The number of first-time online sports bettors more than tripled in June and July compared to January, largely due to the FIFA World Cup and expanding prediction markets. Overall online betting participation increased by 40% in July compared to the beginning of the year, according to a Bank of America report. This surge was predominantly driven by younger consumers, with Gen Z and Millennials accounting for 88% of all online betting activity in July.
Despite the significant increase in activity, online betting is generally not a source of income for most participants. Bank of America data shows that on average, customers receive less than 75 cents for every dollar they transfer to betting platforms. While Gen Z had the highest cash recovery ratio among all age groups, their inflows still fell substantially short of their outflows, indicating that profitability is rare.
Some consumers, particularly younger generations, are beginning to view sports betting as a form of investment. A Bank of America proprietary survey found that 20% of respondents consider sports betting an investment, with Gen Z being twice as likely to hold this view. Financial therapists are noting a trend where clients incorporate small, regular bets, typically between $10 and $50, into their financial plans, although winnings often remain on platforms, leading to potential friction in partnerships.
The increase in online betting is fueled by promotions, advertising, and major sporting events. The momentum is expected to continue with events like the US Open and the upcoming football season. Mabi Moeng, a 22-year-old from Brooklyn, described her negative experience, losing $10 on Kalshi and viewing such apps as predatory due to their potential impact on financial and mental health.
