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Use gambling revenues to support financial education. Originally published in CommonWealth Magazine.
Sports betting is coming to a town and phone near you. Whether you are on the side of those who want to bring sports betting out of the shadows, like NBA Commissioner Adam Silver who wants betting to be “legal and safe,” or you think this is the beginning of a doomsday scenario, let’s face it… it’s here. The Massachusetts Senate recently passed a bill legalizing sports betting, sending the measure to the House for debate. While some disagreements remain, the House and Gov. Charlie Baker have indicated they eagerly await this compromise legislation.
Gambling windfalls will bring a large new revenue stream to the Commonwealth, perhaps $35 million annually. We have a unique opportunity to assert a measure of fiduciary responsibility with this cash flow: If we are to bring sports gambling out into the open, we need a financially fit population prepared for it.
Massachusetts schools are the best in the country. Our universities are known throughout the world, we are home to the oldest public high school in America, and our students annually come out on top with the highest math and reading test scores. However, we do not require any student to take financial education, the skill both students and their parents rate as most important for success post graduation.
For years, Massachusetts has teetered on the edge of ensuring all students receive this critical skill. But for some reason we’ve dawdled and watched neighboring states with legalized sports betting get it done. Just last year, Rhode Island guaranteed that all students in high school would take a personal finance course and New Hampshire is close behind with a current bill that has widespread support. We are left to worry why this hasn’t been a priority in Massachusetts. And we have reason to be concerned: Massachusetts adults carry on average over $5,100 on their credit cards. Our average student loan balance is $34,146 with over 63 percent of those borrowers under the age of 35. Clearly, more should be done – and at an earlier age – to prepare Massachusetts’s children for the challenging financial decisions that come the minute they turn 18.
Americans gamble about $5 billion a year legally, and an estimated $150 billion illegally – that’s quite a spread. If we are to change our state’s policies to inject some of the related tax revenue into our coffers, Beacon Hill should capitalize on the opportunity to create transformational change and use some of the windfall to make sure that the odds are in our students’ favor.
A lack of financial literacy is particularly acute among young adults. A survey of 100,000 incoming college students found that 92 percent felt that “they needed more education, information, and/or support to be able to pay off their college loan.” Another startling study shows that almost half of teens getting their first credit cards do not know how they work, with 79 percent of Generation Z believing that keeping a balance on your card helps your credit score (here’s a hint … it does not!)
We are convinced that financial education should be required for graduation as a standalone and capstone course for every high school student in the Commonwealth. But beyond that, schools must establish the building blocks of financial literacy even earlier. Studies have shown that children form financial habits by the time they turn seven. That’s why it’s important to introduce elementary school students to the basics of financial literacy early to build lasting responsible and safe financial behaviors. Free financial education resources are available for teachers and students of all ages from a number of local and national non-profit organizations, FitMoney and NextGen among them.
Being a savvy manager of one’s finances and understanding the risks of sports betting shouldn’t be an exclusive club only a privileged few are permitted to join. Leaving it to parents to get kids smart about their money would only perpetuate existing wealth differences and sustain these inequities for coming generations. Everyone wants better lives for their children, and financial literacy education provides an effective, essential tool to help kids reach their potential.
Jessica Pelletier is the executive director of FitMoney, a non-profit organization that advocates for financial literacy education starting in kindergarten. She grew up in Boston, MA and is a graduate of Boston Latin School and Boston College. Tim Ranzetta is the co-founder of NGPF Mission 2030 and Next Gen Personal Finance, a non-profit organization whose goal is to ensure that all high school graduates receive personal finance instruction by 2030.