Over half of adult Generation Z members aged 18 to 29 have directed money intended for retirement investments toward sports betting over the past year, according to a recent survey by the investment and financial advisory app Betterment. Among them, 14% do this several times a month.
“When a prediction market or bookmaker starts being perceived as a retirement strategy, we have a problem,” said Betterment CEO Sarah Levy to Yahoo Finance. She added that these products “are not designed to help them build capital over the next decade,” and the industry “has a responsibility to clearly distinguish between participating in a trend and building long-term capital.”
Betting as part of financial strategy
According to the survey, about 26% of Generation Z investors view sports betting as “a deliberate, ongoing part of their long-term financial strategy.” In comparison, this figure is approximately 14% among millennials, 6% among Generation X, and only 1% among baby boomers.
Meanwhile, over 3 out of 10 adult Generation Z members completely avoid sports betting as an investment strategy. Among those who do bet, about a quarter consider it “money for entertainment.” Dan Egan, Betterment’s vice president of behavioral investing, noted that young investors need “guardrails to separate their speculative interests from building long-term capital and prevent them from unintentionally jeopardizing their future for instant gratification.”
Appeal of high-risk assets
The appeal of sports betting this year has also been the subject of other studies. According to a Northwestern Mutual study published in March, Generation Z and millennials make up the largest share of Americans who invest or consider investing in high-risk speculative assets such as cryptocurrencies, prediction markets, sports betting, options, and meme stocks.
In this report, nearly a third of investors aged 18 to 29 said they invest or consider investing money in cryptocurrencies, sports betting, or prediction markets. This is roughly comparable to the figures among millennials but significantly higher than those among baby boomers.
Young adults now face a challenging job market and rapidly rising housing costs, often combined with the need to repay student loans. Overall, three-quarters of adults in the U.S. attracted to high-risk assets said it is related to feeling “financially behind,” according to the Northwestern Mutual study. Only about half of them feel “financially secure” and consider themselves “disciplined” financial planners.
Eight out of 10 Generation Z investors believe these risky instruments can help them achieve their goals faster than traditional methods. Among millennials who feel “financially behind,” two-thirds share this view.
Source: Yahoo
