‘We Have a Problem’: 26% of Gen Z Views Sports Betting as Long-Term Financial Investment

August 13, 2026

It's no secret that Gen Z loves sports betting and prediction markets, but a recent Betterment survey shows a concerning trend: 25% of young adults now view sports bets as an essential component of their long-term financial strategy.

According to Betterment's fourth annual Retail Investor Survey, 26% of Gen Zers consider sports betting to be "a deliberate part of their long-term financial strategy." More startlingly, 52% of young respondents acknowledge that they have transferred funds intended for retirement or brokerage accounts directly into sports betting.

The last statement is consistent with recent research showing that some sports gamblers, regardless of age, forgo traditional investment in order to finance their betting habits. Compared to other age groups, a much larger proportion of Gen Zers believe that sports betting is a good substitute for traditional investing.

“About one in eight (12%) investors say they treat sports betting as a deliberate part of their long-term investing strategy. That share is far higher among younger generations: 26% of Gen Z and 14% of Millennials compared to 6% of Gen X and 1% of Boomers,” according to Betterment.

Betterment doesn't place blame on why so many young people see betting as a substitute for traditional investing, but some experts think it stems from the wealth gap, the idea that financial milestones like homeownership are unattainable, and the "you only live once" (YOLO) mentality.

The CEO of Betterment Says the Industry Must Advance

The CEO of Betterment, Sarah Levy, feels that the financial services sector can do more to stop the blurring of the borders between investing and gambling, despite the fact that prominent asset managers like Charles Schwab and Vanguard have been vocal in their criticism of prediction markets and sports betting.

“When a prediction market or sportsbook starts to feel like a retirement strategy, we have a problem,” said Levy in a statement. “These products are designed to keep people seeking the next quick score, not to help them build toward the next decade. Younger investors deserve access to the tools and information that meet them where they are, but the industry also has a responsibility to be clear about the difference between participating in a trend and building lasting wealth.”

She could have a point. Sportsbook operators used to have trouble drawing in Gen Z customers, but those days are long gone. Only 34% of Generation Z does not engage in sports betting, according to Betterment. On the other hand, 63% of investors in general do not wager on sports.

According to Betterment, 14% of the 52% of Gen Z that divert money from investing accounts to betting do so several times a month, which exacerbates their problems.

Not Just Money Lost

The real danger of conflating betting with investing, according to Dan Egan, Vise President of Behavioral Investing at Betterment, is "the erosion of a coherent financial strategy" rather than simply losing money.

The cost of lost opportunities is enormous.

Assuming a conservative 7% annual return, which is far less than the index's historical 10% average, a bettor who diverts $1,000 per month to sportsbooks might increase those monthly payments to around $246,000 after 20 years if they transferred only half of that sum—$500—into an S&P 500 index fund.