"Americans Spend More Money Betting On Sports Than Investing In Stocks"

[ChiBitCTy]

This popped up on one of my news feeds or somewhere on social media earlier today and was a bit taken back, to say the least.  As someone who works in finance, I'm all too aware of the lack of proper money management as well as a lack of proper investing.  I would say of my clients, your average American citizen, 90% of them are completely clueless when it comes to the most basics of proper finance.  It's pretty crazy how little people are willing to invest (both time and money ) in to their future.

As an advisor, and this topic has come up here before but this new study made me want to revisit it a little, I HIGHLY recommend not gambling if you're struggling financially.  It's one of the absolute worst things you can do.  It's also NOT a good alternative to the stock market, nor is "investing" in bitcoin (don't take my word for it, moderator, cypher punk, former bitcoin dev and one of the leading names in cryptocurrency Greg Maxwell agrees, as he had a sizable write up in a thread I made here 2-3 years ago discussing this very topic..so if you won't take it from me, maybe take it from a guy who knows more about cryptocurrency than most all of us.  I LOVE bitcoin and I love gambling, but be responsible.

Regardless here's the link to the article- https://secretnyc.co/americans-spend-more-money-on-sports-bets-than-stocks/

Here's the link to the paper/write up " Gambling Away Stability: Sports Betting's Impact on Vulnerable Households" - https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4881086

[Solosanz]

Probably Americans are people who adopt "You Only Live Once" mindset? so they don't care with crisis or something happen in the future, as long as today they're happy, they don't care with tomorrow, since tomorrow is tomorrow, it's still not happen yet.

I HIGHLY recommend not gambling if you're struggling financially.  It's one of the absolute worst things you can do.  It's also NOT a good alternative to the stock market, nor is "investing" in bitcoin

That's correct.

I don't understand with people who're scared when their investment down for 10%-20%, as long as you believe with the assets you bought, it just a small correction, sooner or later the price will back and pump. I think that people become scared because they invest more than what they can afford to lose, they forget with money management.

Same to gambling, it's just an entertainment, not a primary needs.

[Poker Player]

Here's the link to the paper/write up " Gambling Away Stability: Sports Betting's Impact on Vulnerable Households" - https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4881086

Here is the question.

If I had posted the thread I would have added a “vulnerable” or “low-income” to the title, leaving “Vulnerable (or Low-Income) Americans Spend More Money Betting On Sports Than Investing In Stocks” )

It is well known that more lottery is sold and there is more betting house in poor postcodes than in rich ones. In addition, the rich have way more capital income than the poor. So this is just an addition to what we already know.

[OgNasty]

I get that most people are clueless when it comes to finance. I think a majority of them blindly throw money at company 401k plans though. I seriously doubt that average people are gambling away more money than they’re investing. Maybe if you look at betting volume and not money to seed bankrolls. Even then, this is hard for me to believe.

[Yucky]

Here's the link to the paper/write up " Gambling Away Stability: Sports Betting's Impact on Vulnerable Households" - https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4881086

Here is the question.

If I had posted the thread I would have added a “vulnerable” or “low-income” to the title, leaving “Vulnerable (or Low-Income) Americans Spend More Money Betting On Sports Than Investing In Stocks” )

but it's not just the poor and vaulnaurable ones that gamble much. The rich and well to do also gamble and most often, they are the ones that gamble with a greater amount relative to the low class people.

Gambling is not just an American concept but a global one. The ratio of people that are investing in stock or even crypto to those gambling should be around 10:1. A lot of people just want to put Thier money into something they can quickly see the returns which is the reason why gambling discussion takes and attract far more attention compared to any investment discussion.

[sunsilk]

IMHO, for every nation and race, there are the majority of people who have no idea about investing. All they take is to live by the day and that's it, they don't prepare for the future and so investing is out of their list.

Whilst I see some crazy argument that when they think of gambling investing is really out of this world. It's funny as it is but there were people that have that justification that they conclude that it's just the same which is crazy.

The importance of investing should be taught at a young age so that when these kids grow up, they have an idea that it's a way for them to have a better life in the future. Although not all investments are flourishing and becoming successful but at least, they get the idea.

[Julien_Olynpic]

Personally, I am not sure that 90% of Americans are ignorant about finances or risk management. In my opinion, this figure is greatly inflated. Perhaps a significant portion of the population has some frivolity in terms of managing their finances, but it is unlikely to reach such high numbers.
Also, I think that many Americans have their own reasons for allowing some risks into their lives. After all, in order to manage risks responsibly, we must be able to do it, and this skill only comes with experience. Experience itself also needs to be gained from somewhere. Where can a person gain experience in risk management if he has no cases in his life of negative consequences of frivolous behavior? This is a philosophical question and it does not imply easy solutions.

[Natalim]

That seems true. People generally seek fun, and investing in stocks can be boring, especially if you don’t invest a decent amount of money. The appeal of sports betting or gambling is that with a small amount, you can potentially turn it into something significant. It's no wonder the sports betting industry is a billion-dollar market because people love to have fun, even though most end up losing money.

