The Draft Kings website installed on a laptop in New Hyde Park, New York, USA, Wednesday, September 17, 2025.
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Betting on sports scores exploded in the 2020s, but recent surveys show just how prevalent gambling has become for Gen Z.
A survey of retail investors released in August by Betterment, an investment advisory platform, found that 66% of Gen Z investors participate in sports betting. The Bank of America Institute found in a September report that Generation Z accounted for nearly 50% of all online betting activity in July, at the height of the 2026 FIFA World Cup, surpassing millennials for the first time.
“It’s more unusual for someone not to have, for example, a Kalshi account, DraftKings …than it is” to have such an account, said Cynthia Grant, vice president of clinics at Birches Health, which offers online therapy for the treatment of online gaming addiction. “It’s part of the experience of watching sports now.”
Sports betting surged after the U.S. Supreme Court in 2018 allowed state-licensed sports betting, which has since expanded to 30 states. The introduction of sports-related event contracts on prediction markets – which claim they are financial exchanges, not betting – in early 2025 has further expanded access to other states without legalized sports betting, as well as to under-21s.
Today, the proliferation of sports betting worries many financial and mental health advisors. The average user in the sports betting and predictions market loses money, and trying to recoup losses puts users in even deeper financial holes, experts warn. Unsurprisingly, those who lose the most are at the greatest risk of mental health problems.
Gambling as an investment
The Bank of America Institute survey found that Gen Z was twice as likely to view sports betting as a type of investment, compared to 20% of overall respondents. For prediction markets alone, respondents overall view them as a form of investment, but these numbers were again higher for Gen Z.
In Betterment’s survey of retail investors, 52% of Gen Z respondents said they shifted money originally intended for investing into sports betting, while an additional 26% considered betting as part of their long-term financial strategy.
Executives at sports betting sites DraftKings and FanDuel generally say their products are entertainment, not an investment. Prediction market platforms claim that event contracts, regardless of their category, are financial derivatives.
Dan Egan, director of behavioral finance and investments at Betterment, said sports betting is increasingly appearing alongside traditional investing on the same app or device, helping to drive the association.
This confusion is concerning because of the very active behavior required to run sports betting, unlike a long-term investment, Egan said.
“It’s not an asset that grows with the economy, that improves over time, that has a positive expected return and that you can kind of sit back with without having to do anything,” he said. “It’s exactly the opposite.”
Bank of America also found that the median deposit account balance of households using online betting was 59% of the balances of those who did not.
An August survey by BadCredit found that 44% of respondents started trading on prediction market platforms in hopes of generating additional income. This is despite the fact that the majority of users of sports betting and the prediction market lose money.
“People tend to tell others how much money they’ve made,” said Erica Sandberg, a consumer credit expert at BadCredit. “If you have people around you who say, ‘I just made $300 in five minutes on this platform,’ you’ll hear about it. You won’t hear that they lost $800 last month.”
Student, fatigue with headaches and academic burnout, stress for the essay deadline or studying for exam in the library. Campus, college and study tired with stock market problem and mental health pain
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Mental health concerns
How a sports betting addiction develops and when it reaches the point where treatment is necessary varies among individuals. But there are common warning signs, Grant said.
“It spills over into how they function in the world, how they interact with their peers, with their family,” she said. “They’re losing time at work, they’re losing time at school. So when you start to see what we call clinically, ‘functional impairment,’ that things are interfering with the way they’re trying to navigate the world, that’s when we really start to see how it becomes a problem.”
It’s not surprising that younger people are more likely to participate in sports betting because biological development leads to an increased appetite for risk, said Amaura Kemmerer of UWill, a mental health and wellness provider that helps more than four million students at 500 institutions around the world.
The consequences often occur well before clinical treatment.
Even gamblers who just dabble and “do it from time to time … still have predictable negative effects on academics,” Kemmerer said, highlighting the impact of sports betting on Gen Z students.
As a result, college campuses are the ideal place to combat the negative effects of gambling, Kemmerer and Grant said, emphasizing that campus counseling services should treat it as they would other types of addiction.
Betting platforms themselves have tried to mitigate the risks. All regulated sportsbooks and prediction exchanges have age verification tools. FanDuel and DraftKings allow users to set deposit deadlines or self-imposed deadlines. FanDuel also imposes monthly deposit limits on accounts owned by users under the age of 26.
Polymarket announced voluntary self-imposed limits and a partnership with Birches Health on Wednesday to give users access to mental health resources. Kalshi does the same and directs users aged 18 to 21 to risk management programs after making their first trades. In May, he donated $2 million to the National Council on Problem Gambling.
“We have prioritized making Kalshi the safest place for trade,” spokeswoman Elisabeth Diana said in a statement.
Experts stressed that not all forms of sports betting are harmful, but stressed that the motivation and frequency must be clear, especially for young people.
“A lot of people do it to make things more interesting,” Egan said. “It makes the game more exciting. You just have to figure out how to say it’s entertainment.”
If you or someone you know has a gambling addiction, call the National Council on Problem Gambling Helpline: 1-800-522-4700.
Disclosure: CNBC and Kalshi have a business relationship that includes customer acquisition and minority investment.
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