U. S. President Joe Biden has also filed absolute pardons for billions of dollars in student loans, but that effort may be overturned by the Supreme Court this week.
Restarting student loan payments this fall could put a damper on sports site activities in the United States, and in the midst of the NFL season.
About 40 million Americans will have to resume student loan payments in October after a three-year pause due to the COVID-19 pandemic.
The payment moratorium gave borrowers monetary flexibility and more discretionary spending, some of which may have been used for legal sports betting.
But that holiday is over and the bill will start coming in for millions of young Americans who will become the key demographic for mobile sports app operators. The results of an Ipsos survey published earlier this year suggest that almost a quarter of bettors are under the age of 35.
“The top sports betting visitor is likely to be younger, about 36, compared to the top visitor to land-based regional casinos, who are between 50 and 65 years old and less likely to bear a heavy student debt burden,” analysts at Wells Fargo, a bank, wrote recently, according to the Earnings More newsletter.
Loan prices for consumers will also be significant. A Goldman Sachs economic studies report released earlier this week said returning to the pre-pandemic trend for student loan payments would mean they would accumulate $70 billion at an annualized rate.
“In theory, the Biden administration may simply seek to enforce a new policy by invoking a new justification, but this is unlikely (transition assistance to borrowers when bills are reinstated is more plausible),” the report said.
U. S. President Joe Biden has also filed absolute pardons for billions of dollars in student loans, but that effort may be overturned by the Supreme Court this week.
The effect of the closing of the negotiation on the purchasing power of US consumers has not gone unnoticed by consumers themselves. A recent survey by investment bank Morgan Stanley found that only 29% of consumers with federal student loans were confident they had enough cash to resume bills without converting their spending elsewhere.
“Consumers should reduce discretionary spending: The categories with the maximum negative net spending intentions remain electronics, toys, appliances, out-of-home dining and leisure/entertainment,” Morgan Stanley analysts wrote. Customers surveyed (61%) continue to say they are very likely to reduce their spending in the next 6 months. “
Most likely, sports are well below the must-have list for Americans already facing higher prices for food, housing and transportation. Redirecting much of customer spending toward debt repayment can hurt site operations.
Timing is another factor for bookmakers. If the hit to customer spending starts in October, it’s right in the middle of the normal NFL season, which is also the busiest sports season. For traders struggling to make a profit, any headwind news would likely be anything they don’t need to hear right now.
And some operators have dedicated themselves to catering to a younger visitor base, such as Betr, which announced another investment circular on Tuesday.
“Betr Media focuses primarily on original and short content, which the company believes will be the number one form of sports media consumption for men ages 21 to 34 and older without eating live sporting events,” the company said in a press release. .
Betr CEO Joey Levy told Covers in an interview that they see the possibility of growing the market of punters available through an easy-to-obtain sportsbook and widely viewed content. Student loan repayments can delay or deter long-term consumers from gambling soon.
“I see the industry as very nascent,” Levy said. I think there are a lot of potential sports bettors on the sidelines right now and we’re positioning Betr as the ultimate destination for those sports fans. “