Sports betting is becoming part of the financial habits of some young Americans, and a recent Betterment survey shows how far that trend may be reaching. More than half of Gen Z adults ages 18 to 29 said they had used money meant for retirement investing on sports betting during the past year. About 14% said they did it several times a month.

That shift has raised concerns among financial professionals because betting and investing serve very different purposes. Betterment CEO Sarah Levy told Yahoo Finance, “When a prediction market or sportsbook starts to feel like a retirement strategy, we have a problem.”

Betting as a Strategy

The Betterment survey found that about 26% of Gen Z investors view sports betting as a “deliberate, ongoing part of their long-term financial strategy.” The share was much lower among older generations: about 14% of millennials, 6% of Gen X, and 1% of baby boomers.

Gemini AI | Most Gen Z investors view sports betting as casual entertainment rather than a serious financial strategy.

Still, sports betting is not a financial habit for every young investor. More than three in 10 Gen Z adults said they completely avoid using it as an investment strategy. Among those who participate, roughly one-quarter described the money as “fun money.”

Levy said betting products are not designed to help people build wealth over the next decade. She also said the financial industry has a responsibility to make the difference clear between following a trend and building long-term wealth.

Betterment Vice President of Behavioral Investing Dan Egan also urged young investors to create boundaries between speculative activities and long-term financial goals.

Why Risk Appeals to Gen Z

The trend is tied to wider concerns about financial security. A Northwestern Mutual study published in March found that Gen Z and millennials represent a large share of Americans interested in high-risk assets, including cryptocurrency, prediction markets, sports betting, options, and meme stocks.

Nearly one-third of investors ages 18 to 29 said they were either investing in or considering investing in crypto, sports betting, or prediction markets. That figure was similar to millennials but considerably higher than among baby boomers.

For many younger adults, speed is part of the appeal. Eight in 10 Gen Z investors said they believe riskier financial vehicles can help them reach their goals faster than traditional approaches. Among millennials who felt financially behind, two-thirds shared that view.

Young Adults Under Pressure

Young adults are dealing with several financial pressures at once, including a difficult job market, high housing costs, and student loan payments. Northwestern Mutual found that three-quarters of U.S. adults attracted to high-risk assets said they felt “financially behind.”

Only about half said they felt financially secure and viewed themselves as disciplined financial planners.

Freepik | garetsvisual | Overwhelmed by living costs and debt, many young adults resort to high-risk investments to catch up financially.

Northwestern Mutual wealth management adviser Ashley Russo warned that time plays a major role in investing. She told Yahoo Finance, “Time is our most powerful asset in finance, and aggressive bets can erode that advantage faster than you can recover.”

The Sports Betting Alliance, which represents legal online operators such as FanDuel, DraftKings, BetMGM, and Fanatics Sportsbook, also stressed the distinction.

SBA President Joe Maloney said sports betting is entertainment rather than an investment or wealth-building strategy. He advised adults who choose to bet to use a set entertainment budget and avoid money needed for savings or essential expenses.

Legal sportsbooks also offer tools that allow customers to set spending limits, monitor activity, and seek support when needed.

What the Trend Means

Sports betting may feel financially similar to investing when apps, odds, market movements, and potential returns appear side by side. The underlying risks are different, though. Retirement investing generally relies on long-term growth, while betting depends on individual outcomes and can quickly reduce money set aside for future needs.

For younger adults already worried about falling behind financially, using retirement funds for short-term bets can create another setback.

The Betterment and Northwestern Mutual findings point to a clear concern: some Gen Z investors are turning to speculative activities because traditional financial progress can seem too slow. Sports betting can remain entertainment when it stays within a defined budget, but money reserved for retirement serves a different purpose.

Keeping those two goals separate can help young investors protect long-term savings while still making room for controlled discretionary spending.