As fans rush to fill out March Madness brackets, Americans are expected to wager billions of dollars on the NCAA Tournament this year. But experts warn the surge in sports betting is coming at a real financial cost, and in some cases, it’s blurring the line between gambling and investing.
Research links the rise of legalized sports betting to higher credit card debt, shrinking household savings and lower credit scores. In states with widespread online gambling, bankruptcy rates have also increased, one paper found.
As betting apps have exploded, investing apps have also become easier to use. According to James Martielli, head of investment product for Vanguard’s Personal Investor Division, many platforms now use design techniques borrowed directly from the gambling industry.
“The broader term is, like, gamification,” Martielli said in the latest episode of the In Your Corner podcast. “So as an example, when you see the stock price of something change, it usually blinks and … sometimes, if you press buy or sell, you’ll have some confetti come down to celebrate.”
Those features, Martielli warned, are not accidental. Alerts, flashing colors and celebratory animations are designed to encourage frequent trading and short‑term speculation rather than long‑term investing.
In some cases, the overlap goes even further. Martielli said certain brokerage platforms now allow users to place sports bets without ever leaving their investment app.
“There’s some brokerages where if you wanted to pick who’s going to win the NCAA Tournament, you don’t have to leave your brokerage app,” he said. “You can actually place that bet through what’s called an event contract, right within your investment app.”
That convergence raises red flags, he said, especially when retirement savings, education funds and entertainment bets live side by side.
The takeaway for consumers: Set clear boundaries.
Gambling may be entertainment for some, Martielli said, but it should never be confused with investing.
“Once it starts bleeding into your retirement savings, your education savings, your down payment for a house, that’s when it gets problematic,” he said.
You can watch the full interview and get more guidance on the In Your Corner podcast. The In Your Corner podcast is dedicated to providing practical solutions to everyday problems.
Each week will feature a different guest expert. You can find new episodes posted every Wednesday on the CBS Philadelphia YouTube channel.
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