Amid perceived rising competitive pressures from prediction markets, credit investors are demanding more compensation to own corporate debt issued by casino and sportsbook operators.
Over the past 30 months, spreads on junk-rated gaming industry debt surged 250 basis points, according to Bloomberg data. That spike occurred as credit spreads across most other industries narrowed. It also accrued against the backdrop of soaring volume on yes/no exchanges. A recent report by Macquarie indicates that with the help of the World Cup, notional volume across prediction markets jumped to $33 billion last month.
Credit…