Gen Z Investors Turn to Sports Betting and Prediction Markets for Wealth Growth

Gen Z retail investors in the United States are increasingly integrating sports gambling into their long-term financial strategies, according to survey data from digital wealth platform Betterment first reported by Yahoo Finance.

The study, which surveyed 1,000 U.S. retail investors across four generational groups, revealed that 26% of Gen Z participants consider sports wagering a deliberate, ongoing part of their wealth building plans. By contrast, only 14% of millennials, 6% of Gen X, and 1% of baby boomers view sports betting as a wealth creation vehicle. Meanwhile, 33% of Gen Z respondents stated they do not engage in sports betting, compared to 63% of overall respondents across all four generations.

The shift toward speculative finance comes amid broader economic headwinds for younger demographics. Findings from a March study by Northwestern Mutual Planning & Progress indicate that high housing costs and rising living expenses are prompting individuals to turn to high-risk trades—such as sports betting, prediction markets, and digital assets—to reach financial milestones more quickly.

Financial industry executives have expressed concern regarding the convergence of gambling and asset accumulation. Betterment Chief Executive Officer Sarah Levy warned that platforms centered on short-term gains are poorly suited for wealth building. "When a prediction market or sportsbook starts to feel like a retirement strategy, we have a problem," Levy stated. "These products are designed to keep people seeking the next quick score, not to help them build toward the next decade."

The appetite for high-risk trading has propelled growth for decentralized prediction platforms like Polymarket. Established in 2020 on the Polygon layer-2 Ethereum network, Polymarket operates as the world's largest prediction market, enabling users to trade binary event contracts using Circle's USDC stablecoin across categories such as politics, sports, and cryptocurrency prices.

Trading activity on these platforms has scaled rapidly. In June, during the FIFA World Cup, Polymarket's international exchange generated more than $10.8 billion in monthly notional trading volume, while its domestic exchange recorded over $3.5 billion, according to figures reported by CNBC.

In the U.S., Polymarket functions as a platform registered with the Commodity Futures Trading Commission (CFTC). However, state regulators in Nevada, Michigan, Illinois, and Massachusetts have moved to restrict or ban its sports-related event contracts, asserting that such instruments fall under state gambling laws.

Polymarket and federal regulators contend that prediction markets remain under the exclusive purview of the Commodity Exchange Act. The CFTC has actively contested state-level enforcement actions, including initiating litigation against Nevada. CFTC Chair Michael S. Selig affirmed the agency's legal position, noting, "As I've said before, the CFTC has the expertise and responsibility to defend its exclusive jurisdiction over commodity derivatives, and that's exactly what we'll do." The platform's investor base includes 1789 Capital, the venture firm co-founded by Donald Trump Jr., who also serves as an advisor to the company.