52% of Gen Z investors have redirected investing money to sports bets

Sports betting has become fairly ubiquitous in the U.S. since the Supreme Court lifted a federal ban on the practice in 2018. More than a quarter (27%) of Americans and over half (52%) of men aged 18 to 49 say they have an active online sportsbook account, according to a Siena Poll from February. 

Many young adult sports bettors are making what financial professionals say is a particularly risky wager: that their sports predictions will help fund their futures. Over half — 52% — of Gen Z investors (those born between 1997 and 2007) have redirected money intended for investing to sports bets, a Betterment survey of 1,000 investors finds. 

"The concern isn't that young adults are enjoying sports or occasionally making a bet. The concern is when gambling starts competing with money that was intended for long-term wealth building, and when entertainment starts masquerading as an investment strategy," says Andrew Lendnal, head of financial wellness at Wealthspire, a wealth management firm.

The youngest adult generation tends to have good investing habits — starting earlier and diversifying their assets at higher rates than older generations. While there are responsible sports bettors out there, young investors should understand the risks and costs of mixing their wagers with their long-term financial plans.

Trading long-term strategy for short-term gains

About a quarter of Gen Z investors believe that sports bets should be considered part of their long-term financial strategy, according to Betterment. That may be because some young sports bettors think they have the know-how to drive consistent wins, says Steven Wang, the 24-year-old founder of investing app, Dub

"When I'm talking to my friends, [they say] 'Oh, I know this football team, so I'm probably going to make money [on a bet],'" he says. "They genuinely go into the bet in a way that they think they're going to win, but we know from all the statistics that's usually not true." 

To know why, it pays to have a basic understanding of how bookmakers set odds. For any given wager, sportsbooks have an edge over bettors because they bake a fee, known as a vig, into their pricing. On a bet that ostensibly has a 50/50 outcome, for instance, you typically have to risk $110 to win $100. Multiply this over millions of bets, and it's not hard to see how the deck is stacked against gamblers. If you receive $100 every time you win and pay $110 each time you lose, you'll go broke winning 50% of the time.

Over the last century, the stock market has averaged an annual weighted return of around 10%, according to research from Hendrik Bessembinder, a professor at the Carey School of Business at Arizona State University. Assuming the market continues on that trajectory, a $10,000 investment could grow into more than $452,000 over the course of 40 years. Sports betting can offer an immediate 100% return or more if you win, but over the long run generally produces a much lower expected return — a net loss, in fact, in most cases.

Even if you're not diverting money from your investments to do it, gambling can lead to financial problems. Legalized sports betting has coincided with rising delinquency and bankruptcy rates, the New York Federal Reserve reports. A quarter of sports bettors say they've missed a bill because of wagers and 30% say they've taken on debt due to their betting, a U.S. News and World Report survey found in 2025.

Using money you otherwise would be investing for your future could compound those problems.

A 'decision-making problem'

Gen Z has practically unlimited access to information that could help them build better financial futures. Social media, for example, is rife with personal finance advice. But often the good advice from certified professionals and trained experts gets mixed in with content from ill-informed or intentionally deceitful creators. 

"Young adults don't have an information problem. They have an information quality, trust and decision-making problem," Lendnal says. That can lead young consumers to favor fast and exciting money moves over boring, yet fundamentally sound ones, he says.

Scrolling on TikTok, you may come across a video from a financial educator highlighting the benefits of investing early in a diversified portfolio and letting your money grow over decades thanks to compound interest and the historical upward trajectory of the U.S. stock market. The next video, however, may be a creator — or even an advertisement — hyping up the idea that you can turn $100 into $1,000 over the course of a football game using an online sportsbook. 

On top of appearing to be a quicker path to wealth, sports betting can give individuals an "illusion of control," says Michael Platt, a neuroscience and psychology expert who teaches at The University of Pennsylvania's Wharton School. Bettors may think that their sports knowledge gives them a better shot at making money on games than they'd have if they researched markets or read up on the Federal Reserve.

"I have a better sense about [sports] than some stock that or index fund that I don't really know much about," Platt says a sports bettor may think.

Entertainment vs. investing

Sports betting can be fun and some gamblers — albeit a very small share — do make money. But it's important for bettors to see a difference between betting for entertainment and viewing their wagers as investments, Lendnal says. 

As such, it's wise to view any money you're placing on bets as money you can afford to lose, says Lednal. If you don't have an emergency fund or an active retirement account, it's probably a good idea to hold off on placing bets until you have that foundation, he says. You'd also be smart prioritize paying down high-interest rate credit card debt, as any balance you carry grows at a compounding rate.

"A real test is [asking] 'Can I afford this? What am I giving up to make this [bet]? And am I using money that should be going towards debt, emergency savings, or long-term savings?' and that's really the important distinction," Lendnal says.