Betterment CEO Sarah Levy has expressed concern over the growing trend among Gen Z investors who are increasingly integrating sports betting and prediction markets into their long-term financial strategies. According to a Betterment survey, 26% of Gen Z investors view sports betting as a deliberate component of their financial plans, a significant contrast to 14% of millennials, 6% of Gen X, and 1% of baby boomers.
More than half of young investors have redirected money intended for investing into sports betting within the past year, with 14% doing so multiple times a month. Only about one-third of Gen Z respondents abstain from sports betting, compared to 63% across all surveyed generations. Levy stated that these products are designed for immediate gratification rather than sustained wealth building.
This trend is fueled by the rapid expansion of legal sports betting, which has become an almost $17 billion industry in the U.S. Prediction markets have also seen explosive growth; Robinhood Markets Inc.'s prediction markets, launched in 2025, are now its fastest-growing unit. The shift away from traditional investing is partly attributed to younger adults feeling financially behind due to worsening housing affordability and rising living costs, leading them to high-risk areas like sports betting and crypto to achieve financial goals faster, as indicated by a Northwestern Mutual study.
