BofA: Bettors Taking Out 75 Cents for Each $1 They Put In

Fresh research from Bank of America confirms just how hard it is to break even while betting on sports, let alone relying on that activity for income. Sports betting and prediction markets are tough ways to make a living, according to Bank of America. (Image: Getty) Acknowledging that it can only see the money its customers deposit to and pull from online sports betting platforms, meaning winnings that aren’t withdrawn aren’t included in the data, Bank of America points out the results aren’t encouraging for bettors. “Our analysis found the online betting cash recovery ratio has remained below 1, with total inflows less than three-quarters of total outflows on average for the duration of the series,” notes Taylor Bowey of the Bank of America Institute. “In other words, customers typically recover less than 75 cents for every dollar transferred to online betting platforms.” The bank measured inflow/outflow data from January through July, a period in which bettors only pulled north of 75 cents for each $1 deposited on two monthly occasions. That’s a concerning trend when considering millennials and Gen Z accounted for 88% of internet wagering activity in July. The bank’s analysis focused on sports betting and prediction markets, not transactions conducted by customers on other internet betting platforms or at land-based casinos. Income? Don’t Bet On It. The estimates vary, but it’s widely noted that just 3% to 5% of sports bettors are profitable over the long-term, implying a smaller percentage can rely on that activity or prediction market sports trading for supplemental, let alone full-time income. Those long odds aren’t preventing younger bettors from tempting fate with other surveys confirming bettors in younger age cohorts increasingly view wagering and prediction market trading as central to their long-term financial plans. Yet even Gen Z, which has the highest recovery ratio of the four generations highlighted by Bank of America, is struggling to break even. Gen Z beats other groups in betting recovery ratio, but that’s not saying much. (Image: Bank of America Institute) “Although Gen Z participants had the highest online betting cash recovery ratio across income groups, they still fell well short of breaking even,” observes Bowey. “Despite seemingly recovering more than older generations, total inflows remained substantially below total outflows, suggesting that online betting is not a reliable or constant source of income.” With Age Comes Wisdom Amid the rise of prediction markets and increased accessibility of regulated sports betting, more asset managers say the lines between betting and standard investing are blurring and that’s not a good thing. As Bank of America notes, much of the blurriness is seen among young bettors. “According to a Bank of America proprietary survey, 20% of respondents consider sports betting as a type of investment, although more consider it not a form of investing,” says Bowey. “Gen Z is twice as likely to consider sports betting as a form of investing; however, across all generations, buying event contracts on prediction markets was more likely to be considered an investment than sports betting.” Conversely, the significant majorities of Baby Boomers and Gen X don’t view sports betting as investing and while their attitudes toward prediction markets are softer, roughly a third of those two demographics don’t consider event contracts to be investing, either. The post BofA: Bettors Taking Out 75 Cents for Each $1 They Put In appeared first on Casino.org.