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Online gambling and prediction markets are becoming a growing financial concern for banks and credit unions. As betting platforms become easier to access through smartphones and debit cards, research suggests that frequent gambling may contribute to lower savings, rising debt and financial stress, particularly among younger consumers.
The trend also extends beyond traditional sports wagering. Digital games that use virtual currency, paid upgrades and chance-based rewards may introduce children and teenagers to behaviors that later appear on sports betting and prediction market platforms.
Why it matters: Financial institutions often promote broad financial literacy, but the rise of mobile betting may require more targeted education. Customers and members may need practical guidance on protecting savings, recognizing risky behavior and choosing sustainable ways to build wealth.
“You see a perfect storm coming together, from a societal standpoint,” said Mark Meyer, CEO of the Filene Research Institute. He warned that consumers may begin viewing games of chance, online sports betting and prediction markets as more attractive paths to wealth than regular saving.
Key Findings on Gambling and Personal Finances
- Approximately one in 10 Gen Z credit union members shows evidence of gambling activity.
- Heavier gambling is associated with significantly lower deposit balances.
- More than half of surveyed sports bettors say they have wagered in an effort to pay bills.
- Some consumers are using personal loans, payday loans and other forms of borrowed money to fund bets.
- Sports leagues are increasingly supporting prediction market platforms through data partnerships and real-time information.
Meyer described easy access to gambling as a “leaky hole” for credit union deposits. While betting represents only a portion of overall consumer spending, its rapid growth could affect individual financial health, household stability and long-term deposit growth.
Sports Betting Is Becoming a Debt Issue
A recent U.S. News survey of sports bettors challenges the idea that wagering is primarily a form of entertainment. The findings show that many participants are using betting as a potential source of income, even when their financial circumstances are already strained.
- Fifty-one percent of respondents said they had placed sports bets to help pay bills.
- One in five had bet in an attempt to cover rent or a mortgage payment.
- Fifty-seven percent placed bets at least weekly, while 17% bet daily.
- Forty-five percent had borrowed money to place sports bets.
- Thirteen percent had taken out a personal loan for betting, and 11% had used a high-interest payday loan.
- Nineteen percent reported having outstanding sports betting debt.
- Twenty-two percent were concerned that they could not control their betting behavior.
- Forty-one percent of sports bettors also participated in prediction markets.
Separate research from Spinwheel found that 7% of surveyed consumers had borrowed money to participate in prediction markets. The same percentage had borrowed funds for sports betting or other forms of gambling.
Although some bettors believe wagering improves their financial position, the broader data points to significant risks. Betting losses can reduce the money available for emergency savings, retirement contributions, debt repayment and other long-term financial goals.
Younger Credit Union Members Face Greater Exposure
Research from the Filene Research Institute and Vertice AI analyzed anonymized checking account data from approximately 910,000 members at 31 credit unions in states where gambling is permitted. The analysis reviewed about 3 million records identified through gambling-related keywords and merchant codes.
Gambling activity appeared in more than 9% of the overall sample. Younger members were more likely to show gambling transactions than older generations:
- Generation Z: 10%
- Millennials: 8.5%
- Generation X: 5.8%
- Baby boomers: 2.4%
- Silent generation: 0.5%
Millennials represented 36.3% of all identified gamblers, while Gen Z accounted for 30.3%. Together, the two generations represented 44% of total credit union members in the study but 66% of members with gambling activity.
“Younger members are the ones moving money to online gambling and prediction markets, and they are doing it at significant scale,” wrote Filene representatives Stephen Arnold and Cole Ritchey in the organization’s research commentary.
The study also found a relationship between gambling frequency and deposit levels. The most active bettors held approximately half the median balance of casual bettors. The difference was most visible in savings, money market and certificate of deposit accounts rather than checking accounts.
Only about 4% of the members studied accounted for half of the total funds wagered. Researchers said this concentrated activity deserves close monitoring because the affected group could grow as betting platforms become more common.
Debit Card Betting Continues to Rise
Velera, a payments organization serving credit unions, reviewed billions of transactions processed for more than 4,000 financial institutions. Its report found that gambling-related debit card activity increased sharply through August.
- The number of gambling-related transactions rose 21.8%.
- The dollar value of those transactions increased 25.4%.
Although gambling remains a small part of total card activity, its growth rate is well above broader consumer spending trends. The increase has been particularly pronounced among younger customers.
Sports seasons influence betting patterns, with football serving as one of the biggest drivers. The American Gaming Association has projected that Americans could wager $29.5 billion on professional football through physical and online sportsbooks by the next Super Bowl.
Gen Z consumers recorded an average online sports bet of $40.08 in Velera’s analysis. Younger consumers also represented nearly two-thirds of the prediction market activity tracked in the report, with an average transaction of $42.82.
Prediction market companies often describe their platforms as investment services rather than gambling products. However, the consumer behavior can resemble wagering, especially when users make frequent short-term bets based on sports, politics or other events.
Digital Games May Introduce Gambling Behaviors Early
The concern may begin before young people are legally old enough to place sports bets. A Common Sense Media study found that more than one-third of surveyed boys had participated in some form of gambling before reaching voting age.
The report, titled “Betting on Boys: Understanding Gambling Among Adolescent Boys,” found that exposure often occurs through online games featuring paid rewards, virtual currencies and chance-based purchases.
- More than half of boys ages 11 to 17 had spent real money on quasi-gambling features in online games.
- Among those who acknowledged gambling, 64% had done so within an online gaming environment.
- Thirty-four percent had participated in traditional gambling.
- Another 34% had taken part in sports gambling.
- Twenty-three percent used a parent’s or another adult’s card with permission.
- Eight percent used another person’s card without permission.
These findings raise concerns for financial institutions, parents and regulators because early exposure to gambling mechanics may normalize betting before young consumers understand the financial consequences.
How Banks and Credit Unions Can Respond
1. Identify members who may need support
Financial institutions can analyze transaction trends to identify customers who may be experiencing gambling-related stress. Filene research suggests that many financially strained bettors may be receptive to assistance, provided the outreach is supportive rather than judgmental.
2. Connect banking products with long-term goals
Prediction platforms frequently present themselves as wealth-building tools. Banks and credit unions can counter that message by explaining the difference between speculation, gambling and long-term investing. Savings accounts, certificates of deposit and diversified investment plans can be positioned as more reliable tools for reaching financial goals.
3. Reach younger consumers through relevant channels
Sports betting companies and influencers actively promote wagering through social media and digital content. Financial institutions should consider using the same channels to provide clear, practical information about betting risks, debt and emergency savings.
4. Offer positive alternatives to gambling rewards
Prize-linked savings programs may provide an alternative for consumers attracted to the excitement of potential rewards. In states where these programs are permitted, members can receive chances to win prizes while continuing to build savings.
These programs reflect an older concept with renewed relevance: combining the motivation of rewards with the financial benefits of saving.
A Growing Issue for Financial Institutions
Gambling has long been part of American life, from lotteries and card games to office pools and horse racing. The difference today is that betting opportunities are available around the clock through a smartphone.
As online gambling and prediction markets move further into the mainstream, banks and credit unions may need to treat the issue as part of their financial wellness, risk management and deposit strategy. Monitoring transaction patterns, offering targeted education and promoting constructive savings products could help institutions respond before gambling-related financial stress becomes more widespread.
Source: TheFinancialBrand.com