Bank of America is now fairly certain that sports betting is a bad deal for gamblers, who are taking back roughly $0.75 on the dollar on every bet they place.
BofA Cites Poor Returns for People Who Put Money on Sports Betting
The BofA comments are specifically targeted at people who think they can turn their sports betting pastime or knowledge into an activity that generates steady income, with the numbers suggesting that bettors are looking at a net loss most of the time.
In a note, Bank of America Institute’s Taylor Bowey wrote: “Our analysis found the online betting cash recovery ratio has remained below 1, with total inflows less than three-quarters of total outflows on average for the duration of the series. In other words, customers typically recover less than 75 cents for every dollar transferred to online betting platforms.”
BofA did not entirely dismiss the concept of sports bettors turning a profit, or making income out of the activity, but the bank offered sobering returns in this regard: only about 3% to 5% of sports bettors are actually able to turn a profit, questioning whether sports betting (and prediction markets) could ever be a supplemental or main source of income.
No Generation Breaks Even – Ever
BofA similarly analyzed whether any generation had been able to reach break-even from their prediction market or sports betting activity, with Gen Z generally having the highest betting recovery ratio but still failing to reach the break-even threshold, at around $0.82 on the dollar.
“Despite seemingly recovering more than older generations, total inflows remained substantially below total outflows, suggesting that online betting is not a reliable or constant source of income,” BofA observed about Gen Zers.
More importantly, 20% of respondents confirmed that sports betting could be a form of investment, although there is a caveat that it is not a typical form of investment. Gen Zers were twice as likely to consider sports betting a form of investment as well.
In the meantime, Baby Boomers and Gen X remain guarded about sports betting, and they do not give in to the fallacy that it constitutes a form of investment.