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Are Credit Risks Lurking in Buy Now Pay Later, Gaming and Prediction Markets?

March 13, 2026 | 5 minutes reading time | By John Hintze

Credit scores are not fully capturing novel activities that could stress consumer borrowers.

Innovations in lending and investing that have particular appeal to young and less affluent populations may be increasing the risk exposures of traditional financial firms that lack insight into those markets.

Bank of America Securities analysts late last year flagged gambling and prediction markets as an emerging contributor to credit risk.

"Easy access and gamified interfaces encourage frequent and impulsive wagers, which can lead to overextension of credit and rising loan defaults,” said a BofA report cited by Yahoo Finance. “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.”

"Liquidity stress indicators are mounting,” as one in four bettors report missing bill payments because of wagers they made, and 45% lack adequate emergency savings, according to a U.S. News survey.

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Topics: Modeling, Data, Default, Metrics

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