Billionaire philanthropist John Arnold is committing $2.6 million to fund research into the social and economic effects of online sports betting, arguing that the rapid evolution of digital gambling platforms has fundamentally changed the industry since sports wagering became legal across much of the United States.
The grants, which have not previously been reported, will support researchers at universities and policy institutes examining how online betting affects household finances, consumer behavior, mental health, and family formation.
Arnold, who co-founded Arnold Ventures with his wife, Laura, said policymakers need to recognize that sports betting today bears little resemblance to the product many states legalized following a landmark U.S. Supreme Court ruling in 2018.
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“Being able to bet over the phone has dramatically increased access and lowered friction,” Arnold told CNBC.
“It has changed what the product is. You can bet on every pitch. You can bet with a speed that was never possible when you had to place a call to put a bet down.”
Arnold, a former hedge fund manager and one-time Enron energy trader, has increasingly focused his philanthropic efforts on public policy issues, including criminal justice reform, higher education, and, more recently, the expansion of prediction markets and online gambling.
In recent months, he has met with lawmakers and advocated stronger safeguards for online betting platforms, saying technological advances have made gambling faster, easier and potentially more addictive.
Under the new initiative, researchers at institutions including Princeton University, the University of Pennsylvania, and the University of Wisconsin will receive funding over the next three years to examine the broader societal consequences of legalized sports betting.
The research comes as the U.S. sports betting industry continues to expand rapidly. A 2018 ruling by the U.S. Supreme Court struck down the federal ban on sports wagering, allowing individual states to legalize the activity. Since then, 39 states and the District of Columbia have authorized sports betting.
According to an April survey by Siena University’s Research Institute, 27% of Americans now have an active online sports betting account, up from 19% in 2024. Industry growth has been equally striking. The American Gaming Association said legal sports betting generated a record $16.96 billion in revenue during 2025.
At the same time, prediction markets have emerged as another fast-growing segment of the wagering industry. Platforms such as Kalshi and Polymarket allow users to buy and sell contracts tied to the outcome of future events. Although they differ from traditional sportsbooks by operating as peer-to-peer marketplaces rather than bookmakers, they have increasingly attracted sports bettors.
According to an analysis by the Pew Research Center, trading volume on Kalshi and Polymarket surged from less than $5 billion in September to roughly $24 billion by April. The Congressional Research Service reported that approximately 87% of contracts traded on Kalshi over the past year involved sporting events, making sports by far the platform’s largest category.
Arnold said many state governments initially embraced sports betting because it promised new tax revenue without raising compulsory taxes.
“A lot of states jumped into legalizing sports betting in 2018. And I think that they were very attracted to the potential tax revenue,” he said.
“It’s very appealing for a state legislature to get money from a voluntary tax rather than a mandatory tax.”
However, he argued that lawmakers should reassess those decisions because the nature of online gambling has changed significantly.
“Our argument is that both the intensity and the access has changed dramatically, for not only sports betting but for a number of other vices,” Arnold said.
“As legislators are thinking about what we do with this and do we legalize, there needs to be the realization that this product has changed.”
Arnold compared the evolution of sports betting with other industries that have become more potent and accessible over time.
“Marijuana today is a very different product than what it was a generation ago. It’s just a much stronger intensity, and the access has increased,” he said.
“You think about pornography. The intensity of the product has increased dramatically, and the ease of access has eased dramatically.
“So sports betting, obviously the access has increased dramatically, but the product has changed as well.”
Arnold Ventures funded similar research into the effects of legalized marijuana in 2025.
Researchers and policymakers have focused on the impact of sports betting on younger adults, particularly men. Modern betting platforms allow users to place multiple wagers during a single game, including so-called prop bets that focus on specific plays or player statistics rather than final results.
According to the Siena survey, 46% of men aged between 18 and 49 now participate in sports betting, prompting concerns among some experts that excessive gambling could contribute to financial hardship and other social problems.
The industry’s rapid expansion has also drawn growing attention from lawmakers in Congress.
Several bills introduced this year seek tighter oversight of prediction markets and online sportsbooks. One proposal from Senator Jeff Merkley, an Oregon Democrat, and Representative Jamie Raskin, a Maryland Democrat, would prohibit prediction market contracts linked to sports, elections, wars, and government actions.
Another bipartisan bill introduced by Senator John Curtis, a Utah Republican, and Senator Adam Schiff, a California Democrat, specifically targets sports contracts on prediction market platforms such as Kalshi and Polymarket.
Separately, legislation sponsored by Senator Richard Blumenthal of Connecticut and Representative Paul Tonko of New York would establish stronger consumer protections for online sports betting. The proposal would allow states greater authority to regulate sportsbooks, restrict gambling advertisements, and ban certain types of proposition bets.
Arnold said most of his advocacy has focused on state governments because they regulate traditional sports betting, while prediction markets fall under the jurisdiction of the U.S. Commodity Futures Trading Commission.
“We are very actively talking to state legislators about their decision to legalize, because bills to legalize are coming through state legislatures every year,” he said.
“And there are also the ones who have already legalized and are thinking about the right guardrails.”
Arnold said he hopes the research funded through the new grants will provide policymakers with stronger evidence as they weigh future legislation and regulatory safeguards for an industry that has expanded rapidly through mobile technology and digital financial platforms.