More than half of Gen Z investors have redirected money originally earmarked for investing into sports betting over the past year, according to Betterment's 2026 Retail Investor Survey, released this week. The survey, conducted in April 2026 among 1,000 U.S. retail investors across four generations, found that 52% of Gen Z respondents had diverted funds from their investment allocations to sports betting. Additionally, 26% of Gen Z now consider sports betting a deliberate component of their long-term financial strategy.
Sarah Levy, CEO of Betterment, a robo-advisor RIA managing over $70 billion in assets, expressed concern: "When a prediction market or sportsbook starts to feel like a retirement strategy, we have a problem. These products are designed to keep people seeking the next quick score, not to help them build toward the next decade." Levy's comments underscore a growing tension between the allure of speculative wagering and the discipline required for wealth accumulation.
The Betterment findings align with a separate January 2026 Northwestern Mutual study, conducted by the Harris Poll among 4,357 U.S. adults. That study found that among respondents who feel financially behind, 32% of Gen Z and 24% of Millennials are currently participating in or considering prediction markets or sports betting. Roughly 80% of those respondents said high-risk speculative investments would help them reach their goals more effectively than traditional models.
Levy added, "Younger investors deserve access to the tools and information that meet them where they are, but the industry also has a responsibility to be clear about the difference between participating in a trend and building lasting wealth." The survey also revealed that social media has become Gen Z's most commonly cited source for financial news, rising from 45% in 2024 to 60% in 2026—nearly three times the 21% of Gen Z investors who cited a financial advisor.
The trend is not limited to retail investors. In a January interview with Bloomberg, an industry executive noted, "We'll leave the sports gambling, which constitutes 95% of the prediction markets volume, we'll leave that to the gambling houses—the FanDuels, the DraftKings and the Robinhoods." Robinhood has fully embraced offering prediction markets on sporting events, processing more than 16 billion event contracts through June 2026 and generating $156 million in second-quarter 2026 revenue—up more than tenfold year-over-year. Robinhood now earns more from prediction markets than from stock trades, with wagering transactions surging during the FIFA World Cup.
For financial advisors, these findings highlight the need to address the growing influence of speculative platforms on younger clients' portfolios. As financial strain prompts many Gen Z and Millennials to postpone major life events, advisors may need to recalibrate their guidance to counter the appeal of quick wins. The rise of sports betting as an investment substitute also parallels the growing interest in sports-related investments, though the risk profiles differ sharply.
Betterment's survey underscores a broader shift in how younger generations approach financial planning, with social media and gamified platforms increasingly displacing traditional advice channels. As outsourcing investment management can boost advisor productivity, firms may need to adopt new tools to engage clients who are more comfortable with digital interfaces than with human advisors.
The data also raises questions about the long-term implications for wealth building. While sports betting can offer entertainment value, its role in retirement planning remains dubious. Advisors are urged to have candid conversations with younger clients about the difference between speculation and investing, and to emphasize the power of compounding over the allure of a single big win.
