Gen Z Is Twice as Likely to Call Sports Betting an Investment, BofA Finds

A Perception Gap Matching Industry Positioning

The survey ran from March 24 to 31, covering 2,351 people. Significant majorities of Baby Boomers and Gen X rejected the idea that sports betting is investing, though roughly a third of both groups still declined to treat event contracts as a legitimate investment, leaving the balance of those generations more open to the idea for prediction markets than for sportsbooks.

Economist Taylor Bowley set out the report’s main findings directly. “According to a Bank of America proprietary survey, 20% of respondents consider sports betting as a type of investment, although more consider it not a form of investing,” she said. “Gen Z is twice as likely to consider sports betting as a form of investing; however, across all generations, buying event contracts on prediction markets was more likely to be considered an investment than sports betting.” A key addition: “Prediction markets, crypto assets, retail trading, and sports betting all share common features such as community participation and real-time pricing.”

This gap in perception or definition is the argument at the center of the industry’s legal position. Kalshi’s defense against state gambling regulators, now before the Supreme Court after New Jersey’s certiorari petition, holds that sports event contracts are financial instruments under federal commodities law rather than wagers under state law. Many consumers appear to read them the same way.

The blurring Bank of America describes has drawn notice from outside the sector. Asked in March whether he disapproved of “prediction markets, of legalized sports gambling, even of day trading,” Warren Buffett declined to separate the three, saying state gambling revenue “actually relieves the taxes on me or other rich people” and agreeing that it amounted to “a tax on stupidity.”

Within the industry, the comparison is treated as harder to make than it looks. Pierre Lindh, co-founder of iGaming media group Next.io, told Bitcoin.com News in June that the NBA Finals produced near-parity between sportsbooks and prediction markets in true handle, while cautioning that “the handle is not apples to apples in that regard, which makes the industry a little bit more difficult to compare.”

Separately from the survey, the bank tracked anonymized customer payments to and from betting platforms and found the online betting cash recovery ratio stayed below 1 across the January to July period. “Customers typically recover less than 75 cents for every dollar transferred to online betting platforms,” Bowley said, though the research notes the data captures deposits and withdrawals only. This means winnings left sitting on platforms are not reflected.

Gen Z recovered more than any other generation per this metric, with most getting back over 80 cents per dollar, but still fell short of breaking even, “suggesting that online betting is not a reliable or constant source of income,” Bowley said.