Sports betting is pulling money away from retirement savings for Gen Z investors, according to Betterment’s fourth annual Retail Investor Survey, released on Wednesday.
More than half of Gen Z investors, 52%, redirected money earmarked for investing into sports betting over the past year, and 26% call it a deliberate part of their long-term financial strategy. Just over 30% said sports betting isn’t part of their activity at all, well below the 63% who said the same across the full sample. The shares drop steadily with age, to 31% and 14% for millennials, 10% and 6% for Gen X, and 4% and 1% for baby boomers.
Betterment surveyed 1,000 US retail investors online between March 27 and April 3. Chief executive Sarah Levy said in a statement that when a prediction market or sportsbook “starts to feel like a retirement strategy, we have a problem,” adding that the products push people toward chasing short-term wins rather than building wealth over time.
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Legal sports betting has grown from about $400 million to $17 billion in seven years and is now legal in 39 states. Sportsbooks keep roughly 10% of everything wagered on average, compared with the historical return of a diversified stock portfolio.
A separate Northwestern Mutual survey conducted in January found 32% of Gen Z had invested in or were considering prediction markets or sports betting, using a different methodology that grouped the two categories together.
