Sports Betting or Crypto: Which Is the Bigger Gamble for Your Hard-Earned Cash?

It feels good to feel like you're right, and, as all sports bettors know, that little hit of righteousness when you nail a bet is often just as elating as the cash return. Investing, on the other hand, is completely the opposite: Probably with some trepidation, you make a decision, and then you live with uncertainty for years, knowing that any gains you make can just as quickly be given back if the market turns. And there's nobody to tell you whether you've won or lost.

Plus, if you choose to dabble in cryptocurrencies like Bitcoin (CRYPTO: BTC), it's often an emotional roller coaster just to hold it for long enough to feel like you've given it a shot. So, is sports betting actually a better move than investing in crypto if you're looking to grow your hard-earned cash?

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They couldn't build big casinos if gamblers usually won

There's a technical tidbit about sports betting that most people placing bets simply don't grapple with.

Sportsbooks set prices so that even if bettors split 50/50, the house keeps the "vig," which is the built-in fee embedded in the odds. Per The Motley Fool's research, football bettors lost roughly 8% to 9% of their bets during recent football seasons. The average sports bettor loses 6% per bet, or roughly $6 in losses for every $100 wagered. Your losses become growth for sports betting stocks, rather than becoming growth for your portfolio.

Furthermore, a 2024 UC San Diego analysis of a large data set of online gamblers reported that 96% of gamblers appeared to lose money over the multiyear period studied. Of course, you can still tell yourself that you're going to beat those odds, if you really want to.

Bitcoin is volatile, but at least it goes up sometimes

Now, let's turn to evaluating crypto investments, specifically Bitcoin.

Bitcoin doesn't guarantee losses like sports betting does, but it does habitually punish those who impulsively buy at its peaks and sell during its troughs. The coin has had multiple drawdowns of over 50%, and its largest drawdowns tend to be about an 80% decline. It is very possible to lose a lot of your money by buying this coin, and the same goes for other cryptocurrencies as well.

But, for the record, even an 80% decline still leaves you with something in hand, unlike a losing sports bet, which leaves you with $0. As long as there's someone out there who is willing to buy Bitcoin, it can't go to zero, even if it can still fall a tremendous amount. Thanks to the coin's mining difficulty, which ramps up every four years, even if it experiences a consistent level of demand, its price can still rise over time.

Therefore, sports betting is by far a bigger gamble than buying crypto, especially well-established cryptocurrencies like Bitcoin. Buying crypto still means taking on plenty of risk, but at least you get control of an asset with the possibility of retaining its value, unlike the bets you take from the sportsbook.

Alex Carchidi has positions in Bitcoin. The Motley Fool has positions in and recommends Bitcoin. The Motley Fool has a disclosure policy.