The rapid growth of mobile sports betting and prediction markets is creating new credit risks for lenders, BofA Securities said in a note Friday.

The ease of placing wagers combined with highly gamified apps can lead borrowers to spend impulsively, take on more debt, and, in some cases, miss payments, according to the note. This trend could pressure credit quality, increase delinquencies, and weaken earnings for credit issuers, particularly those serving subprime borrowers, the analysts said.

"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.

The analysts said they see the greatest exposure for Bread Financial (BFH), Upstart (UPST), and OneMain (OMF), all of which serve lower-income or credit-stressed borrowers. Student-loan issuers, such as Sallie Mae (SLM) and Navient (NAVI), could also face pressure because college students and recent graduates are particularly at risk of financial stress driven by gambling.

Price: 63.37, Change: +1.70, Percent Change: +2.75