Blurring the Line Between Investing and Gambling

A noteworthy trend sweeping our culture is the rapid rise of online gambling, mostly through sports betting and so-called “prediction markets,” but also through online casino gaming. Legalized a relatively short time ago, millions of people are now regular participants. With gambling becoming normalized and some brokers now integrating access to prediction markets into their platforms, the line between investing and gambling is getting blurred. What’s a Christian investor to make of it all?

How we got here

Fifty years ago, Las Vegas and Atlantic City were the main legal gambling hubs in the U.S. A 1987 Supreme Court decision sparked a tribal casino boom that added many more legal gambling halls to the American landscape. Then, in 2018, the high court made gambling available to almost anyone with a cell phone. Its ruling that year overturned a law that prevented states from legalizing sports betting.

Today, 40 states and the District of Columbia have legalized the activity, 32 of which allow online sports betting, with DraftKings and FanDuel the dominant sports betting platforms. Some 27% of all Americans now have an active sports betting account. For men ages 18-49, the figure is 52%.

Financial blogger Kyla Scanlon says the marketing pitch for sports betting sites makes it seem as though there is easy money to be had. “‘Anyone can do this, especially you, just open up the app and put your money in. Your casual sports knowledge is valuable, young man! It’s normal. Sports are about gambling now.’ The result was complete cultural transformation in less than a decade.”

In addition to sports betting, eight states have legalized online casino gaming. 

More recently, prediction markets platforms Kalshi (an Arabic phrase that means “everything”) and Polymarket have carved out an adjacent space. They allow people to bet on the outcome of, well, pretty much everything, from elections to the weather, and from how many social media posts a celebrity will make to the price of oil.

They, too, promote themselves as offering easy money. In one now-removed Kalshi ad that ran on TikTok, a young woman says, “I was about to be unable to pay my rent, but I got two years of rent through Kalshi’s predictions. It’s amazing!”

While prediction markets trace their history back to 1988, they took off after a 2024 federal court ruled that Kalshi’s activities do not constitute “gaming” but rather the trading of “event contracts.” That made it legal to use the platform in all 50 states. Since then, the growth of prediction markets has exploded. According to analytics firm The Block, combined trading volume on the two leading platforms topped $24 billion in April of this year, up some 1,100% from less than $2 billion in April of 2025.

A new normal

With the rapid growth of online gambling has come its rapid normalization. Watch a sporting event today and you’ll likely see betting odds on prominent display, while hearing the announcers discussing point spreads. Gambling has become thoroughly integrated into the sports viewing experience. Some news organizations regularly report what the prediction markets say about the likely outcome of unfolding events.

Several brokers, including Robinhood and Interactive Brokers, now offer access to the prediction markets on their platforms, blurring the line between investing and gambling. In December 2025, the Wall Street Journal reported that Schwab would not enter that space. Schwab CEO Rick Wurster told the publication it was committed to continuing to serve long-term investors. “There’s a really bright line between investing and gambling,” Wurster said then. “I really worry about the message that’s being sent to young investors that you’ve got to get these quick hits.” However, Wurster left the door open. “If we find out [prediction markets] becomes a competitive necessity in the brokerage space…it’s something clearly we’re going to have to consider.”

Just four months later, with prediction markets trading volume skyrocketing, Wurster said Schwab was now “taking a hard look” at offering customers access after all. It’s reminiscent of Vanguard’s initial reluctance to offer cryptocurrencies on its platform. In January 2024, when the first Bitcoin ETFs began trading, Vanguard refused to offer them. In a statement, it explained, “These products are not aligned with our longstanding focus on offering core building blocks for long-term investment portfolios…. Unlike equities and bonds, they generally lack intrinsic economic value and do not generate cash flows like dividends and interest payments.” Less than a year later, with Bitcoin ETFs quickly drawing $120 billion in assets, Vanguard reversed course.

Last fall, the parent company of the New York Stock Exchange announced a $1.6 billion investment in Polymarket to provide customers with “sentiment indicators on topics of market relevance.” At the time, Polymarket founder Shayne Coplan, said, “Together, we’re expanding how individuals and institutions use probabilities to understand and price the future. Several companies are now seeking SEC approval to offer prediction markets ETFs.

What will the further normalization of online gambling and prediction markets betting look like? The trend is clearly moving toward more states legalizing sports betting and online casino gaming and more investment platforms offering access to prediction markets. 

Winners and losers

Many states legalized sports betting during the COVID-19 pandemic as a way to generate much-needed revenue without raising taxes. Using that yardstick to measure, it appears to have been a great success, with billions of dollars in new tax revenue generated.  

However, Jonathan Cohen, author of Losing Big: America’s Reckless Bet on Sports Gambling, points out a significant downside. “Working papers show a correlation between a state’s adoption of online sports betting and an increase in bankruptcies, auto loan delinquencies, and the use of debt consolidation loans; a reduction in savings and investment in low-income households; and an increase in cases of child maltreatment.”

Concerns are being raised about the addictive nature of gambling as well. According to the National Council on Problem Gambling, “The rate of gambling problems among sports bettors is at least twice as high as among gamblers in general. When sports gambling is conducted online, the rate of problems is even higher, with one study of online sports gamblers indicating that 16% met clinical criteria for gambling disorder and another 13% showed some signs of gambling problems.”

And it seems that not a week goes by without a report of some type of illegal activity associated with sports betting or prediction markets—from college and professional athletes betting on or manipulating games for the benefit of other betters to a U.S. soldier arrested for betting on the outcome of a military operation about which he had insider information and that he participated in.

What’s a Christian investor to do?

In one sense, the rapid rise of online sports betting and prediction markets seems new. However, in another sense, these are just new manifestations of a very old challenge: where to draw the line between investing and gambling. Day traders have been around for as long as the technology has existed to facilitate the rapid buying and selling of stocks.

Even some who generally advocate a long-term approach to investing support the idea of maintaining a small “mad money” account where investors can scratch an itch to pursue riskier investments. However, even there, the line between speculation (i.e., a higher risk form of investing) and outright gambling (an outright game of chance) seems fairly stark.

Ultimately, the decision to participate in sports betting or prediction markets is one each individual believer must make through prayer, reflection on biblical teaching, and the leadings of the Holy Spirit. Several verses to consider include:

1 Corinthians 10:23. “‘I have the right to do anything,’ you say—but not everything is beneficial. ‘I have the right to do anything’—but not everything is constructive.’” 

Proverbs 21:5, TLB. “Steady plodding brings prosperity; hasty speculation brings poverty.”

1 Timothy 6:10. “For the love of money is a root of all kinds of evil. Some people, eager for money, have wandered from the faith and pierced themselves with many griefs.”

One thing is certain: The bell has rung, with legalized gambling and prediction markets off to the races.