More than half of Gen Z investors moved investing money into sports bets that lose every month

Sportsbooks build a fee, the vig, into every wager ^[8]. At under 75 cents back per dollar sent, Bank of America's payment data puts the bettor's loss above 25 cents a dollar in every month this year, in every generation ^[3][14]. Gen Z did best, with most of its bettors losing less than 20 cents of each dollar ^[4][15]. A single dollar sent back in every month at 75 cents would be worth about 3 cents after a year. At 80 cents, it would be worth about 7 ^[24][25].

As Fortune reports them, the two figures do not fit the same measure. Gen Z is one of the generations said to recover under 75 cents, yet most Gen Z bettors are said to recover more than 80 ^[3][4][23]. They reconcile if the first is a dollar-weighted total and the second describes the typical bettor. In that reading, a minority of heavy Gen Z bettors lose far more than 20 cents on the dollar and pull the total down. Fortune's report does not say which measure each figure uses, or how many dollars Betterment's respondents actually moved ^[1].

Survey data cited by BofA has nearly a quarter of bettors wagering daily and another third weekly ^[16]. Among Gen Z investors, 14% redirect investing money into betting multiple times a month ^[2]. A dollar-weighted total leans toward exactly those people. Thea Garon, who directs the Urban Institute's Financial Well-Being Hub, points to a smaller version of the problem: most people who bet on sports do so infrequently and with small amounts ^[12]. The balance sheets point the other way. Median deposit balances in betting households this year were 59% of those in non-betting households ^[5]. A Federal Reserve Bank of New York study found credit card delinquencies among bettors under 40 rose 26% after legalization ^[19].

Gen Z's lead is recent, and it came in a tournament month. In July, as the World Cup drove a spike, Gen Z accounted for 48% of online betting activity against 40% for millennials, the first time Gen Z held the largest generational share ^[9][10][22].

I think the payment data settles a question the surveys leave open. Two in five Gen Z adults call sports betting an investment, according to the Bank of America Institute ^[7], and 26% of Gen Z investors in the Betterment survey call it a deliberate part of a long-term plan ^[6]. No generation in BofA's payment data got its dollar back in any month this year ^[3]. A redirected dollar is not compounding in a brokerage account, and it is not rebuilding the deposits that betting households already hold 41% less of ^[18]. The counter-case rests on Garon's point about small, infrequent bets ^[12]: at those sizes the loss looks more like an entertainment budget than a missed contribution. The diversion thesis fails if dollar figures show the redirected money is small next to what the same investors still put into markets.

Zach Hirsch, a Gen Z podcaster and sports handicapper, told Fortune: "The confluence and surging popularity of AI legal betting apps and prediction markets have really led lots of Gen Z guys to believe that they can beat the system." ^[17] He said he bets rarely and only after in-depth research ^[21]. "I personally approach sports opportunities as I approach any other market," Hirsch said ^[20]. Natasha Schüll of NYU said, "I feel like contemporary financial and betting platforms kind of make the boundary between the two more porous." ^[13] In the Urban Institute's survey, 52% of Gen Z respondents said their generation must take more risks to reach its financial goals ^[11]. In BofA's data, this risk has returned less than the stake in every month this year ^[3].