Gen Z blurs line between betting and investing

• Betterment’s 2026 Retail Investor Survey finds 26% of Gen Z investors treat sports betting as a deliberate part of their long-term financial strategy.
• 52% of Gen Z respondents redirected money originally meant for investing into sports betting over the past year, and 14% do so multiple times a month.
• The findings land as US sports betting revenue approaches $17 billion, with prediction markets adding a fast-growing new front.

More than a quarter of Gen Z investors now treat sports betting as a deliberate part of their long-term financial strategy, according to Betterment’s 2026 Retail Investor Survey, first reported by Bloomberg via Yahoo Finance.

The wealth platform ran an online survey of 1,000 US retail investors, evenly split across four generations, between late March and early April 2026, publishing results in August.

Money leaves the market

Betterment found that 26% of Gen Z investors, born between 1997 and 2007, described sports betting as an ongoing component of their financial plans. That compares with 14% of millennials, 6% of Gen X and just 1% of baby boomers.

The gap widens further when it comes to actual behavior. More than half of Gen Z respondents, 52%, said they had redirected money originally earmarked for investing into sports betting during the past year, with 14% doing so multiple times a month, a pattern that points to habitual rather than occasional diversion.

Only around a third of Gen Z investors said they don’t bet on sports at all, against 63% across all four generations combined.

Sarah Levy, Betterment CEO, framed the findings as a warning sign for the wealth management industry.

“When a prediction market or sportsbook starts to feel like a retirement strategy, we have a problem. 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.”

Growth backs the trend

Legal sports betting continues to expand across the US, with commercial revenue rising 22.8% to nearly $17 billion in 2025, according to the American Gaming Association.

The trade body has meanwhile taken its concerns over prediction markets to Capitol Hill, pushing Congress to bring sports event contracts under the same state gaming rules as regulated sportsbooks.

Prediction markets have added a further layer of competition for discretionary dollars, distinct from the sports betting figures above.

Robinhood Markets launched event contracts inside its app in 2025 and has since described the business as its fastest-growing unit. Kalshi has outpaced sportsbooks on pricing during the World Cup earlier this year.

A separate survey published earlier in 2026 found 15% of Americans had already placed a bet through an event-based prediction market.

Betterment’s researchers connect the shift to wider financial pressure on younger adults. As homeownership and other traditional wealth milestones feel increasingly out of reach, some Gen Z investors are turning to higher-risk, higher-reward options including sports betting, prediction markets and crypto to try to close the gap faster than conventional saving allows.

Trust in AI grows too

The survey also tracked where younger investors get their financial information, and the results show real movement away from traditional channels.

Social media overtook other channels as Gen Z’s top source of financial news, cited by 60% of respondents, up from 45% in 2024 and nearly three times the share who cite a financial advisor.

Trust in artificial intelligence for financial advice remains low overall, at 31% across all generations, but Betterment found that among those who do trust it, the impact is real. 53% said AI had influenced a financial decision they otherwise would not have made, including 48% of Gen Z respondents specifically.

Operators and suppliers marketing to younger players now have survey data behind what many already suspected. For a meaningful share of Gen Z, sports betting and prediction markets sit inside the same mental account as retirement saving, not outside it, competing directly for the same dollars, the same attention and increasingly the same social-media feed.