"Earned 400 Dollars in 5 Minutes?"... U.S. Gen Z Going All-In on Betting Instead of Stocks

66% of Gen Z Investors Have Experience with Sports Betting
Market Rapidly Expanding Since Legalization in 2018

As sports betting rapidly spreads among Generation Z investors in the United States, concerns are mounting among financial and mental health experts. Some young investors are viewing sports betting not as entertainment, but as an investment strategy.

In a survey of individual investors, 66% of Millennials and Gen Z participants reported engaging in sports betting. Additionally, 52% revealed that they had shifted money originally intended for investment into sports betting, and 26% viewed this as part of a long-term financial strategy. Getty Images

66% of Generation Z Participate in Sports Betting, View It as an Investment Method

According to CNBC on October 4 (local time), as the use of sportsbooks and prediction markets increases, participation in betting among younger generations is rising rapidly. Sportsbooks are specialized companies that accept bets on the outcomes of various games or player records and pay out winnings. The main business model sets the odds based on expert analysis, but incorporates an internal fee known as the 'vig' into the odds. This ensures stable profits for the company regardless of game outcomes.

In a survey of individual investors released by investment advisory platform Betterment in August, 66% of Generation Z investors reported participating in sports betting. Additionally, 52% stated they had shifted money originally intended for investing to sports betting, and 26% said they consider it part of a long-term financial strategy.

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A similar trend was observed in a report from the Bank of America (BofA) Institute last month. Generation Z was about twice as likely as other respondents to perceive sports betting as an investment vehicle. In July, for the first time, Generation Z overtook Millennials in overall online betting activity, and together, Generation Z and Millennials accounted for 88% of the total.

“Having a Betting Account Is a Given for Watching Sports"... Gambling Embedded in Everyday Life

Cynthia Grant, Clinical Vice President at Birch's Health, an online gambling addiction treatment center, said, "These days, it's actually rare to find someone who doesn't have an account on sports betting platforms like FanDuel or DraftKings," adding, "Betting has become part of the experience of watching sports."

The screen of 'FanDuel', a U.S. sports betting specialized platform. It is advertised that if you bet 5 dollars (about 7,000 won), you can win 300 dollars (about 400,000 won). Photo by The Boston Globe

The U.S. sports betting market has grown rapidly since the Supreme Court allowed each state to legalize sports betting in 2018. Currently, sports betting is legal in 30 states.

Furthermore, from 2025, event contract products based on the outcome of sports games will be officially introduced in prediction markets, increasing accessibility. In some prediction markets, even residents of states where sportsbooks are not yet legalized or users under the age of 21 can use related products.

Moving Investment Funds to Betting... Experts Warn of Actual Losses

The problem is that many young people confuse sports betting with investing. Dan Egan, Director of Behavioral Finance and Investing at Betterment, pointed out, "It's easy for the two concepts to get mixed up because both sports betting and traditional investment products are offered together on the same smartphone or app."

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He explained, "Sports betting is the complete opposite of assets whose value rises along with economic growth and which can generate positive long-term expected returns." In reality, sportsbook and prediction market users lose money on average. According to BofA, the median balance in savings accounts for households that engage in online betting is only 59% of the balance for households that do not.

The background for young people turning to betting includes the expectation of making money quickly. In a survey conducted by credit information company BadCredit in August, 44% of respondents said they began trading in prediction markets to earn extra income. Consumer finance expert Erica Sandberg commented, "People often pay attention when someone says they made 300 dollars (about 400,000 won) in five minutes, but no one pays attention to the fact that that person lost 800 dollars (about 1 million won) last month."

Risk of Addiction When It Starts Affecting Studies or Work

Mental health experts warn that the risk of gambling problems increases as losses from betting mount. Grant explained that when sports betting begins to affect relationships with friends or family, or disrupt studies or work, and when it starts to infringe upon study or work hours, it can clinically be considered the “functional impairment” stage.

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The industry is also expanding measures to mitigate risks. Major U.S. online sports betting platforms such as DraftKings and FanDuel allow users to set their own deposit limits and usage times. Some prediction market platforms have also introduced access restrictions and mental health support programs.

Experts emphasized that not all sports betting is immediately harmful, but that it is important for young people to perceive it as entertainment, not an investment vehicle. Egan stated, "Many people place bets to make watching games more exciting," adding, "What matters is making clear that this is entertainment, not investment."

This content was produced with the assistance of AI translation services.