Gen Zers may have an unhealthy relationship with sports betting, arguing that the activity may constitute a form of long-term financial investment, driving more than 1 in 4 people in the demographic to engage with the activity for what researchers suggest are the wrong reasons.
Gen Zers Are Betting Big on Sports to Secure Their Financial Future
According to Betterment, 26% of Gen Zers view sports wagering as a way to enhance their long-term financial prospects, with 52% of young people admitting that they have put money that would have otherwise gone to retirement or brokerage into sports betting.
In a statement commenting on the findings, Betterment CEO Sarah Levy had this to add:
“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.
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.”
The Retail Investor Survey highlighted how prevalent this behavior is among the demographic and asked important questions about the sustainability of the habit. But even outside this group, one in eight investors, or 12%, also treat sports betting as part of their long-term investment strategy.
Sports Betting Is Not Investing But Gen Zers Won’t Hear It
Boomers and Millennials seem to be the most reasonable generations when it comes to sports gambling, with the numbers falling to 6% and 1% for the group, respectively.
Gen Zers also tend to engage with sports betting more than other generations. About 66% of Gen Zers bet on sports, compared to only 37% of all investors.
Another issue Betterment flags is the fact that Gen Zers mix the activities in their mind, which, according to VP of behavioral investing at Betterment, Dan Egan, leads to “the erosion of coherent financial strategy.”
For example, a sports bettor who commits $1,000 into sports betting could take half of this amount and invest it in the S&P 500’s to grow the amount to $246,000 over the course of 20 years.