Financial and mental health risks

Wagering on sports outcomes has exploded in the 2020s, but recent surveys show just how widespread gambling has become for Generation Z. 

A survey of retail investors released in August by Betterment, an investment advisory platform, found that 66% of Gen Z investors participate in sports betting. The Bank of America Institute found in a September report that Gen Z made up almost 50% of all online betting activity in July, during the height of the 2026 FIFA World Cup, outnumbering millennials for the first time.  

“It is more unusual for someone not to have, for example, a Kalshi account, DraftKings … than it is” to have such an account, said Cynthia Grant, vice president of clinical at Birches Health, which provides online therapy for online gambling addiction recovery. “It’s part of the experience of watching sports now.”

Sports betting surged after a 2018 U.S. Supreme Court allowing state-authorized sportsbooks, which have since spread to 30 states. The introduction of sports-related event contracts on prediction markets — which claim they are financial trades, not wagers — in early 2025 further expanded access to additional states without legalized sportsbooks, and to those under 21.  

Now, the proliferation of sports betting has many financial and mental health advisors on edge. The average user on both a sportsbook and prediction market loses money, and trying to claw back losses puts users in even deeper financial holes, experts warn. Unsurprisingly, those who lose the most are at the greatest risk of harmful mental health outcomes.  

Gambling as investment

The Bank of America Institute survey found that Gen Z was twice as likely to see sports betting as a type of investment, versus 20% of respondents overall. For prediction markets alone, respondents overall saw them as a form of investing, but those numbers were again higher for Gen Z. 

In Betterment’s retail investor survey, 52% of Gen Z respondents said they moved money originally meant for investment to sports betting, while another 26% saw wagering as a part of their long-term financial strategy. 

Management at sportsbooks DraftKings and FanDuel typically say their products are entertainment, not investment. Prediction market platforms say event contracts, no matter the category, are a financial derivative. 

Dan Egan, director of behavioral finance and investing at Betterment, said sports betting increasingly appears alongside traditional investments on the same app or device, helping drive the association. 

The conflation is concerning because of the highly active behavior required to manage wagers on sports, unlike a long-term investment, Egan said. 

“It’s not an asset that grows with the economy, that kind of gets better as time goes on, that has a positive expected return, and that you can kind of sit back and not have to do…