Rekt: How Young Adults Are Getting Blindsided by Gamified Finance
In recent years, trading apps like Robinhood have transformed investing for younger generations. With zero‑commission trades, instant account setups, and polished interfaces, they lower barriers like never before. But when ease of access meets gamified design, the results can be unsettling, especially for first-time investors.
The research behind trading and gamification
A rigorous study by Barber, Huang, Odean & Schwarz unpacks how Robinhood’s interface—scratch‑off rewards, streamlined “Top Mover” lists, and flashy visuals—encouraged users to trade more frequently. The result? What feels like a fun experience can become a high‑risk environment where emotional decisions reign. The data is sobering: the top stocks purchased by Robinhood users “each day experiences negative average returns of approximately 5% over the next month. More extreme herding events are followed by negative average returns of almost 20%.”[1]
From betting to budgeting: A stark contrast
In a previous blog, I expand on this by examining gamified finance broadly. I note that Americans wagered nearly $150 billion on sports betting in 2024.
Even more alarming, one in four bettors skipped a bill payment because of their betting, and 30% attributed their existing debt to gambling habits.[2] These numbers reveal how game like designs, whether for entertainment or financial tools, can blur the line between investing and wagering, making impulsive habits feel rewarding in the moment.
Being constructive, not confrontational
This article doesn’t accuse regulators or fintech companies of wrongdoing. Instead, it illuminates how design choices can shape user behavior. It’s grounded in peer-reviewed research and real-world data, not opinion. The goal is to inform, not malign. By pointing out where the path from option to action becomes risky, you invite better conversations: about advisor guidance, product transparency, and investor resilience.
Young adults are often the largest demographic using these trading platforms. Many are making investment decisions for the first time, lured in by app-driven rewards and trending counters. The danger? Instead of foundational habits like dollar-cost averaging and portfolio diversification, they’re chasing short-term “hot stocks.” This echos betting behaviors more than investing strategies.
The bottom line: From games to gains
The thrill of a trade shouldn’t overshadow the real goal of investing: steady growth and financial security. Research shows that Robinhood’s gamified design leads to herding and predictable losses, sometimes nearly 20% in just a month. My own work has shown that the same mechanics driving sports betting are creeping into finance, encouraging behaviors that feel exciting in the moment but often leave young adults poorer and more stressed.
That’s why the latest development reported by CNBC, Robinhood’s move into prediction markets for NFL and college football should serve as a wake-up call. When investing platforms blur the line between markets and betting, the risks for young investors multiply. What begins as an introduction to financial markets can quickly turn into speculation disguised as entertainment.
The path forward isn’t avoidance, but awareness. Young adults must recognize that the game is tilted against impulsive trades and wagers. True financial strength doesn’t come from chasing the next “Top Mover” or game-day prediction, it comes from habits that compound over decades. Gamification might capture attention, but education and discipline build wealth. And that is the only game worth playing.
References
[1] Barber, B. M., Huang, X., Odean, T., & Schwarz, C. (2022). Attention‐induced trading and returns: Evidence from Robinhood users. The Journal of Finance, 77(6), 3141-3190.
[2] Fisher, P. (2025, August 2). Betting your future away: How gamified finance is bankrupting America. Human Investing. Retrieved August 19, 2025.