Additionally, since the majority of people aren't really investors, they focus on securing their income through their jobs. It’s not surprising that many don't invest in stocks, as small earners often lack the patience for investments like stocks, where returns aren't that much.

[Charles-Tim]

I have not invested on any stock before but I have gambled thousands of times. Although, my reason of not investing in stock is because I prefer bitcoin. But investing in stock has not even come my mind before. I guess most people are just like me. I think people are more exposed to gambling than stocks. But because I am gambling, that does not means I am wasting money on gambling and that does not also mean that I do not have a good business plan.

[Kelward]

I think that the increasing number of people that are engaging in gambling is not limited to Americans, more people are seeing gambling as a get rich quick scheme. Fancy sports bet shops are everywhere in my country and more people are looking for shortcuts to riches without considering that the percentage of losers is far greater than the winners. I don't think that there's anything wrong with the increasing number of people that are coming into gambling, the only problem is if they don't know how to gamble responsibly.

With proper financial education a gambler will make budget for his income and allocate a small percentage, being the amount that he can afford to loose for gambling. This is because gambling doesn't guarantee wins or profit so practicing responsible gambling wouldn't stop you from investments.

[Fiatless]

Here is the question.

If I had posted the thread I would have added a “vulnerable” or “low-income” to the title, leaving “Vulnerable (or Low-Income) Americans Spend More Money Betting On Sports Than Investing In Stocks” )

but it's not just the poor and vaulnaurable ones that gamble much. The rich and well to do also gamble and most often, they are the ones that gamble with a greater amount relative to the low class people.

The research OP referenced clearly stated that poor households are more prone to using money from stocks for gambling. Although the percentage was not discusse this is likely the case since this set of people might see gambling as a source of income.

I get that most people are clueless when it comes to finance. I think a majority of them blindly throw money at company 401k plans though. I seriously doubt that average people are gambling away more money than they’re investing. Maybe if you look at betting volume and not money to seed bankrolls. Even then, this is hard for me to believe.

The research was carried out by scholars from Northwestern University, University of Kansas, Brigham Young University and University of Kansas. However, I know that the study will have some errors and limitations.

It is quite alarming to see people substitute investment with gambling. Gambling should never be seen as an investment or a stable source of income. Just as we spend money on entertainment like movies, computer games, etc, gambling funds should be an insignificant part of our income.

[danherbias07]

I agree with this and I don't think it's just Americans.
Many people who are struggling financially are looking at gambling as their solution to try and double their salary or their budget which I think will be the worst thing that we will do with our money.
We can gamble but let it be for entertainment, especially in sports. Put $5-10 in one game per week and maybe that's it if the budget is too tight.
When it comes to investing, here is the other issue in third-world countries, they don't know how and they don't know where to invest their money. While in gambling it's as easy as depositing and then playing without any hassle.
Sometimes we are always looking for the easy way which of course could also be easily taken from us in a faster way.

[Don Pedro Dinero]

I agree with this and I don't think it's just Americans.
Many people who are struggling financially are looking at gambling as their solution to try and double their salary or their budget which I think will be the worst thing that we will do with our money.

The only thing that makes sense to me in that case is to play the lottery if you are in a bad financial situation. The odds are against you too, but if you win it's not just a doubling of your salary, it can change your life. And although it is not the biggest prize, in Spain, for example, the Christmas lottery is played quite a lot, with a maximum prize of 400,000€ (approximately $434,000) and there are other smaller prizes that when people win them they can use to get out of debt or buy a house, amounts that are not enough to drive you crazy but that mark a before and after.

In any case, for me, gambling from time to time or playing the lottery should be a complement to having a wealth building plan that you are executing, never the only option to try to improve your financial situation, otherwise you have all the chances for the opposite.

[FortuneFollower]

I agree with this and I don't think it's just Americans.
Many people who are struggling financially are looking at gambling as their solution to try and double their salary or their budget which I think will be the worst thing that we will do with our money.

The only thing that makes sense to me in that case is to play the lottery if you are in a bad financial situation. The odds are against you too, but if you win it's not just a doubling of your salary, it can change your life. And although it is not the biggest prize, in Spain, for example, the Christmas lottery is played quite a lot, with a maximum prize of 400,000€ (approximately $434,000) and there are other smaller prizes that when people win them they can use to get out of debt or buy a house, amounts that are not enough to drive you crazy but that mark a before and after.

In any case, for me, gambling from time to time or playing the lottery should be a complement to having a wealth building plan that you are executing, never the only option to try to improve your financial situation, otherwise you have all the chances for the opposite.

Totally right. Gambling should be a hobby and stay that way, not a life-changer of sorts, because the odds won't favor you.

[Yaunfitda]

I agree with this and I don't think it's just Americans.
Many people who are struggling financially are looking at gambling as their solution to try and double their salary or their budget which I think will be the worst thing that we will do with our money.
We can gamble but let it be for entertainment, especially in sports. Put $5-10 in one game per week and maybe that's it if the budget is too tight.
When it comes to investing, here is the other issue in third-world countries, they don't know how and they don't know where to invest their money. While in gambling it's as easy as depositing and then playing without any hassle.
Sometimes we are always looking for the easy way which of course could also be easily taken from us in a faster way.

