The Gen Z Degen Economy

There have been some sensational headlines lately, focused on young people replacing traditional investment vehicles with sports betting. Depending on which morally judgey, click-baity outlet you favour, supposedly a majority(!) of Gen Z are redirecting money meant for investing into sports betting, with a quarter of them calling it a deliberate part of their long-term financial strategy.

If true, that'd be pretty wild. But let's pump the brakes a little before concluding that all young people are gambling degenerates.

This narrative got its wings with a report from US-based investment app Betterment back in August. It came with PR-friendly statistics like:

• 52% of Gen Z investors have redirected money meant for investing into sports betting in the past year, and;
• 26% of Gen Z investors say they treat sports betting as a deliberate, ongoing part of their long-term financial strategy.

Before we even dip our toes into why these statistics should be met with skepticism, does anyone actually believe that a majority of young people even bet on sports?

If yes, I have some magic beans to sell you.

Look beyond the headlines and what you find is an opt-in panel study with no weighting disclosed. Only 250 Gen Z investors were surveyed. Everyone who screened in also had to hold at least one investment outside a 401(k). We're talking about a slice of a slice of a slice of young people, with no work having been done to try and disclose whether or not the findings are generalizable.

In reality, only about a quarter of 18-34s hold investments outside a retirement plan, so even taken at face value, Betterment's 26% works out to roughly 7% of young adults.

As recently as October, CNBC, Quartz, and others were still citing this low-quality data. Those pieces included headlines or statements like, "two-thirds of Gen Z investors participate in sports betting" or, that "more than half of Gen Z adults ages 18 to 29 put money they had intended to invest for retirement into sports betting."

These are sensationalized spins on already sensationalized data.

More reputable sources tell a different story.

Pew puts the share of under-30s who bet on sports at 31%. That includes casual bets with friends, so someone whose only bet for the year is the $50 they pay into their friend group's hockey pool is included here.

The Urban Institute also published a weighted, probability-based survey on this topic in July - absent from recent media coverage. That survey found only 17% of Gen Z adults had bet on sports in the past year, against 10% of older adults. Only about 2.5% of all Gen Z adults said betting had cut into their saving.

It's true that the proportion of under-30's betting online is rising: from 7% in 2022 to 17% in 2025 according to Pew. But is this a Gen Z thing? Not really.

Every generation has had some form of degen economy

People have always gambled, and young people have always been highly risk tolerant, on average. That's part of youth.

What's changed more recently is how easy it's become to place bets -- no matter the size of the wager.

As we wrote in Young People & Money, reports about young people often mistake life stage for generational insight. This is just the latest example. Because, if you widen the lens to gambling as a whole, the narrative falls apart fast.

Americans 50 and older are more likely to have gambled in the past year than those under 50. And in Canada, in 2018, three years before single-event sports betting was opened to private operators, Statistics Canada found young people were the least likely of any age group to gamble at all.

Every generation has also had its own version of this.

• In a 2006 survey, 31% of Americans over 55 said winning the lottery was their most practical way to build several hundred thousand dollars.
• A 2001 paper titled "Boys Will Be Boys" found men traded 45% more than women through the 1990s, and paid for it in lower returns.
• Millennials had the online poker boom, when weekly card-playing among college-age men doubled in two years.

What's new today is the scale and ease of access to event contracts and sports betting. Robinhood made more from event contracts in Q2 than from stock trading, and Wealthsimple -- which began as a place to gradually and boringly grow your money -- has just launched its own prediction-market app here in Canada.

So, for sure, some Gen Z are betting online, but they're not alone. Bank of America Institute data shows that millennials were the biggest group of online bettors, right up until June of this year. Even in July, when Gen Z finally pulled ahead, more than half of the bank's customers betting online were older: 40% were millennials, 9% Gen X and 3% boomers.

Ultimately though, counting how many people bet only tells you so much.

The real story is in who bets the most.

Who are the degens?

When I read all of this for the first time, my instinct was that it says more about young men than it does about young people. But even that isn't fully supported by the data.

Betting skews male, but only modestly: Pew found 36% of men and 29% of women under 30 bet on sports last year. Young men are also souring on gambling faster than anyone. Among men under 30, 47% now say legal sports betting is bad for society, up from 22% in 2022.

Dig a little deeper and it's clear we're really talking about an edge group of heavy users with problem behaviour. And, yes... those people are heavily skewed male.

This is yet another example of the loud minority driving a broader narrative and being mistaken for a larger trend.

In Connecticut, a state-commissioned study found that the 1.8% of adults with gambling problems supply 51% of sports-betting revenue, and most of them are men aged 18-34. Here in Canada, after Ontario's legal market opened, gambling-related contacts to the province's ConnexOntario helpline from boys and men aged 15-24 increased to more than four times their 2012-14 rate.

Meanwhile, 83% of Gen Z adults didn't bet on sports at all last year.

Courting degens is bad strategy (and yucky)

I often advise clients to focus on appealing to smaller cohorts of people in order to win with bigger cohorts of people. That's just how today's cultural and media landscape works. There is also much to be gained by breaking larger cohorts down into smaller segments to understand how uniform they truly are.

On the surface, appealing to what reads as youth risk tolerance might feel like a good strategy for anyone who is looking to get a share of their money, deposits, etc. Young men who gamble tend to have friends who also gamble. But that's kind of where things stop.

You can only win the modern media game of follow the leader if the groups you're tapping for their influence have cultural power.

When it's a group people have moral objections to, who aren't desirable, or who aren't upwardly mobile from a cultural perspective, the strategy doesn't work. Winning with degenerate young men (some of whom are probably very wealthy) can only get you so far. See whatever dumb Sydney Sweeney thing you prefer for evidence of this.

NB: This strategy also doesn't work when a plurality of people might interpret your strategy as unethical. But that's a different post for a different day.

The reality here is that most young people are far more conservative with their money than the headlines suggest.

In U.S. Bank's 2026 Wealth Report, 76% of Gen Z still said traditional investing is the best way to reach long-term financial goals, and one of its executives admitted "it surprises me how conservative this generation is."

There are definitely some eye-opening examples of risky behaviour out there. We've found a few in our own work. But they're the exception, not the norm.

You can design things to separate vulnerable young people from their money, or you can design things to help young people make smarter decisions with their money. For what it's worth, our own research suggests there are just as many young people who are too afraid, or lacking in financial education, to take appropriate investment risks as there are degenerate gamblers at the other end of the spectrum.