Maybe You Should Skip That Parlay: New Data Says Sports Betters Have 41% Less Money in Their Bank Accounts

Every once in a while, you run into a sure thing. Maybe your favorite team is playing a bunch of losers, your star quarterback is having a streak, and you only need three more legs to turn $20 into $400. What could possibly go wrong, right?

According to new data from Bank of America (BAC), a lot could go wrong.

It turns out people who are into online betting have substantially less money sitting in their bank accounts than people who don’t. In 2026, gamblers had a median deposit account balance equal to just 59% of the balance held by households without online betting activity. 

Translation: People who gamble have 41% less money in their bank accounts.

There are a couple of caveats here, and it doesn’t prove that sports betting is going to send you to the poorhouse. But this report is pretty difficult to shrug off, and it also paints a damning picture of how investors are engaging with prediction markets. So, let’s crunch the numbers.

The House Always Wins

A couple of weeks ago, Bank of America Institute published a new report diving into the economics behind online betting. Researchers looked at the money flowing in and out of these platforms, and the results speak for themselves.

For the analyzed period, the amount of money customers won averaged less than three-quarters of the money they were paying into those platforms. That means for every dollar people are gambling online, they’re only getting about $0.75 back. Worse, the cash recovery ratio for gamblers stayed below the break-even point throughout the entire study.

Simply put: Online betting isn’t functioning as a reliable source of income for a lot of people. That’s bad news for ordinary gamblers, but great news for everybody who works on the other side of the business.

Online betting is definitely rising in popularity. Bank of America data reported adoption had increased 40% year-over-year, and the number of first-time users had more than tripled between January and July. Gen Z and Millennials are particularly hooked, accounting for 88% of online betting activity over the summer.

That makes sense. Every gambling platform on the planet seems to have a slick app that sends nonstop push notifications, and it makes betting really convenient for young people. But convenience cuts both ways, and it looks like people are starting to lean a bit too heavily on some of these apps.

We're Starting to Treat Gambling Like Investing

This Bank of America report is packed with a lot of data, and most of it shouldn’t surprise us. Sports betting is growing, and people who gamble have less money. That tracks. But what’s really interesting is the bank’s findings on prediction markets.

More and more apps are now letting people buy contracts tied to everything from elections to the deaths of celebrities and other real-world outcomes. As a result, 20% of the people that Bank of America surveyed said they thought these contracts were a type of investment. Members of Gen Z were twice as likely as other generations to classify prediction markets as an investment.

It’s not hard to see why. Have you ever opened a prediction market and watched prices move from $0.40 to $0.65? 

It looks a lot more like trading stock than sitting in a sportsbook and placing a bet on the Yankees. There are charts, there are prices, and there are entire markets built around them. Peers are discussing probabilities in real time, and it’s easy to convince yourself that you’re placing money on an informed decision.

This is a powerful psychological distinction that’s blurring the line between entertainment and investment. It’s also creating a strange problem for regulators.

Even though young people seem to think betting on elections is the same as buying shares of stock, these aren’t products that fit neatly into the traditional boxes. Bookies take a wager on the outcome of a game. Prediction markets offer standardized contracts that pay out if or when a particular event occurs.

Lately, the Commodity Futures Trading Commission (CFTC) has been trying to make the case that event contracts traded on federally regulated exchanges qualify as derivatives under the Commodity Exchange Act. But elsewhere, self-serving state governments and tribal regulators are arguing that betting on sports and entertainment contracts should stay under the jurisdiction of state gaming laws.

It’s hard to say who’s going to win this argument, but it doesn’t make a difference to your bank account. 

When you buy a stock, and it dips by 15%, you still own that stock. There’s every chance it’ll bounce back, and you’ll win in the long run. Losing a sports bet doesn’t work that way. The game ends, the contract expires, and the money is gone. That’s the danger in treating these contracts like traditional asset classes, which brings us right back to the parlay.

At the end of the day, there’s nothing wrong with spending a little money on entertainment. But only if you can afford to lose it. When households start treating betting like an investment, it’s worth remembering what the numbers are actually saying: The people who are gambling aren’t sitting on huge piles of cash. They’re sitting on 41% less of it.

On the date of publication, Nash Riggins did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.