More people under 30 are using gambling as a shortcut to buying a home or paying student loans
If you're going to bet on sports, you have to know your budget.
Say you're a 25-year-old climbing the ranks in a traditional career like sales or technology or nursing, and you're thinking about how you're going to attain the American dream. You would like to get married, have 2.5 kids and buy a house with a white picket fence.
Financial advisers would tell you to put aside a sum that is reasonable for you into a high-yield savings account and steadily build toward a down payment. You'll earn about 4% on your deposits, and if you save $100 a week at 4% interest, it would take you about six years to save up $35,000 for 10% down.
Too slow for you?
A new Betterment survey indicates that a portion of Generation Z, now aged 19 to 29, would rather amp up their winnings from sports betting, with 11% treating gambling as investing and diverting money from traditional portfolios for this cause, and 15% actually using it as a way to accelerate their financial goals, whether that's a down payment, an existing mortgage payment, paying off student loans or taking a major vacation.
"It's one thing to say 'I know it's high risk and I'm playing around with it,' but it's another thing to have a house payment due and the way I'm going to get it is by sports betting," said Dan Egan, vice president of behavioral finance and investing for Betterment.
When Betterment highlighted their new survey, they combined these two numbers to say that "26% of Gen Z investors say they treat sports betting as a deliberate, ongoing part of their long-term financial strategy," and financial experts tut-tutted this as hubris.
"A statistic like that is genuinely concerning," Mark Stancato, a financial adviser based in Decatur, Ga., told MarketWatch.
"I am Gen Z and see plenty of my friends throw money into sports betting. None of them would tell you that it was a part of their financial plan, unless they were trying to make a joke," said Dinon Hughes, a certified financial planner based in Portsmouth, N.H.
Egan doesn't think Betterment was being punked by Gen Z respondents to their survey, who were roughly a quarter of the 1,000 questioned for its 2026 retail investor survey. Millennials and Gen Xers also exhibited the same behaviors to a much lesser extent. No boomers said they used sports betting to accelerate financial goals, but 1% said they treated it like a high-risk part of their portfolio. A Northwestern Mutual study in the spring echoed these sentiments as well.
It seemed more likely to Egan that the Betterment survey was catching the leading edge of a troubling mindset shift.
"More and more in America, we see that in order to 'get ahead,' it's not enough to earn money. You need wealth growth," he said. "Just working a job and saving doesn't feel like what's in front of them today. There's a lot of pressure, and Gen Z right now is saying 'I have to take big swings to get onto the ladder.'"
The way financial adviser Jeff Judge has seen it work with his clients is that sports betting - and other similar behavior like prediction markets and other gambling - have shifted from occasional Vegas-weekend pursuits to line items in budgets. He has not yet seen it go further than that to a true portion of their portfolios, but he has had to rein clients back in when they go too far. They treat it as spending money, not an investment class, which he thinks is the healthier version of gambling.
"Winnings that get swept into a brokerage account are the tell," he said. "That's someone who understands the difference between a bet and a position, even if the money came from the same source."
Judge has one client who sets aside 10% of income for gambling, mostly sports betting with some table games in Las Vegas. He doesn't fight that. It's budgeted, capped, and it doesn't touch retirement contributions or emergency savings. "What I watch for is whether the number moves," he said. "Ten percent that stays 10% is discipline. Ten percent that creeps to 15 after a bad month chasing losses is a different conversation, and I've had that conversation more than once."
Wins and losses
The thing about putting your down-payment fund into a high-yield savings account is that you will never lose it. Gambling is binary: win or lose. When you lose, you lose your whole bet. When you win, you get your payout minus the cut for the house and for taxes, which many people forget about. This can still be big money, though.
Judge said he regularly sees swings in the tens of thousands of dollars, which is not a problem in itself, but depends on the size of the person's total holdings. The general rule of thumb for the high-risk portion of a wealthy person's portfolio is 5% - that's for alternative investments like hedge funds, private equity, real-estate speculation and cryptocurrency.
The Gen Zers in Betterment's survey who are aggressive with their investing portfolios are adding sports betting to that list, which is what financial experts balk at. "I would not consider either sports betting or prediction markets as asset classes," said Egan. "No adviser is recommending it. As much as it's self-management, it's people saying 'I'm going to put 3% of annual salary on sports.' It's the same as my friends who love cars. They buy cars. They say, 'I hope I don't lose too much money enjoying these cars.'"
In that sense, as budgeted entertainment, sports betting is no worse than car collecting or golf or buying fine wine. Losses are consumption. Some advisers, however, see potential problems in what happens after an upswing. Is that money rolled back into betting, potentially to be lost?
"When winnings come in, my advice is simple: Sweep it, don't stake it," Judge said. "That client who moves winnings straight into a brokerage account is doing exactly what I'd tell anyone to do. Treat house money like income, not like bankroll. The bigger risk isn't the betting itself, it's when a client starts mentally counting gambling wins as part of their net-worth trajectory, then anchor retirement timing to a good streak."
For those looking to counter risky Gen Z gambling behavior, Egan suggested a much better bet: themselves. "If they want to get ahead, invest in an appreciating asset, and the best one is themselves - their career, training, skill set, connections and ability to be flexible."
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