26% of Gen Z Investors Include Sports Betting in Their Financial Strategy – Don’t Mistake Gambling for Retirement Investing

The boundary between long-term wealth accumulation and short-term speculation has officially dissolved for a vast segment of the investing public. 

Frankly, I feel like many of us more grizzled veterans have tried to demonstrate that “gambling” while calling it “investing” is OK to do with money you can afford to lose. 

But don’t fool yourself into thinking it is the same as building a financial future that you can count on. You can take the high-percentage shot, or stand at the half court line all day, and tell your friends you made one… after four hours of trying.

Betterment’s 2026 Retail Investor Survey quantifies just how deeply gamified trading, prediction markets, and sports betting have invaded financial behavior. The findings reveal that 26% of Gen Z investors view sports betting as a deliberate component of their long-term financial strategy. That’s versus only 12% across all retail investors and a negligible 1% among Baby Boomers. To me, anything more than 5% is a WTF moment (why tempt fate?).

Even more alarming, over 52% of Gen Z respondents admitted to actively redirecting funds originally intended for brokerage or retirement accounts directly into sports wagers, with 14% making those capital transfers multiple times a month. 

I’m sorry, but I dabble in sports betting, and wager dollars at a time on horse racing a few days a week. But that’s entertainment, not investing! My deal is to deposit $100-$150 into the wagering site… then see how long I can make it last. It is more like the options trading I do around earnings announcements, or when a chart looks too good to pass up, but in a market area that is too volatile to allocate a bigger position size too. But I suspect that there’s not a lot of contemplation of “position sizing” in the behavior Betterment has documented. 

This apparent generational shift goes well beyond casual entertainment. These “market participants” are re-engineering how people take risks. Maybe this old guy’s views miss the pioneering aspect of what is happening. I doubt it. I saw human nature at work in 1987, 2000, and 2008. It smells the same now.

Why Are More People Gambling Instead Of Owning Homes?

When traditional financial milestones like home ownership feel out of reach, high-frequency speculation becomes a substitute for traditional saving. We have witnessed the rapid rise of integrated prediction markets on mainstream trading apps. That has gone a long way toward blurring the lines further. It turns macro events, economic releases, and sporting outcomes into instant-settlement binary options. 

Betterment Chief Executive Officer Sarah Levy warned that when a prediction market or sportsbook starts to feel like a retirement strategy, institutional risk models must account for a fundamental change in retail behavior, noting that these platforms are engineered for quick scores rather than decade-long wealth building. Not to mention, identifying the “suckers” at the card table, and catering to them. 

Gambling: There’s an ETF for That

For market participants looking to actually invest in this behavioral shift, I’ll again call your attention to the Roundhill Sports Betting & iGaming ETF (BETZ). BETZ holds pure-play exposure across sportsbook operators, gaming platforms, and technology enablers such as DraftKings (DKNG) and Flutter Entertainment (FLUT), the owner of Fanduel and other brands. As retail capital shifts seamlessly between trading stock options and placing wagers on sports or prediction markets, revenue streams across these platforms become tightly correlated with overall market liquidity and consumer risk appetite. Here’s a look at BETZ’s top holdings.

Investing is not the same as seeking action in high-frequency trading apps and online sportsbook interfaces. The latter are structurally engineered for rapid turnover and giving the house a distinct edge. 

When a quarter of younger market participants confuse the sportsbook with a 401(k), that can eventually suppress long-term returns. The type that funds retirements. I can only imagine what happens if AI starts stealing both blue-collar and white-collar jobs at a rate anywhere near expected. 

That’s the curmudgeon in me talking. I’d love to be wrong about this, long term. But I don’t think I am. And kudos to Betterment for bringing these results forward, and giving us all something to think very hard about. 

Rob Isbitts is a semi-retired CIO, former fiduciary investment advisor, and Barchart columnist. Check out his other work at ETFYourself.com (featuring the Fresh Charts weekly trading post), and ROAR.PiTrade.com, helping investors to better-manage their own portfolios.