For a lot of Gen Z, gambling is investing

In the past year, more than half of Gen Z say they've taken dollars intended for investing and put it toward sports gambling. The line between investing and gambling has become blurry, and the reason is easy to see: sports betting commercials advertise hundreds of dollars in free bets for a small deposit, profit boosts for every NBA playoff game, and offers to turn five dollars into two hundred "instantly." Eight years after the federal ban on sports betting was struck down, the effects on younger people are becoming clear.

The confusion between hobby and investment

Dan Egan, Vice President of Behavioral Science and Investing at Betterment, studied how different generations relate to investing and gambling. His firm's recent poll found that about a quarter of Gen Z — people aged roughly 18 to 29 — view sports betting as a high-risk investment strategy or a way to accelerate some financial goal. "I think you know number one, it's not good," Egan said.

He explained that one driver is overconfidence: "I watch a ton of basketball. I can spot a winner." But there's also a deeper economic frustration. "I think that's one of the drivers is the idea that in order to get ahead just, like doing my job, saving regularly and focusing on my career isn't going to be enough, I have to have some big financial wins."