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A growing number of young Americans are treating sportsbooks like a second brokerage account — and the habit is costing them. According to Betterment’s 2026 Retail Investor Survey, 52% of Gen Z investors say they redirected money originally set aside for investing toward sports bets over the past year.
The findings come as legal sports betting continues to expand across the US, raising questions about whether younger investors increasingly see wagering as an alternative to traditional wealth-building. Betting has become deeply embedded in American life since the Supreme Court struck down the federal ban on the practice in 2018.
A Siena Poll from February found that more than a quarter of Americans, and over half of men ages 18 to 49, now hold an active online sportsbook account.
Blurring the line between wagers and wealth
Betterment’s fourth annual survey polled 1,000 US investors across four generations in April 2026.
26% of Gen Z investors — those born between 1997 and 2007 — now view sports betting as a deliberate part of their long-term financial strategy, compared with 14% of millennials, 6% of Gen X and just 1% of baby boomers.
Betterment CEO Sarah Levy said the findings point to a worrying shift in how some young investors see sports betting. When a sportsbook starts to feel like a retirement strategy, she said, “we have a problem.”
Legal sports betting has expanded rapidly since 2018. Americans legally wagered nearly $167 billion on sports in 2025, and sportsbooks generated roughly $17 billion in revenue — a scale the industry has reached in less than a decade.
Andrew Lendnal, head of financial wellness at Wealthspire, said the issue isn’t that young people enjoy sports or place an occasional wager — the concern begins when gambling competes with money meant for long-term investing.
He added that Gen Z overall shows strong investing instincts, often starting earlier and diversifying more broadly than older generations did at the same age.
Why the odds rarely favor the bettor
Some young bettors are confident they can beat the odds through personal knowledge rather than luck. Steven Wang, the 24-year-old founder of investing app Dub, said friends often tell him they’re certain a bet will pay off because they follow a team closely — “but we know from all the statistics that’s usually not true,” he said.
That confidence runs up against how sportsbooks price their markets. Operators build a fee, known as the vig, into nearly every wager; a bettor typically must risk $110 to win $100 at roughly even odds. Spread across millions of wagers, that edge steadily favors the house.
The contrast with long-term investing is stark. Research by Arizona State University professor Hendrik Bessembinder found the stock market has produced an average annual return of nearly 10% over the past century — a pace at which $10,000 invested could grow to more than $452,000 over four decades. A winning bet can produce an immediate payout, but the expected long-term return remains negative for most bettors.
The fallout extends beyond missed gains. A New York Federal Reserve study published this year found credit delinquencies rose in states after they legalized sports betting, with the sharpest increases among bettors under 40.
Separate research from UCLA, Harvard and USC estimated legal online betting raised the odds of personal bankruptcy by as much as 30% in the years following legalization.
Social media, AI and a trust deficit
Lendnal argued that today’s young investors aren’t short on information — they’re navigating an overwhelming mix of credible and misleading financial advice. “Young adults don’t have an information problem,” he said. “They have an information quality, trust and decision-making problem,” one that pushes people toward flashy, fast-moving decisions over steadier ones.
Betterment’s survey backs that up: 60% of Gen Z investors now cite social media as their top source of financial news, up from 45% two years earlier, and nearly half said AI has influenced a financial decision.
Part of the appeal, according to Michael Platt, who teaches neuroscience and psychology at the University of Pennsylvania’s Wharton School, is that sports betting offers an illusion of control that unfamiliar markets don’t. A bettor might believe they understand a football matchup better than an index fund or a Federal Reserve decision, Platt said, even though familiarity doesn’t change the underlying odds.
Drawing the line between fun and a financial plan
None of this means every bettor is headed for trouble, and a small share do come out ahead, according to CNBC. Still, Lendnal said bettors must separate wagering done for entertainment from money treated as an investment.
He recommended betting only with money a person can afford to lose, avoiding it entirely without an emergency fund or active retirement account, and paying down high-interest credit card debt first, since interest charges can quickly outpace any winnings.
Before placing a bet, Lendnal suggested asking a simple question: What would that money do instead — pay down debt, build savings, fund a retirement account? That trade-off, he said, matters more than the outcome of any single wager.
