Gen Z Is Treating Sports Betting Like an Investment Strategy — Experts Warn Years of Lost Compounding Could Also Shrink Future Social Security Benefits

Sports betting is becoming a more common way for Gen Z to try to grow their money, but financial experts warn that relying on gambling income could leave a gap in their Social Security benefits later in life.

Michael Ryan, a finance expert and founder of MichaelRyanMoney.com, told the publication that the key concern is what the betting money replaced. If it would have gone toward a Roth IRA, 401(k), brokerage account or emergency fund, he said the lost opportunity could mean decades of missed compounding, reported Newsweek on Friday.

In Betterment’s 2026 Retail Investor Survey, published in August, 52% of Gen Z investors said they had redirected money meant for investing to sports betting at least once in the past year. Another 14% said they did so multiple times a month.

The Money Being Taken From Investments

Alex Beene, a financial literacy instructor at the University of Tennessee at Martin, said that money not invested in a person’s 20s could lose 40 or 50 years of potential growth. He also pointed to research connecting expanded online betting with lower investment and greater debt, according to the report.

Earlier research has highlighted how smartphones have made online betting easier to access, while microbetting can encourage rapid, repeated wagers. Research has also linked legalized online sports betting with higher bankruptcy, crime and deteriorating credit.

Social Security Risk

Recreational gambling winnings can be taxable, but generally do not count toward the covered earnings record used for Social Security retirement benefits.

Kevin Thompson, CEO of 9i Capital Group, told Newsweek that Gen Z could ultimately have "less Social Security income to rely on" as younger Americans pursue faster gains amid high living costs.

Beene said sports betting itself would not bankrupt Social Security, but inadequate private savings could leave a generation more dependent on a program already facing funding challenges.

Disclaimer: This content was produced with the help of AI tools and was reviewed and published by Benzinga editors.

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