More than half of Gen Z investors have funneled cash into sports betting—but they’re not coming close to breaking even

Research from the Bank of America Institute found that one in five Americans view sports betting as an investment. Among Gen Z, that figure doubles to two in five.

A recent Betterment survey of 1,000 U.S. retail investors dug deeper. It found that 52% of Gen Z investors redirected money intended for investing into sports betting in the past year, and 14% said they do so multiple times a month. Meanwhile, 26% of Gen Z investors said they treat sports betting as a deliberate part of their long-term financial strategy.

The problem: Online sports betting is largely a losing game. Sportsbooks build a fee into every wager, known as the vig, which makes it difficult for a series of bets to turn a profit. BofA, which tracked payments flowing to and from betting platforms, found that customers across every generation recovered less than 75 cents for every dollar they sent in each month this year. Gen Z fared best, with most getting back more than 80 cents per dollar—but that’s still well short of breaking even.

Digital platforms also make it easier to bet often. Survey data cited by BofA found that nearly a quarter of sports bettors wager daily, while another third bet weekly.

“The confluence and surging popularity of AI legal betting apps and prediction markets have really led lots of Gen Z guys to believe that they can beat the system,” Zach Hirsch, a Gen Z podcaster and sports handicapper, told Fortune.

Younger adults dominate the online betting scene. In July, as the World Cup fueled a spike in betting activity, Gen Z and millennials made up 88% of all online betting activity, according to BofA. Gen Z alone accounted for 48%, overtaking millennials as the largest generational share of bettors for the first time.

That habit can weigh on long-term financial well-being. BofA found that median deposit balances for betting households in 2026 were just 59% of those of non-betting households. And a Federal Reserve Bank of New York study found that credit card delinquencies among sports bettors under 40 jumped 26% after legalization.

So is this Gen Z angst? Are young people choosing gambling over financial hope? The Urban Institute set out to answer that question with a nationally representative survey of more than 3,000 adults, comparing the financial attitudes and behaviors of Gen Z adults (ages 18 to 29) with those of older Americans.

“Rather than being either purely nihilistic or completely savvy, today’s young adults are navigating what we see as a complex financial landscape with caution, creativity, and ambition,” Thea Garon, director of the Financial Well-Being Hub at the Urban Institute, told Fortune. “They’re embracing really a mix of both traditional and non-traditional financial strategies to build wealth and financial security during challenging economic times.”

Nearly half of Gen Z respondents (45%) said they’re more focused on meeting today’s needs than on saving for the future. Many also feel the deck is stacked against them: 65% say their generation faces tougher economic circumstances than previous generations, and 52% say their generation must take more risks to reach its financial goals.

The fine line between investing and gambling

As for what counts as risky financial behavior, Natasha Schüll, an associate professor of media, culture, and communication at NYU, notes that investing and gambling haven’t always been seen as drastically different. She said investing apps are becoming more game-like, stock trading platforms are adding prediction markets, and the language used to describe investing and gambling is converging.

“I don’t think it’s that Gen Z doesn’t understand the difference between investing and gambling. I don’t think Gen Zers sort of have this corrupted attitude,” Schüll told Fortune. “I feel like contemporary financial and betting platforms kind of make the boundary between the two more porous.”

As a result, some Gen Zers see sports betting as just another part of their portfolio, alongside stocks or crypto. Hirsch acknowledges that the line between gambling and investing can seem blurry. But he said he bets rarely, and only after doing in-depth research.

“I personally approach sports opportunities as I approach any other market,” Hirsch said.

Garon notes that most people who bet on sports do so infrequently and with small amounts of money. And the share of all young adults who bet is smaller than the investor-focused Betterment numbers might suggest: Urban found that 17% of Gen Z adults had bet on sports in the past year. Still, 15% of Gen Z sports bettors told the Urban Institute they’ve saved less money than they would have if they weren’t betting.

The Urban Institute also found that Gen Z is surprisingly optimistic about its financial future. Some 56% of Gen Z respondents believe their personal finances will improve in the next year, and 42% believe they’ll end up better off financially than their parents.

“This just tends to fly in the face of the narrative you hear that young people expect the future to be all doom and gloom,” Garon said. “I think it speaks to the fact that young people have optimism, particularly about their personal financial futures, despite the current economic challenges.”