Sports betting has become deeply embedded in Generation Z‘s engagement with sports, with surveys revealing the extent of this trend. A recent report from Betterment shows that 66% of Gen Z retail investors participate in sports wagering. Meanwhile, during the 2026 FIFA World Cup in July, Gen Z accounted for nearly half of all online bets, surpassing millennials for the first time, according to a Bank of America Institute analysis.
Widespread adoption:
Cynthia Grant, vice president of clinical services at Birches Health, an online therapy provider specializing in gambling addiction recovery, emphasized the normalization of sports betting among young people. She noted, “It is more unusual for someone not to have, for example, a Kalshi account, DraftKings … than it is to have such an account. It’s part of the experience of watching sports now.” The legalization of state-authorized sportsbooks following a 2018 U.S. Supreme Court ruling has expanded sports betting to 30 states. The arrival of prediction markets in early 2025, which offer event contracts classified as financial trades rather than bets, further broadened access, including for users under 21 and in states without legalized sportsbooks.
Financial risks and perceptions:
Experts voice concern as many users lose money on both sportsbooks and prediction markets. Attempting to recover losses can deepen financial problems, with heavier losses correlating to increased mental health risks. The Bank of America Institute report found Gen Z twice as likely as the general population to view sports betting as an investment. Betterment’s survey revealed over half of Gen Z respondents had diverted funds originally intended for investing into sports betting, and 26% considered it part of their long-term financial strategy.
Industry stance and behavioral insights:
Companies like DraftKings and FanDuel maintain that their offerings serve as entertainment rather than investments. In contrast, prediction market platforms argue event contracts are financial derivatives. Dan Egan, director of behavioral finance at Betterment, highlighted that sports betting increasingly appears alongside traditional investments on the same apps, which may blur users’ understanding. He warned this association is problematic because sports betting demands active management and does not yield positive expected returns over time, unlike traditional assets.
Economic impact on users:
Bank of America also reported that households engaging in online betting have median deposit account balances about 59% of those who do not bet online. A survey from BadCredit in August showed 44% of respondents started trading on prediction markets hoping for extra income, despite the typical financial losses these platforms incur. Erica Sandberg, a consumer finance expert, noted that success stories are often shared publicly while losses remain unspoken, creating skewed perceptions among bettors.
Addiction and functional impairment:
Cynthia Grant explained that the development of sports betting addiction varies but typically manifests through disruptions in daily functioning, such as diminished time for work or school and strained social interactions. She noted, “When things interfere with the way they’re trying to navigate the world, that’s when we start to examine the problem more seriously.” Amaura Kemmerer from UWill, a mental health provider supporting college students worldwide, pointed out that young people’s biological predisposition to risk-taking contributes to the prevalence of sports betting. Even occasional bettors face academic drawbacks as a consequence.
Addressing the issue on campuses:
Both Grant and Kemmerer recommend that college counseling services treat sports betting issues comparable to other addictions. Campuses could serve as critical intervention points to mitigate negative effects on students’ mental health and academic performance.
Industry measures for risk reduction:
Regulated sportsbooks and prediction markets have implemented age verification controls. DraftKings and FanDuel offer users self-imposed limits on deposits and time spent betting. FanDuel also restricts monthly deposits for users under 26. Polymarket recently introduced optional self-imposed limits and partnered with Birches Health to provide mental health resources. Kalshi directs young users aged 18 to 21 to risk management programs after their initial trades and contributed $2 million to related initiatives in May.
