Published on: March 10, 2026, at 12:46 PM.
Updated on: March 10, 2026, at 12:46 PM.
- Survey by Northwestern Mutual reveals which demographics are leaning into prediction markets and sports betting for financial recovery
- Investment managers caution that they are playing a risky game
Young adults, particularly from Gen Z and millennials, are increasingly exploring high-stakes asset markets in a bid to stabilize their finances, risking potential pitfalls in the process.
According to Northwestern Mutual, younger Americans are taking on risky investments such as cryptocurrency, prediction markets, and sports betting to enhance their financial situations.
Youth demographics, especially Gen Z and millennials, represent the highest percentage of individuals investing in – or exploring investments in – speculative assets this year. They demonstrate significant interest in cryptocurrencies, sports wagering, and event-based contracts in prediction markets.
The firm’s 2026 Planning & Progress Study indicates that while only 24% of American adults are investing in cryptocurrency and 17% are engaged in prediction markets or sports betting, these figures rise to 32% and 35% among Gen Z and millennials, respectively.
The Rise of Financial Nihilism
Unbeknownst to them, individuals gravitating towards riskier investments due to feelings of financial inadequacy are engaging in a version of the gambler’s fallacy, wrongly believing that greater risk can amend prior financial missteps.
“People across various age groups are drawn to higher risks with these investments because they perceive themselves as financially behind,” Northwestern Mutual explains.
The survey highlights that 73% of Americans believe that high-risk or speculative investments can more effectively achieve their financial goals compared to traditional methods, a sentiment that escalates to 80% among Gen Z and 75% among millennials.
The study was released amidst growing concerns that emerging brokerage firms, prediction markets, and sportsbooks are intentionally targeting young and potentially impressionable groups while blurring the lines between investing and gambling.
Why Prediction Markets and Betting Aren’t Effective Financial Strategies
In a climate of persistent inflation, stagnant wages, and substantial student loan debt, it’s no surprise that younger populations feel inadequately positioned financially. Yet, evidence shows that prediction markets and sports betting are not solutions for achieving financial aspirations.
In reality, these activities can worsen financial situations, as statistics reveal that very few sports bettors achieve long-term profitability, and most retail traders on prediction markets incur losses. Alarmingly, new users on platforms like Kalshi often lose money even quicker than those betting through traditional sportsbooks.
“When individuals feel financially behind, they often seek shortcuts,” said John Roberts, Chief Field Officer at Northwestern Mutual. “These high-risk investments can seem entertaining, but we advise individuals to only use ‘fun money’ for such ventures. It is crucial not to invest more than you are willing to lose entirely and to focus on proven strategies that help in building and safeguarding wealth over the long term.”