Sports bettors are tapping brokerage accounts to gamble: Study

Sports gambling is gaining widespread popularity, with users increasingly dipping into their brokerage accounts to sustain this habit. BYU Marriott School of Business Assistant Professor of Finance Jason Kotter joins to discuss this development.

Kotter notes that individuals are substituting stock investments with online sports betting. He estimates the average household that spends money on online bettering spends n average about $1,000 per year on sports betting, with “every dollar they place into sports betting, they’re taking out about $2 from their brokerage account,” negatively impacting their long-term savings. The impact is most pronounced among “households that are financially constrained.”

While Kotter cannot pinpoint the exact stocks or investments seeing the most outflows, he confirms that “we do see the money coming out of all types of brokerages.” He names platforms like Robinhood (HOOD) and Vanguard as examples, stating that “it looks like it’s pretty broad-based across all types of investments.”

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This post was written by Angel Smith