Sports Betting Sites Could Take Hit from Restart of Student Loan Repayments

Sports Betting Sites Could Take Hit from Restart of Student Loan Repayments Pleas Subscribe For Daily Sports Betting News

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The restart of student loan payments this fall could put a damper on business at sports betting sites in the United States — and right in the thick of the NFL season.
Around 40 million Americans will have to resume repaying student loans in October after a three-year pause prompted by the COVID-19 pandemic. 
The payment holiday gave borrowers financial flexibility and more discretionary spending, some of which could have been used on legal sports betting. 
But that holiday is over, and the bill will start coming due again for millions of younger Americans who happen to be the key...

The restart of student loan payments this fall could put a damper on business at sports betting sites in the United States — and right in the thick of the NFL season.
Around 40 million Americans will have to resume repaying student loans in October after a three-year pause prompted by the COVID-19 pandemic. 
The payment holiday gave borrowers financial flexibility and more discretionary spending, some of which could have been used on legal sports betting. 
But that holiday is over, and the bill will start coming due again for millions of younger Americans who happen to be the key demographic for operators of mobile sports betting apps. Results of an Ipsos survey released earlier this year suggested nearly a fourth of bettors are under 35. 
“The core sports-betting customer likely skews younger, around 36 years of age, vs. the core land-based regional casino customer, which is typically between the ages of 50-65 and less likely to carry a significant student debt burden,” analysts from Wells Fargo, a bank, wrote recently, according to the newsletter Earnings+More.
Billions going elsewhere
Borrowing costs for consumers will be significant, too. An economics research report by Goldman Sachs released earlier this week said that a return to the pre-pandemic trend for student loan payments would mean they ratchet up by $70 billion at an annualized rate.
“In theory, the Biden administration could seek to implement a new policy citing a new justification, but this seems unlikely (transitional assistance to borrowers as payments are reinstated is more plausible),” the report said.
U.S. President Joe Biden has also proposed outright forgiving hundreds of billions of dollars in student loans, but that effort could be struck down by the Supreme Court as early as this week.
The looming hit to the spending power of American consumers has not gone unnoticed by the consumers themselves. A recent survey for investment bank Morgan Stanley found that just 29% of consumers with federal student loans were confident they have enough money to resume payments without tweaking their spending elsewhere.
“Consumers are looking to pull back on discretionary spending: categories with the most strongly negative net spending intentions continue to be consumer electronics, toys, home appliances, food away from home, and leisure/entertainment,” the Morgan Stanley analysts wrote. “Overall, the majority of consumers surveyed (61%) continue to say they are likely to cut back on spending over the next 6 months.” 
The bettor necessities
Sports betting probably falls well down the list of necessities for Americans already facing increased costs for food, shelter, and transportation. Having a huge chunk of consumer spending redirected back toward repaying debt could take a bite out of business at wagering sites. 
The timing is another issue for bookmakers. If the blow to consumer spending starts in October, that is right in the thick of the NFL’s regular season, which is also the busy season for sportsbooks. For operators struggling to turn a profit, any news of economic headwinds may be something they don’t want to hear right now. 
And some operators have leaned into catering toward a younger clientele, such as Betr, which announced another funding round on Tuesday. 
“Betr Media is focused predominantly on original and short-form content,...