Researchers found online sports betting reduced household savings, while a Betterment survey found 52% of its Gen Z respondents had redirected investment money to betting, putting household finances in focus.
Researchers in the Journal of Financial Economics compared household transaction records across states that legalized online sports betting at different times. They found savings fell after legalization, with larger reductions for frequent bettors and households with limited savings.
Bank of America Institute data offer a separate measure of money moving through online betting platforms. From January through July 2026, payments returning to customers’ accounts from those platforms averaged less than three-quarters of the amounts customers sent to them. The analysis covered sportsbooks and prediction markets but excluded winnings kept on the platforms, so the ratio does not establish bettors’ net profits or losses. In July, Gen Z and Millennials represented 88% of Bank of America customers with observed betting activity; about 5% of the bank’s customers participated that month.
Betterment’s online survey of 1,000 U.S. retail investors, conducted March 27 to April 3, 2026, found that 52% of Gen Z respondents had shifted money intended for investing to sports betting in the prior year. Another 26% of Gen Z respondents said betting was a deliberate part of their long-term financial strategy. The poll does not state the amounts involved and does not represent all Gen Z adults or bettors.
CNBC reported a hypothetical by strategist Jamie Franco in which the $50 from a lost wager at age 25 is invested for 40 years instead. With an assumed 7% annual return, the balance would reach about $750 before fees and taxes, including roughly $700 in growth beyond the original amount. The illustration is not an observed loss or a return forecast.
The American Gaming Association reported that state-regulated sports betting generated $16.96 billion in U.S. revenue and $3.71 billion in taxes in 2025. Industry expansion followed the U.S. Supreme Court’s 2018 Murphy v. NCAA decision, which struck down federal provisions that had restricted states from authorizing sports gambling.
Betterment CEO Sarah Levy said the survey raised concerns about how betting fits into financial planning: “When a prediction market or sportsbook starts to feel like a retirement strategy, we have a problem.”
