Facts on BUSINESS SEPTEMBER 2026

Sportsbooks Are Competing for the Brokerage Account

By iGaming Review · Published 18 September 2026

New Bank of America data shows Gen Z is the fastest growing share of its betting customers.

Betting Dressed in the Language of Investing

The clearest evidence of that self description comes from Betterment, the robo adviser that competes directly with sportsbooks for young savers' spare cash. Its 2026 Retail Investor Survey, fielded among 1,000 US retail investors this spring, found that 52 percent of Gen Z respondents had redirected money originally set aside for investing into sports betting over the past year, and 26 percent now treat betting as a deliberate part of their long term financial strategy. Betterment's own framing of the finding, delivered by chief executive Sarah Levy, casts the trend as a warning sign for the wider financial services industry. That framing serves the company's commercial interest as much as it describes a real behaviour. Even so, the direction lines up with separate research: a Northwestern Mutual study conducted with the Harris Poll found Gen Z shows the strongest signs of what researchers termed financial nihilism, the sense of being behind and reaching for speculative shortcuts as a result.

That self description has an economic root as much as a psychological one. A Northwestern Mutual study found that 80 percent of Gen Z respondents already investing in or considering high-risk speculative assets said they felt financially behind. They believed those assets could help them reach their financial goals more effectively than traditional methods. As housing affordability remains a challenge and everyday costs keep climbing, that calculation is not simply irrational, it is a response to a genuine affordability gap: a fast, visible win can look more achievable than a decade of retirement contributions, even when the underlying odds say otherwise.
Robert Kosciuk, a 32 year old New York investor profiled by Bloomberg, shows how that logic gets applied in practice. He says he uses the same reasoning for his sports bets that he uses for stock picks, treating both as searches for a mispriced probability. Betterment's own survey shows this is not one mindset but several. Fifteen percent of Gen Z investors said they use sports betting to accelerate a specific financial goal, more than 10 percent called it part of a high risk investment strategy, 23 percent set aside separate "fun money" for it, and 14 percent said they redirect investing money toward betting several times a month.

Dan Egan, Betterment's VP of Behavioral Finance & Investing, argues the more consequential risk is not any single loss but "the erosion of a coherent financial strategy" that follows once those categories blur.
Economist Allison Schrager adds a complementary explanation: a generation raised with less exposure to ordinary, calibrated risk taking in childhood can end up more prone to badly judged risk as adults, a tendency a multi year bull market has compounded by making returns feel closer to a certainty than a risk. Betterment's own data adds a channel effect: Gen Z investors cite social media more often than financial advisers as a source of financial news, a feed that does not distinguish between a stock tip and a same-game parlay.

Regulators See the Same Blur From Both Sides

Two regulators, on opposite sides of the Atlantic, are responding to this convergence in different ways. In the United States, the Commodity Futures Trading Commission asked Kalshi to shut down its sports injury event contracts in early September, days before the season opener, after the exchange had let users trade on the health status of players such as Luka Doncic and Malik Nabers. The request follows a June 2026 CFTC rulemaking proposal naming player injury contracts as likely contrary to the public interest, citing concerns including perverse financial incentives, the confidentiality of athletes' medical information, and insufficient resistance to manipulation. The comment period on that proposal closed in late July, but the rule itself remains unfinalized. The underlying dispute, over whether such contracts belong under financial-market or gambling regulation, remains unresolved. Congress has bipartisan legislation in progress aimed at federal consumer protections, including age verification, amid reporting that users as young as 18 have traded billions of dollars on sports and parlay type contracts through Kalshi.

The National Council on Problem Gambling has been pressing the same point from the public health side for over a year. In comments to the CFTC, NCPG argued that regardless of legal classification, betting on event futures is functionally gambling for many customers, and should carry the same protections mandated for licensed sportsbooks: spending limits, access to play history, and visible links to support services. As Cole Wogoman, the council's director of government relations and league partnerships, told iGaming Review, "now it is like the Wild West" when it comes to oversight of prediction platforms.

In the United Kingdom, the Financial Conduct Authority has been examining the same convergence from the other direction. A 2024 FCA experiment tested four digital engagement practices, flashing prices, push notifications, a trader leaderboard showing top traders by returns, and points linked to a prize draw, for their effect on trading behaviour. Push notifications and points linked to a prize draw increased trading frequency by 11 percent and 12 percent respectively, and increased the proportion of trades made in the riskiest investments by 8 percent and 6 percent respectively, with some effects more pronounced among younger participants and those with lower financial literacy. None of the four features produced a statistically significant increase in the riskiness of participants' final portfolios. Apps built for stock trading are picking up the persuasion techniques that gambling platforms have used for years, at the same moment gambling platforms are picking up the vocabulary of investing.

For operators, the lesson is not that regulators have settled anything. It is that the identity a product claims for itself, investment platform or entertainment product, is no longer a marketing choice made in isolation.