This is also what I thought, it's not just the Americans are vulnerable to gambling, or betting on sports bet rather than putting their hard earn money on stocks. And now with the proliferation of online gambling, for sure there are a lot of countries as well are really prone to gamble and bet and lose money and not think about their future. It is the sad reality of gambling and that's why everyone here should be wise enough not to gamble all their savings. Specially in third world countries, there are individual who are willing to put everything in the line just to gamble and hope that one day everything will change and they will win big money. But unfortunately, it's not the case for many of us. As we here horror stories of people who have been addicted to gambling and all we can wish is that we won't be the next one.

[lovesmayfamilis]

My relatives desperately dreamed of moving to America, and they succeeded, winning a green card. But what do they have now—a twelve-hour (if you take into account the road) work day, a six-week work week, and several holidays that are paid for with some bonuses. Yes, they know about gambling since the casino shines with bright advertising, but if we talk about investments, then the conversation is short; they simply do not have enough knowledge due to lack of time or finances because all kinds of insurance and tuition for children take half of their earnings. Maybe these people could afford to go to a casino for a change, but I doubt that they will be able to become addicted to gambling, having a very tough rhythm of life. Perhaps Americans, who are native residents, not burdened with various problems, can afford to gamble, and although America is considered a country of prosperity, according to relatives, it teaches people to save.

[Zoomic]

This popped up on one of my news feeds or somewhere on social media earlier today and was a bit taken back, to say the least.  As someone who works in finance, I'm all too aware of the lack of proper money management as well as a lack of proper investing.  I would say of my clients, your average American citizen, 90% of them are completely clueless when it comes to the most basics of proper finance.  It's pretty crazy how little people are willing to invest (both time and money ) in to their future.

As an advisor, and this topic has come up here before but this new study made me want to revisit it a little, I HIGHLY recommend not gambling if you're struggling financially.  It's one of the absolute worst things you can do.  It's also NOT a good alternative to the stock market, nor is "investing" in bitcoin (don't take my word for it, moderator, cypher punk, former bitcoin dev and one of the leading names in cryptocurrency Greg Maxwell agrees, as he had a sizable write up in a thread I made here 2-3 years ago discussing this very topic..so if you won't take it from me, maybe take it from a guy who knows more about cryptocurrency than most all of us.  I LOVE bitcoin and I love gambling, but be responsible.

Regardless here's the link to the article- https://secretnyc.co/americans-spend-more-money-on-sports-bets-than-stocks/

Here's the link to the paper/write up " Gambling Away Stability: Sports Betting's Impact on Vulnerable Households" - https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4881086

I am not concerned about those financially stable Americans who choose to gamble. As long as money isn't much a problem to them, I have no problem with what they choose to do with their money. The problem here is with those low income earners, those who are still struggling with their finances, not setting their priorities right. This is not just about Americans, but every adult who is still struggling with his finances. I do not know what gives them that believe and hope that investing so much time, money and energy will give them that financial stability they so much crave for, instead of investing in something else that guarantees a more stable return.

To every gambler out there, it is neccessarily that they set their priorities right. Income from gambling should not be what anyone should rely on. Relying on gambling as a source of survival can actually limit what that particular gambler can actually achieve if he fails to give other investment options a chance.

[swogerino]

Honestly it is not only Americans who do that, I would say a great majority of the world spends more in sport betting or in gambling in general rather than buying stocks, I am not saying that is the correct thing to do but I agree with the majority. I agree as most people have a desire to get rich quick, nothing we can do about it, this is deep down in our DNA so it is very difficult to change this and as such most people prefer that over stocks because in stocks you need to educate yourself have some prior knowledge and do some research first, much different than playing a slot machine where you just have to hit the spin button or to place a three games parlay in sports during weekends.

[stompix]

There is an interesting paragraph there, seems like crypto is affected too:

In contrast with the sizable effects on equity investments, we find that increases in sports betting do not coincide with decreases in participation in lotteries or other online gambling outlets like poker sites. Cryptocurrency exchanges see a small decline in deposits, but of a much smaller magnitude than either the sports bets themselves or the declines in equity investments.

Although the dollar decrease in crypto investments is much smaller than the dollar decrease in equity investments we show in Table 7, the effect on low
savings households is a 59% decrease in crypto investments relative to the mean

Anyhow, the numbers are a bit biased since they show only direct investments, so no buys through investment plans, no 401k, not everything else, just raw stock purchases compared to the entire amount bet, including funds won and then re-gambled!
The whole gambling industry is 60 billions, even the last in the top 100 companies is one and a half that.

[jcojci]

When you want to fix your financial, it is better you don't gambling because that can effect your financial. You must have a plan how you will use your money and not use that for gambling. That will avoids you getting lose from gambling and you can save your money for other things. Playing gambling because you want to wins the money will not be recommended because you will difficult to win from the games but you will have a chance to lose your money. So you needs to think twice when you want to use your money to playing gambling. If you cares with your money, you must not waste that money in gambling.