- Northwestern Mutual survey says these demographics are embracing prediction markets, sports betting to play financial catch-up
- Asset manager says they’re playing with fire
Gen Z and millennials are increasingly turning to high-risk, speculative asset classes and market segments in an effort to shore up their finances, potentially inviting more problems along the way.
Northwestern Mutual, which notes younger Americans are playing fire, says Gen Z and millnennials are increasingly turning to cryptocurrency, prediction markets, and sports wagering as avenues for shoring up their personal financial pictures.
Gen Z and Millennials make up the largest share of Americans who are investing in – or are considering investing in – high-risk speculative assets this year. These young adults demonstrate the strongest interest in cryptocurrencies, sports betting, and event-based contracts offered through prediction markets,” according to the asset manager.
The firm’s 2026 Planning & Progress Study notes that just 24% of Americans investing in cryptocurrency and 17% dabble in prediction markets or sports wagering, but those percentages jump to 32% across both categories among Gen Z and 35% and 24%, respectively, among millennials.
Financial Nihilism Setting In
Whether they realize it or not, Americans embracing riskier assets because they feel behind financially are engaging in a form of the gambler’s fallacy because they’re taking on more risk to make up for past events or mistakes.
“Across generations, a driving factor behind why people are taking greater risks with these investments is because they feel financially behind,” adds Northwestern Mutual.
The survey also points out that the percentage of Americans “who feel financially behind and believe high-risk/speculative investments will help reach financial goals more effectively than traditional methods” is 73% in aggregate, but it rises to 80% for Gen Z and 75% for millennials.
The Northwestern Mutual study was published at time when next-generation brokerage firms, prediction markets, and sportsbook operators are all dealing with accusations that they’re targeting young, potentially vulnerable demographics while blurring the lines between betting and investing in the process.
Betting, PMs Aren’t Great Ways to Make Money
Amid sticky inflation, stagnant wages, and onerous student loan obligations, it’s understandable that many younger Americans feel as though they’re not where they need or want to be financially. However, data confirm prediction markets and sports betting aren’t elixirs for achieving financial goals.
If anything, those outlets can exacerbate fiscal woes because data confirm only a scant percentage of sports bettors are profitable over the long run and most retail traders on prediction markets lose money. In fact, some new Kalshi users lose money more rapidly on that platform than they do when wagering on sports through traditional sportsbooks.
“When people feel behind, they often look for shortcuts,” said John Roberts, Northwestern Mutual’s chief field officer, in a statement. “These high-risk assets can be fun to play with, but that’s why we recommend only spending ‘fun money’ on them. Don’t allocate more than you can afford to lose completely and focus your planning on strategies that have been proven to help people build and protect wealth over the long-term.”
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