At the recent General Conference of The Church of Jesus Christ of Latter-day Saints, President D. Todd Christofferson of the church’s First Presidency provided a sobering warning about the increasingly common practice of gambling.

President Christofferson taught that gambling is morally wrong. Among other concerns, he noted that gambling displaces other priorities and fosters an ethic of trying to succeed at the expense of others.

One of the benefits religion provides to society is that religious teachings can highlight considerations different from the preoccupations of the dominant culture, drawing attention to those whose needs are at risk of being ignored or forgotten, and promoting a scale of values higher than short-term gain or self-interest.

The warning about gambling is timely. An Institute for Family Studies study of 2,000 young men found more than half are gamblers, with nearly a quarter gambling daily. The study found that 10% of the gamblers group reported “severe or extreme” distress or problems related to gambling, with 29% more reporting “moderate” and 28% reporting “mild.” Those “who report gambling many times a week or more also report more loneliness.”

The constitutional principle of federalism can likewise promote productive diversity. Among the benefits of federalism is that it allows innovation on a smaller scale that can be imitated (or avoided) by other states or levels of government. By contrast, the federal government is a bad forum for trying out innovation in public policy. Federal laws need to be broad enough to address the unique circumstances of 50 states. Congress does not do much legislating, so even if a policy were to be approved, if that policy was not working well, it would be very hard to make a change.

Gambling is an issue long governed by state law, as the U.S. Supreme Court has specifically recognized. In that opinion, the Court noted that states had long prohibited any form of gambling, but that situation has now essentially reversed. Only two states, Utah and Hawaii, prohibit all forms of gambling. Utah’s law is emphatic. The state constitution provides: “The Legislature shall not authorize any game of chance, lottery or gift enterprise under any pretense or for any purpose.” Hawaii’s law makes “any gambling activity” a misdemeanor.

By contrast, all of the other states allow some forms of gambling.

Our federalist system means that the outlier states can provide a test of gambling policy. It will take time and more research to reach firmer conclusions, but there is some data available that can help form educated guesses.

For instance, a study published by the Federal Reserve Bank of New York found that the legalization of sports betting in 38 states led to large increases in spending on bets and that these effects seem to spill over into nearby counties. The legal change was also associated with modest declines in credit scores and modest increases in delinquency rates (being more than 90 days late on credit payments).

Another study also found an increase in sports betting after legalization associated with a significant reduction in household savings.

Since states adopted sports betting at different times, researchers can get a better idea of the effects of that adoption. A study using national consumer credit data also found a decline in credit scores associated with sports betting, and a larger decline with the introduction of online sports betting specifically. Additional possible effects were increases in bankruptcy filings, debts going to collections, and delinquencies in credit card and auto loans. The researchers concluded that “ease of access to sports gambling – particularly through online and mobile channels – harms consumer financial health by increasing levels of excessive debt.”

To these concerns can be added the risk of individuals developing problematic gambling habits, possibly serious mental health challenges, and increased binge drinking.

Of course, with a uniform policy imposed by the federal government, it would be more difficult to determine these possible effects. Utah and Hawaii, by holding the line on gambling, could be discouraging some of the negative trends experienced in other states. Obviously, access to online gambling means all states can be affected, but making a different choice can help individuals and households and provide an example to other states that may want to turn things around.

This term, the U.S. Supreme Court is being asked to take a case that would allow states to control the practice of prediction markets, which include gambling. A bipartisan group of attorneys general representing the majority of states is encouraging the Court to allow the federalist option for regulating these markets to proceed. Whatever the other legal issues it must consider in making that decision, the Court should keep in mind the benefits of federalism.

Sutherland Institute interns Peter Klemis and Kason Kendall provided invaluable research assistance for this piece.