As online sports betting surges in popularity and visibility, a growing number of Gen Zers are treating what was once a casual pastime as an investment strategy. The returns, however, tell a different story.

Research from the Bank of America Institute found that one in five Americans view sports betting as an investment. Among Gen Z, that figure doubles to two in five.

A recent Betterment survey of 1,000 U.S. retail investors dug deeper into the trend. It found that 52% of Gen Z investors redirected money intended for investing into sports betting over the past year, and 14% said they do so multiple times a month. Meanwhile, 26% of Gen Z investors said they treat sports betting as a deliberate component of their long-term financial strategy.

The problem is that online sports betting remains, for the most part, a losing proposition. Sportsbooks build a fee into every wager—known as the vig—which makes it difficult for even a well-placed series of bets to turn a profit. BofA, which tracked payments flowing to and from betting platforms, found that customers across every generation recovered less than 75 cents for every dollar they sent in each month this year. Gen Z fared best of all cohorts, with most getting back more than 80 cents per dollar—but that is still well short of breaking even.

Digital platforms have also made it easier to bet frequently. Survey data cited by BofA found that nearly a quarter of sports bettors wager daily, while another third bet weekly.

"The confluence and surging popularity of AI legal betting apps and prediction markets have really led lots of Gen Z guys to believe that they can beat the system," Zach Hirsch, a Gen Z podcaster and sports handicapper, told Fortune.

Younger adults dominate the online betting scene. In July, as the World Cup fueled a spike in betting activity, Gen Z and millennials accounted for 88% of all online betting activity, according to BofA. Gen Z alone represented 48%, overtaking millennials as the largest generational share of bettors for the first time. Since BofA tracks payments to and from betting platforms each month, its data offers a recurring read on whether Gen Z's newly claimed lead among bettors holds and how activity shifts around major sporting events.

The habit can weigh on long-term financial well-being. BofA found that median deposit balances for betting households in 2026 were just 59% of those of non-betting households. A separate Federal Reserve Bank of New York study that credit card delinquencies among sports bettors under 40 jumped 26% after legalization.

So is this Gen Z angst? Are young people choosing gambling over financial hope? The Urban Institute set out to answer that question with a nationally representative survey of more than 3,000 adults, comparing the financial attitudes and behaviors of Gen Z adults (ages 18 to 29) with those of older Americans.

"Rather than being either purely nihilistic or completely savvy, today's young adults are navigating what we see as a complex financial landscape with caution, creativity, and ambition," Thea Garon, director of the Financial Well-Being Hub at the Urban Institute, told Fortune. "They're embracing really a mix of both traditional and non-traditional financial strategies to build wealth and financial security during challenging economic times."

Nearly half of Gen Z respondents (45%) said they are more focused on meeting today's needs than on saving for the future. Many also feel the deck is stacked against them: 65% say their generation faces tougher economic circumstances than previous generations, and 52% say their generation must take more risks to reach its financial goals.

The fine line between investing and gambling

As for what counts as risky financial behavior, Natasha Schüll, an associate professor of media, culture, and communication at NYU, notes that investing and gambling have not always been seen as drastically different. She said investing apps are becoming more game-like, stock trading platforms are adding prediction markets, and the language used to describe investing and gambling is converging.

"I don't think it's that Gen Z doesn't understand the difference between investing and gambling. I don't think Gen Zers sort of have this corrupted attitude," Schüll told Fortune. "I feel like contemporary financial and betting platforms kind of make the boundary between the two more porous."

As a result, some Gen Zers see sports betting as just another part of their portfolio, alongside stocks or crypto. Hirsch acknowledges that the line between gambling and investing can seem blurry, but he said he bets rarely, and only after doing in-depth research.

"I personally approach sports opportunities as I approach any other market," Hirsch said.

Garon notes that most people who bet on sports do so infrequently and with small amounts of money. The share of all young adults who bet is also smaller than the investor-focused Betterment numbers might suggest: the Urban Institute found that 17% of Gen Z adults had bet on sports in the past year. Still, 15% of Gen Z sports bettors told the Urban Institute they've saved less money than they would have if they weren't betting.

The Urban Institute also found that Gen Z is surprisingly optimistic about its financial future. Some 56% of Gen Z respondents believe their personal finances will improve in the next year, and 42% believe they'll end up better off financially than their parents.

"This just tends to fly in the face of the narrative you hear that young people expect the future to be all doom and gloom," Garon said. "I think it speaks to the fact that young people have optimism, particularly about their personal financial futures, despite the current economic challenges."

This story was originally featured on Fortune.com.