Bank of America Securities warned that some private lenders, including student-loan giant Sallie Mae, are under “pressure” due to the rise of government-sanctioned online sports gambling.
The note released Nov. 21, 2025, mentioned both traditional online sports betting (e.g., DraftKings and FanDuel) and so-called “prediction markets” (e.g., Kalshi, Polymarket, and Robinhood).
States regulate traditional betting apps, while the Commodity Futures Trading Commission (CFTC) approves prediction markets. The latter are a controversial stock-market-style form of sports betting.
BofA released the note a day after U.S. Senator Mark Warner told CNBC that the unemployment rate for recent college graduates could soon hit 25%.
Stress for Student-Loan Lenders
MT Newswires summarized the BofA note:
“The negative financial impacts of sports betting are more pronounced for young men, especially in low-income areas,” the analysts said, adding that limited financial literacy, aggressive promotional incentives, and social-media-driven engagement can further amplify these risks.
Student-loan issuers, such as Sallie Mae and Navient, could also face pressure because college students and recent graduates are particularly at risk of financial stress driven by gambling.
Sherwood News had more from the note:
“Easy access and gamified interfaces encourage frequent and impulsive wagers, which can lead to overextension of credit and rising loan defaults,” wrote a team of analysts led by Mihir Bhatia. “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 lenders.”
More Context
- Residents of sports betting states have worse financial health (credit panel study, 2024).
- Half of online bettors are experiencing issues or are addicted (Maryland study, 2025).
- 90% of online sports bettors aged 18-34 think they can make money (Siena College poll, 2025).
- 47% of men under 30 believe sports betting is a bad thing for society, up from 22% in 2022 (Pew survey, 2025).
Big Picture
Numerous sports betting states have reported record monthly handle volumes this NFL season, suggesting that online sports betting spending has not peaked even in mature markets.
In 2024, the legal sports betting industry in the U.S. raked in $13.7 billion. Online casino gambling, legal in only a handful of states, generated $8.4 billion in user losses last year.
Prediction markets, including planned product launches from DraftKings and FanDuel, will bring online sports gambling to more states in 2026.
Meanwhile, many millions of Americans are suffering financial hardship due to high inflation, debt, rising unemployment, and, in some cases, severe gambling addiction.
Problem Gambling Help
The growing popularity of sports gambling will cause more people to be exposed to addiction.
You are not alone if you’ve developed an addiction to betting. You should consider talking to a therapist or counselor for help quitting gambling.
A gambling prevention or recovery coach could also help you or someone you know. Studies have shown that half of online bettors experience problems with their play.
Discover more from GamblingHarm.org
Subscribe to get the latest posts sent to your email.
