Gen Z Drives Surge in Online Gambling and Prediction Markets

The digital gambling landscape is shifting rapidly, with a new generation taking the lead. Recent data from payment processor Velera shows a clear trend in credit union card transactions. In particular, Generation Z is fueling growth in online gambling and so-called prediction markets. This development is occurring much faster than many financial institutions and experts had projected. It is a trend that demonstrates how the lines between investment, entertainment, and risk have become blurred for young people.

Particularly striking is the concentration on platforms like Kalshi, which alone accounts for 88 percent of transactions in this sector. While older generations remain more cautious, younger users are increasingly using their debit and credit cards for event-based wagering. This momentum has steadily built throughout 2026, reaching new heights just before major sporting events like the World Cup. This is no longer just about classic casino gaming, but a new type of speculative trading.

Numbers and facts

Velera's report is based on a massive dataset of 3.8 billion transactions totaling 196 billion USD for the 12 months ending August 31. A key finding is that Generation Z accounts for nearly two-thirds of year-to-date prediction market debit transactions. Interestingly, the group of 14- to 20-year-olds, defined as younger Gen Z, shows the strongest year-over-year growth, even though they post the lowest average wager at 40.08 USD.

Additional data from a national NCPG survey proves that the risk starts early. Approximately 65 percent of U.S. adults aged 21 and older reported participating in some form of gambling before their 21st birthday. Of these, 40 percent played the lottery, while 21 percent had already gained experience with online casinos. Public concern is growing: 79 percent of Americans consider gambling addiction to be as serious as or more serious than drug or alcohol addiction.

Background

The legal classification of prediction markets remains a point of contention. Many state authorities accuse platforms like Kalshi or Polymarket of deliberately circumventing existing gaming laws, tax obligations, and advertising regulations. For financial institutions, this means increased risk. Karen Postma of Velera warns of the consequences of this development for customer security and the stability of banking systems.

"The concentration of prediction market activity among Gen Z, combined with evolving regulation and the potential for market manipulation, creates new considerations for fraud prevention, member education, and financial wellness." - Karen Postma, Senior Vice President for Risk Solutions at Velera

In parallel, studies by Fairleigh Dickinson University (FDU) show that online betting leads to problems particularly among young men. Ten percent of men between the ages of 18 and 30 show signs of problem gambling behavior. Among those who specifically bet on online slots, 81 percent report at least one problem behavior characteristic.

Why it matters for German players

In Germany, the situation is strictly regulated by the State Treaty on Gambling (GlüStV 2021), which stands in clear contrast to the often unregulated U.S. prediction markets. German players registered with providers on the official GGL whitelist enjoy high levels of protection. This includes the cross-provider deposit limit of 1,000 Euro per month, monitored via the LUGAS system. The 1 Euro per spin limit on online slots also serves to prevent excessive gambling behavior, as described in the U.S. data for young men.

The trends from the U.S. show, however, that vigilance must also increase here toward products that look like financial instruments but function like gambling. In Germany, such bets on events outside of sports are strictly regulated or often not permitted at all. Those who want to play safely should choose platforms with a .de extension and the seal of the Joint Gambling Authority of the States (GGL), as only there do the strict German player protection rules apply.

What it means for GGL-licensed casinos

For licensed casinos in Germany, the international Gen Z trend means that marketing and player protection must be even more closely linked. Since younger target groups are apparently more susceptible to the gamification of risks, identity verification (KYC) and connection to the OASIS lockout file remain essential. German operators must ensure that their offers do not entice young people into risky behavior through aggressive advertising on social media. The report highlights that prevention must start before the legal age of entry to avoid long-term harm.