‘We Have a Problem’: 26% of Gen Z Sees Sports Betting As Part of Long-Term Investing Strategy

It’s widely known that Gen Z, the demographic born between 1997 and 2012, has taken to online sports betting and, more recently, prediction markets. But a new survey from Betterment indicates this age cohort is embracing those habits with disastrous financial consequences.

The asset manager’s 2026 Retail Investor Survey, the fourth annual iteration of the poll, says 26% of Gen Zers view sports wagering “as a deliberate part of their long-term financial strategy” while a staggering 52% have redirected capital originally intended for brokerage or retirement accounts to sports betting. The latter point jibes with other studies’ findings confirming that regardless of age range, some sports bettors sacrifice traditional investing to fund their wagering habits. The percentage of Gen Zers viewing sports wagering as a suitable alternative to standard investing is far higher than it is in other age groups.

Betterment doesn’t assign blame regarding why so many young people view betting as a replacement for traditional investing, but some experts believe it boils down to the wealth gap, belief that financial milestones, such as homeownership, are out of reach and the “you only live once” (YOLO) mentality.

Betterment CEO Says Industry Needs to Step Up

Well-known asset managers, including Charles Schwab and Vanguard, have been overt in their criticism of prediction markets and sports betting, but Betterment CEO Sarah Levy believes the financial services industry can do more to prevent the blurring of the lines between investing and wagering.

She may be onto something. There was a time when sportsbook operators were struggling to attract Gen Z clients, but that’s now a bygone era. Betterment points out that just 34% of Gen Z don’t participate in some form of sports wagering. Conversely, 63% of investors at large aren’t sports bettors.

Compounding Gen Z’s woes is the fact that of the 52% that redirect cash that would otherwise go to investment accounts to betting, 14% do so multiple times a month, according to Betterment.

Not Just Lost Money

As Dan Egan, vice president of behavioral investing at Betterment, notes, the true risk of blurred lines between betting and investing isn’t just about lost capital; it’s also about “the erosion of a coherent financial strategy.”

Opportunity cost is also part of the equation. A bettor devoting $1,000 monthly to that pursuit could cut that figure in half, still wager and direct the other $500 to an S&P 500 index fund. After 20 years, those monthly contributions coupled with market gains could evolve into $246,000, assuming 7% annual returns. That’s far below the index’s average annual return of 10%.