DraftKings website placed on a laptop on Wednesday, September 17, 2025 in New Hyde Park, New York, USA.
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Betting on sports outcomes has exploded in the 2020s, and recent research has revealed just how widespread gambling is among Gen Z.
A survey of retail investors released in August by investment advisory platform Betterment found that 66% of Gen Z investors participate in sports betting. The Bank of America Research Institute revealed in a September report that Gen Z accounted for nearly 50% of all online gambling activity in July, right in the middle of the 2026 FIFA World Cup, surpassing Millennials for the first time.
“For example, it’s rarer to find someone who doesn’t have a Karshi account. draft kings “It’s more like having an account like that,” said Cynthia Grant, vice president of clinical affairs at Birches Health, which offers online treatment for online gambling recovery. “It’s now part of the sports viewing experience.”
Sports betting exploded after the U.S. Supreme Court allowed state-licensed sportsbooks in 2018, and has since spread to 30 states. In early 2025, the introduction of sports-related event contracts in betting markets (claimed to be financial transactions rather than bets) further expanded access to states without legalized sportsbooks and to people under 21.
The current surge in sports betting is alarming many financial and mental health advisors. Experts warn that the average user of both sportsbooks and prediction markets is losing money, and trying to recoup those losses will put users into an even deeper financial hole. Not surprisingly, those who have suffered the most losses are at greatest risk of adverse mental health outcomes.
gambling as an investment
According to a Bank of America Institute study, Gen Z is twice as likely to consider sports betting as a type of investment, compared to 20% of respondents overall. When it comes to prediction markets, respondents across the board view prediction markets as a form of investment, although this number is still higher among Gen Z.
In the Betterment Individual Investor Survey, 52% of Gen Z respondents said they had moved money originally intended for investment into sports betting, and an additional 26% said they considered gambling to be part of their long-term financial strategy.
Executives at sportsbooks DraftKings and FanDuel typically argue that their products are entertainment, not investment. Prediction market platforms state that event contracts, regardless of category, are financial derivatives.
Dan Egan, director of behavioral finance and investing at Betterment, said sports betting is growing alongside traditional investing on the same apps and devices, helping to drive the association forward.
Egan said this confusion is concerning because unlike long-term investments, managing sports betting requires very active action.
“It’s not an asset that grows with the economy, it gets better over time, it has a positive expected return, it’s not an asset that you can sit around doing nothing about,” he said. It’s quite the opposite.
Bank of America also found that the median savings account balance of households that use online gambling is 59% of the balance of households that do not use online gambling.
An August study by BadCredit found that 44% of survey respondents started trading on prediction market platforms in hopes of earning additional income. This is despite the fact that the vast majority of sportsbook and prediction market users are losing money.
“People tend to tell other people how much money they make,” said Erica Sandberg, a consumer finance expert at Bad Credit. “If you know someone who says, ‘I made $300 in five minutes on this platform,’ you’re going to hear about that. You’re not going to hear about someone who lost $800 last month.”
Female student, fatigue and university burnout with headaches, stress of paper deadlines and studying for exams in the library. Campus, university, and exhausting studies with scholarship issues and mental health distress
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Mental health concerns
How sports gambling addiction develops and when treatment is needed varies from person to person. But there are common red flags, Grant said.
“It creeps into how they function in the world, how they interact with their co-workers, how they interact with their families,” she said. “They lose time at work, they lose time at school. So when you start to see that things, what we clinically call ‘dysfunction’, are interfering with the way they try to live in the world, that’s when we really start to look at how that’s becoming a problem.”
Amaura Kemmerer of UWill, a mental health and wellness provider that helps support more than 4 million students in 500 educational institutions around the world, said it’s no surprise that young people are more likely to participate in sports betting, as biological development leads to an increased appetite for risk.
Consequences often occur before clinical treatment can reach them.
Kemmerer pointed to the impact sports betting is having on Gen Z college students, saying even “occasional” players are having predictable negative effects on their academics.
As a result, the best place to combat the negative effects of gambling is on a college campus, Kemmerer and Grant said, noting that campus counseling services should treat gambling like any other type of addiction.
Betting platforms themselves have sought to reduce risk. All regulated sportsbooks and prediction market exchanges have age verification tools. FanDuel and DraftKings allow users to set their own deposit limits and time limits. FanDuel also imposes monthly deposit limits on accounts held by users under 26 years of age.
Polymarket on Wednesday announced voluntary restrictions and a partnership with Birches Health to provide users with access to mental health resources. Kalsi does something similar, guiding users between the ages of 18 and 21 through a risk management program after making their first trade. The company donated $2 million to the National Council on Problem Gambling in May.
“Our priority has been to make Karshi the safest place for people to do business,” spokeswoman Elizabeth Diana said in a statement.
Experts said not all sports betting is harmful, but stressed the need to clarify motivations and frequency, especially for young people.
“A lot of people do that to make things more interesting,” Egan said. “It makes the game more exciting. We just have to figure out how to call this entertainment.”
If you or someone you know has a gambling problem, call the National Council on Problem Gambling hotline at 1-800-522-4700.
Disclosure: CNBC and Kalsi have a commercial relationship that includes customer acquisition and minority ownership.
