Betting against the house: Blurred lines between gambling and investing

Article 10 min read Published September 30, 2026

From teens to retirees, more Americans are engaging with betting platforms often without fully understanding the financial consequences.

Key takeaways

A growing trend. The rapid growth of sports betting and prediction market platforms has made wagering more accessible than ever, increasing participation across all age groups.
The age of adolescence: Research suggests gambling behavior is rising among adolescents, highlighting the importance of family conversations about financial risk, decision-making and responsible money habits.
The impact on aging Americans. Older adults and retirees may also be vulnerable to excessive gambling activity, which can undermine retirement savings and long-term financial goals.
Gambling is not investing. Prediction markets and sports betting may feel similar to investing, but they generally do not provide ownership in an asset or create long-term value.
A strategic approach to wealth. Building wealth is typically rooted in diversification, discipline, patience and a long-term strategy rather than wagering on uncertain outcomes.
Problem gambling. If gambling behavior begins to affect financial well-being, support and professional resources are available to help individuals and families address the issue.

Whether watching international major tennis events, global soccer matches or national basketball games, sports fans are being inundated with advertising from the latest names in prediction markets and sports betting. The explosion of online sports betting stems from the U.S. Supreme Court ruling in the 2018 Murphy v. National Collegiate Athletics Association (NCAA) case which struck down a federal ban that had prevented states from choosing to legalize bookmaking. The Supreme Court’s decision invalidated key provisions of the Professional and Amateur Sports Protection Act of 1992 (PAPSA), allowing states to decide whether and how to legalize and regulate sports wagering. It wasn’t long after states began adopting the change that sportsbook platforms began taking over coveted advertising spots.

The rise of prediction market participation in tweens and teens

As sports betting apps have grown in popularity, it isn’t just legal adults following the allure of quick cash and the rush of getting it right. Common Sense Media released a report with findings from a study on gambling behavior among adolescent boys. The study found that 36% of boys ages 11 to 17 reported gambling in the past year, rising significantly from 32% of boys age 11 to 49% of those age 17.

And according to the report, for boys today gambling isn’t happening at casinos or card tables. “It lives in sports betting and inside the games our sons already love - in loot boxes, skin cases, and other reward systems that blur the line between playing and paying - and it's being pushed to them on the social media sites they use every day.”

Even more astounding, keeping in mind these are children ages 11-17, the report showed that among boys who gamble, one-third (34%) participate in sports-related gambling. Common Sense Media also found that digital and traditional media may reinforce gambling, as nearly 6 in 10 boys see gambling ads during live or streaming sports.

Prediction markets have made it easy to bet on the outcome of all kinds of events, not just sports. Certain prediction market platforms operate under federal regulatory frameworks that differ from traditional sports wagering, and the legal classification of these markets continues to evolve.

“Many clients are just as concerned about the financial habits of their children and grandchildren as they are about their own financial future,” shares Leslie Carter-Prall, Head of Regions Private Wealth Management. “As betting platforms become more visible and accessible, families have an opportunity to talk about risk, reward and the behaviors that support long-term financial well-being.”

Morningstar explored how prediction markets and sports betting apps have turbocharged teen gambling with most of the behavior flying under parental radar. Parents may assume the companies or states have sufficient protections in place to prevent underage gambling. However, as has been extensively covered on the topic of social media age verification, these measures may not always prevent underage access.

The impact of online gambling on retirement

More than 75 million – or one in five – adult Americans have an account with an online betting service according to an article in the AARP Bulletin. Like targeted marketing to tweens and teens, online gambling – often online casinos - and prediction market platforms have become increasingly visible to older adults. They often position their platforms with a lure of connection or an escape from the everyday doldrums. For some individuals, excessive gambling activity can negatively affect savings, retirement income and overall financial well-being.

Organizations such as Gamblers Anonymous have reported increases in calls from adults age 50 and older, signaling a rise in problem gambling even among those still in their peak retirement savings years from age 40 to age 60.

For those firmly in retirement, online casinos may be an alluring outlet. The legality of online casino gaming varies significantly by state. The American Gaming Association found that offshore and sweepstakes operators focus their advertising efforts on Florida and Texas which have the highest number of residents over age 65.

Don’t confuse gambling with investing

The problem with prediction markets and sports betting isn't necessarily the games themselves; it's when they blur the line between it and investing.

Investing involves the allocation of capital, money, or resources into assets with the expectation of generating an income or profit over time. It denotes a form of ownership and puts money to work in financial vehicles like stocks, bonds or real estate to achieve long-term financial goals.

Gambling is the act of risking finances or a valuable item on an uncertain event with the primary intention of winning additional money or prizes. It requires three core elements: consideration (an amount wagered), risk or chance and a potential prize.

Kiplinger noted four key reasons why prediction markets and sports gambling aren’t investing.

Lack of ownership or value creation.
The math doesn’t add up – also known as ‘the house always wins.’
You can’t diversify a bet.
Skill is real, but unreliable and rarely enough.

“As new technologies and platforms make it easier than ever to place a wager or speculate on an outcome, it's important not to lose sight of what creates lasting financial security,” advises Carter-Prall. “Building wealth has traditionally been rooted in patience, discipline and a long-term plan. For many families, this is also an opportunity to have an ongoing dialogue about responsible financial decision-making and the difference between investing and taking a chance.”

Key considerations for conversations about prediction market risk

Unlike the stock market or real estate investments, prediction markets may not provide the ownership interests or underlying assets typically associated with traditional investments. Even small losses can add up and impact savings goals, big and small.

If you or someone you love struggles with the effects of online gambling, there is help available. The National Problem Gambling Helpline is available 24 hours a day, seven days a week at 800-697-3738. Gamblers Anonymous is a 12-step program available nationwide and offers a directory and resources at gamblersanonymous.com.

Talk to your wealth advisor about:

Explore alternative investments that may help diversify risk and expose capital to other asset classes.
Things to consider during volatile markets: retirement planning, estate planning and where to look for investments outside the stock market.

Want to get started with wealth planning?
Our wealth management guide can help on your journey to building wealth.

Interested in talking with an advisor but don’t have one?
Find a Wealth Advisor in your area.

Frequently asked questions

Investing involves allocating money to assets such as stocks, bonds, or real estate with the expectation of creating value and pursuing long-term financial goals. Gambling involves risking money on an uncertain outcome for the chance of a financial reward. While both involve risk, investing is generally tied to ownership and long-term growth, whereas gambling is based on winning or losing a wager.

Prediction markets allow participants to speculate on future events, but they generally do not provide ownership in an underlying asset. Although they may resemble financial markets in some ways, they are typically different from traditional investments designed to build long-term wealth.

Digital platforms have made participation faster and more convenient. Increased advertising, mobile access, and expanded legal availability in many areas have also contributed to growing interest in betting-related activities.

Regular gambling losses can reduce money available for retirement savings, emergency reserves, and other financial priorities. Over time, even relatively small losses may have a meaningful impact on long-term financial security.

Many younger individuals encounter gambling-related content through sports, gaming platforms, and social media. Parents may benefit from discussing financial decision-making, risk, and the differences between investing, entertainment, and gambling as part of broader financial education.

Individuals seeking to build wealth may consider diversified investment portfolios, retirement accounts, alternative investments, and comprehensive financial planning strategies aligned with their goals and risk tolerance. A wealth advisor can help determine the most appropriate approach.

Resources such as the National Problem Gambling Helpline and Gamblers Anonymous offer support, education, and treatment referrals for individuals and families affected by gambling-related issues