Wagering on sports outcomes has exploded in the 2020s, but recent surveys show just how widespread gambling has become for Generation Z.

A survey of retail investors released in August by Betterment, an investment advisory platform, found that 66% of Gen Z investors participate in sports betting. The Bank of America Institute found in a September report that Gen Z made up almost 50% of all online betting activity in July, during the height of the 2026 FIFA World Cup, outnumbering millennials for the first time.

"It is more unusual for someone not to have, for example, a Kalshi account, DraftKings … than it is" to have such an account, said Cynthia Grant, vice president of clinical at Birches Health, which provides online therapy for online gambling addiction recovery. "It's part of the experience of watching sports now."

Sports betting surged after a 2018 U.S. Supreme Court allowing state-authorized sportsbooks, which have since spread to 30 states. The introduction of sports-related event contracts on prediction markets — which claim they are financial trades, not wagers — in early 2025 further expanded access to additional states without legalized sportsbooks, and to those under 21.

Now, the proliferation of sports betting has many financial and mental health advisors on edge. The average user on both a sportsbook and prediction market loses money, and trying to claw back losses puts users in even deeper financial holes, experts warn. Unsurprisingly, those who lose the most are at the greatest risk of harmful mental health outcomes.

Gambling as investment

The Bank of America Institute survey found that Gen Z was twice as likely to see sports betting as a type of investment, versus 20% of respondents overall. For prediction markets alone, respondents overall saw them as a form of investing, but those numbers were again higher for Gen Z.

In Betterment's retail investor survey, 52% of Gen Z respondents said they moved money originally meant for investment to sports betting, while another 26% saw wagering as a part of their long-term financial strategy.

Management at sportsbooks DraftKings and FanDuel typically say their products are entertainment, not investment. Prediction market platforms say event contracts, no matter the category, are a financial derivative.

Dan Egan, director of behavioral finance and investing at Betterment, said sports betting increasingly appears alongside traditional investments on the same app or device, helping drive the association.

The conflation is concerning because of the highly active behavior required to manage wagers on sports, unlike a long-term investment, Egan said.

"It's not an asset that grows with the economy, that kind of gets better as time goes on, that has a positive expected return, and that you can kind of sit back and not have to do anything with," he said. "It's the exact opposite."

Bank of America also found that the median deposit account balance for households use online betting was 59% of balances for those who didn't.

An August survey by BadCredit found that 44% of survey respondents started trading on prediction market platforms in hopes of scoring extra income. That's despite the fact the majority of sportsbooks and prediction market users lose money.

"People tend to tell other people how much money they've made," said Erica Sandberg, a consumer finance expert at BadCredit. "If you've got people around you who are saying, 'I just made $300 in five minutes on this platform,' you're gonna hear about it. You will not hear that they lost $800 last month."

Mental health worries

How a sports betting addiction develops, and when it gets to the point where treatment is needed, varies by individual. But, there are common warning signs, Grant said.

"It creeps into the way that they're functioning in the world, how they interact with their peers, how they interact with family," she said. "They lose time on work, they lose time in school. So when you start to see what we call clinically, 'functional impairment,' that things are interfering with the way that they're trying to navigate the world, that's when we really start to look at how this is developing into being a problem."

It's little surprise young people are more likely to take up sports wagers as biological development brings a heightened appetite for risk, said Amaura Kemmerer at UWill, a mental health and wellness provider helping to support more than four million students at 500 institutions around the world.

Consequences often arise well short of clinical treatment.

Even players who are only dabbling, and "doing it occasionally … are still having predictable negative effects on academics," Kemmerer said, noting the impact sports betting is having on Gen Z college students.

As a result, the perfect place to help combat the negative effects of gambling is on college campuses, both Kemmerer and Grant said, noting campus counseling services should treat it as they would other types of addiction.

Betting platforms themselves have tried to mitigate risks. All regulated sportsbooks and prediction market exchanges have age verification tools. FanDuel and DraftKings let users set self-imposed deposit or time limits. FanDuel also imposes monthly deposit limits on accounts held by users under age 26.

Polymarket on Wednesday announced optional self-imposed limits and a partnership with Birches Health to give users access to mental health resources. Kalshi does the same, as well as directing 18-to-21-year-old users to risk-management programs after they place their first trades. It donated $2 million in May to the National Council on Problem Gambling.

"We've prioritized making Kalshi the safest venue for people to trade on," spokesperson Elisabeth Diana said in a statement.

Experts stressed that not all forms of sports betting are harmful, but emphasized that motivation and frequency need to be clear, especially for young people.

"Lots of people do it to make things more interesting," Egan said. "It makes the game more exciting. You just have to figure out how to say this is entertainment."

If you or someone you know has a gambling addiction, call the National Council on Problem Gambling hotline: 1-800-522-4700.

Disclosure: CNBC and Kalshi have a commercial relationship that includes customer acquisition and a minority investment.