably has other types of [financial] problems."

'A casino in our pockets'

Balthrop and Proserpio documented the consequences of sports betting, but their studies didn't examine why this particular form of gambling can be so detrimental.

That's where Dr. Jamie Torrance, a researcher in psychology at Swansea University in the UK, and his colleagues come in. They examined numerous studies worldwide on gambling in what's called a scoping review and unearthed patterns to help explain why sports betting has gotten so pernicious. It comes down to three factors: access, quantity of bets, and illusion of control.

Historically, sports betting was a slow, "simplistic form of gambling," Torrance said. To wager on a game, you had to call up a booker or walk into a betting shop. You could only bet if a team was going to win, lose, or tie. And then you had to wait until the game was over for the outcome of your bet.

"There's lots of research that indicates that the longer you have to wait for a gambling outcome, the less addictive and harmful the product usually is," Torrance said.

Not anymore with sports gambling, which is instantly accessible on our phones and more akin to slot machines.

"We're basically walking around with a casino in our pockets," Torrance said.

On popular apps such as DraftKings and FanDuel, bettors can wager at any time of the day, on any sport, on any game. They can bet on more than just who wins the game, too; they can put money on the outcome of the next baseball pitch or field goal kick. The options are nearly endless and the results come back faster.

"That is a big issue," he said.

Another major problem is that sports bettors can easily convince themselves they can beat the odds, Torrance said, providing "an illusion of control."

They fancy themselves as sports experts. They watch all the games and read all the game reports. They may subscribe to sports newsletters with insider info. Heck, maybe they were a half-rate player a decade ago.

"Sports betting has a way of tapping into people's misestimation of their own expertise," Balthrop said, agreeing with Torrance.

But — like any other type of gambling — the game is rigged. The house always wins.

'A trade-off'

Torrance's research also uncovered how sports betting could evolve — and his two major predictions are unsettling.

First, he expects sports betting companies to employ augmented reality. For instance, you could point your phone at a live sporting event, and the app would provide real-time odds on different bets.

Second, he anticipates these companies will provide bettors with very specific notifications based on their gambling behavior. A person could receive an alert that the star player's mother is having surgery this week that could affect the player's performance. Maybe the recommendation is to bet against the team.

"That kind of stuff encourages what we discussed earlier, which is the illusion of control," he said.

This is why all three researchers embarked on these studies, to provide crucial data on gambling to inform lawmakers who — to be honest — may be swayed more by the tax revenue sports betting provides. But citizens who get themselves into too much debt or don't save for retirement become a "social cost burden" down the road, Balthrop said.

"There is a trade-off here," Proserpio agreed.

Australia offers a blueprint, recently implementing ways to slow the betting process to combat those ruinous consequences. But time is ticking in the US as the sports betting industry evolves and grows.

Lawmakers in Missouri and Oklahoma have introduced bills to legalize the industry, while two Democratic congressmen this month introduced a bill that would allow the federal government to regulate advertising, bet-making, and artificial intelligence in the industry.

"I'd like to think that you guys over the pond have more time to reduce harm, but in reality, I don't think that's going to be the case," Torrance said. "I think, in fact, it's going to mirror the UK where we have lots of gambling harm."

In other words, don't bet on it.

Janna Herron is a Senior Columnist at Yahoo Finance. Follow her on X @JannaHerron.

Click here for the latest personal finance news to help you with investing, paying off debt, buying a home, retirement, and more

Read the latest financial and business news from Yahoo Finance