Bank of America strategists reportedly expect consumers’ growing use of prediction markets and sports gambling sites to create new credit risk for lenders.
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Bank of America strategists reportedly expect consumers’ growing use of prediction markets and sports gambling sites to create new credit risk for lenders.
Users’ losses on these platforms could create financial stress, with consumers taking on too much debt and defaulting on loans, the bank’s strategists said, according to a Tuesday (Nov. 25) report by Bloomberg.
“Easy access and gamified interfaces encourage frequent and impulsive wagers,” the Bank of America strategists wrote in a note, per the report. “For investors this convergence of entertainment and speculative finance signals heightened behavioral risk that could pressure credit quality, increase delinquencies, and impact earnings for issuers and subprime…