Gen Z treats sports betting as investing, Betterment finds

26% of Gen Z retail investors in the United States treat sports betting as a deliberate part of their long-term financial strategy, according to Betterment’s 2026 Retail Investor Survey.

The same survey found that 52% of Gen Z respondents had redirected money intended for retirement or brokerage accounts into sports betting over the past year.

Betterment, a US digital investment platform, commissioned the panel provider Sago to run the study between 27 March and 3 April 2026. It covers 1,000 US retail investors split evenly across Gen Z, Millennials, Gen X and Baby Boomers. Respondents had to hold at least one qualifying investment, and people whose only holding was a 401(k) were excluded.

“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,” said Betterment CEO Sarah Levy.

Money moving out of investment accounts

The 52% figure covers self-reported behaviour over 12 months, not a single deposit. It describes money leaving one category of account and arriving in another.

The two headline figures measure different things. 52% describes an action taken, while 26% describes intent, the share who place that action inside a plan. The gap between them is the group moving investment money into betting without calling it a strategy.

Betterment published the sports betting figures for Gen Z only. It did not release equivalent percentages for Millennials, Gen X or Baby Boomers, so the survey supports no direct generational comparison on either question despite the sample being split evenly across the four groups.

The survey pairs the Gen Z findings with weak confidence about outcomes. Across all respondents, 55% reported general financial optimism, but only 44% said they were confident about retirement. Gen X was the least confident generation at 31%.

Social media and AI in place of advisers

Betterment recorded a sharp change in where Gen Z gets financial information. 60% now name social media as a source of financial news, up from 45% in 2024. Only 21% of the same group cite a financial adviser.

Attitudes to automated advice split by age. 41% of Gen Z said they were comfortable using AI for long-term financial planning, against 5% of Baby Boomers. 48% of Gen Z said AI had already influenced a financial decision. Trust in AI for financial advice across the whole sample was 31%, and of those who said they trusted it, 53% said it had shaped their decisions.

“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,” Levy said.

The prediction market overlap

Levy named prediction markets alongside sportsbooks. Those platforms use the vocabulary of investing directly: Kalshi and Polymarket list event outcomes as tradable contracts, with positions, prices and settlement.

Prediction markets have drawn both capital and regulatory action in 2026. Kalshi raised $1 billion at a $22 billion valuation in March 2026. It is also in competing lawsuits with Rhode Island over whether its sports contracts amount to unlicensed gambling, and Minnesota’s Senate passed a ban on prediction markets and sweepstakes casinos in May 2026.

What operators face next

The survey is consumer research from an investment company, and Betterment competes for the same deposits it is measuring. US state legislatures and courts are separately deciding how prediction market products should be classified and sold.

For sportsbooks and prediction market operators marketing to under-35s, the question the data raises is whether investment vocabulary in acquisition and retention messaging becomes a compliance exposure. No US regulator has yet acted specifically on the framing of betting as investing. State-level litigation over prediction market contracts continues through 2026, and any finding that these products are gambling rather than trading would apply to the marketing as much as to the licence.

Source: Betterment