Young Men Lead the Surge in U.S. Gambling and High-Risk Investments

In recent years, the landscape of gambling in the United States has undergone a significant transformation.

by Faruk Imamovic
Young Men Lead the Surge in U.S. Gambling and High-Risk Investments
© Getty Images/Ethan Miller

In recent years, the landscape of gambling in the United States has undergone a significant transformation. Americans have a multitude of options to place bets—from traditional casinos to online platforms, sports betting, and even the volatile realms of cryptocurrency and meme stocks.

In 2023 alone, Americans legally wagered a staggering $119.84 billion on sports, marking a substantial increase from $93 billion in 2022. This surge in gambling activity follows the Supreme Court's 2018 decision that overturned a federal law prohibiting sports gambling, allowing over three dozen states to legalize it in some form.

The proliferation of online gambling platforms, such as iGaming—where users can engage in blackjack, roulette, and slot machines from the comfort of their homes—has further cemented gambling's role in modern-day leisure and entertainment.

However, the rise in gambling opportunities extends beyond conventional games. Trading platforms like Robinhood have democratized access to stock markets, making investing a form of entertainment rather than merely a means to financial stability.

This blurring of lines between investing and gambling is perhaps best illustrated by the enthusiasm for high-risk day trading and investments in meme stocks, such as GameStop and AMC.

Young Men at the Forefront

The demographic most captivated by this wave of gambling and speculative investment trends are young men.

Data, including a 2023 NCAA survey and findings by Pew Research in 2022, indicate a significant prevalence of gambling and betting activities among men under 50, particularly on college campuses and within Black and Latino communities.

The appeal is not merely financial; it's also about the thrill, the chase, and, for some, the community and identity that these activities foster. Timothy Fong, a clinical professor of psychiatry at UCLA and codirector of its gambling-studies program, notes a cultural shift in the motivations and acceptance of gambling among young men.

"There's a cultural component," Fong explains. From the glorification of financial risk-taking in films like "Wall Street" to the aggressive marketing of sports betting and cryptocurrencies today, young men have been continually targeted by industries that see them as prime customers for risky financial ventures.

Risks and Rewards: A Double-Edged Sword

Kahlil Philander, a professor at Washington State University, observes that this boom is intensified by the novelty and aggressive marketing of gambling products to younger audiences who are experiencing these activities for the first time.

"The advertising dollars spent on sports-betting platforms and crypto exchanges have significantly amplified the exposure effect," Philander states. He warns that younger individuals, lacking the experience of older generations, may not be as aware of the potential downsides of gambling.

The ease of access to gambling and investment opportunities through technology further fuels this trend. Now, placing a bet or buying a stock is as simple as a few taps on a smartphone. This convenience has introduced a new dynamic into everyday life, where the lines between gambling, gaming, investing, and taking financial risks are increasingly blurred.

Warren Buffett, in his latest letter to Berkshire Hathaway investors, lamented this shift, noting that "markets now exhibit far more casino-like behavior than they did when I was young." The legendary investor's observations highlight a broader concern: the transformation of financial markets into arenas of high-stakes gambling.

Warren Buffett© Getty Images/Jamie McCarthy

The Impact of Unchecked Gambling

The dramatic rise in gambling and investment risks among young Americans has significant implications for individual and societal well-being.

While the majority of gamblers engage in these activities harmlessly and sporadically, a substantial minority develop severe gambling problems. According to the National Council on Problem Gambling, approximately 2.5 million Americans are categorized as having a severe gambling addiction, with an additional 5 to 8 million considered to have mild to moderate issues.

These statistics are alarming, particularly when juxtaposed with the enthusiastic promotion of gambling as a mainstream entertainment. The case of New Jersey, a pioneer in legalizing sports betting and online gambling, offers a glimpse into the potential future for other states.

In New Jersey, the rate of high-risk problem gambling among young men is notably high, and calls to the state's problem-gambling hotline have tripled over five years, highlighting an urgent public health issue.

The Role of Technology and Education

The digital transformation has made gambling and high-risk financial behaviors more accessible, thereby increasing the frequency and intensity of engagement.

Timothy Fong points out, "The technology that brings us that intersection between gambling, gaming, investing, and financial risk, that technology barrier is so low right now." This accessibility can be particularly enticing to the younger demographic, which has grown up in a digital world where instant gratification is the norm.

However, the very technology that enables this easy access can also be harnessed to implement protective measures. Some sports-betting apps have begun to incorporate features that encourage users to moderate their activities, such as reminders or temporary locks after extended periods of play.

These technological solutions, while a step in the right direction, are still sparse and largely voluntary within the industry. Educational initiatives are also critical in combating the potential negative effects of gambling.

By informing people about the risks associated with gambling and investing, especially in high-volatility environments like crypto and meme stocks, society can better prepare individuals to make informed decisions. Such education should start early, ideally incorporated into school curriculums, and continue through college, targeting the age groups most at risk.

United States