Bank of America warned of growth in retail prediction markets and sports results, warning it could lead to consumer debt and bad debts. Legislation that allows platforms to be treated as trading services gives U.S.-based customers greater access to forecasting platforms.
The expansion of prediction markets is creating credit risk, as predictions can be as dangerous as gambling. On a platform like Polymarket, on average 84% of users lose money, and only a handful of whales achieve success with consecutive trades.
As reported by Bloomberg, Bank of America analysts warned that some users may rely on consumer debt forecasts. reported.
‘Easy access and a gamified interface encourage frequent and impulsive betting.warned BofA analysts.
After the Supreme Court struck down the federal ban on sports betting, U.S.-based traders now have broader access to prediction markets such as Calci and Polymarket.
Karshi and Polymarket offer new forms of betting and require prior interaction with pairs or contracts. The financial aspect of prediction markets can lead some users to take on debt in hopes of rapid profits.
The risks are even higher for short-term contracts or contentious issues that are expected to be resolved within minutes or hours.
Prediction markets blend investing and speculative gambling
Prediction markets are becoming one of the preferred modes to participate in crypto projects due to their quick resolution and transparent liquidity. Rather than waiting for some form of value, customers are looking for a combination of entertainment and speculative finance.
According to BofA, the use of predictive platforms can create more bad credit. The use of prediction markets is not prohibited by banks and is not directly reflected in credit scores. However, areas with more lenient gambling laws have lower credit scores on average and are more likely to file for bankruptcy.
The growing popularity and marketing efforts of polymarkets and karsi may amplify the impact of bad debts. Not unique to on-chain predictions, mainstream platforms also carry similar risks.
While Calci and Polymarket insist their business model is not gambling, analysts believe bad loans could rise as well.
Prediction allows easier gamified access
Cryptocurrency investing requires some knowledge and has not been user-friendly, but prediction platforms offer gamified access. Ease of use and FAQs will bring in a new wave of retail users conducting more limited research.
Polymarket has also expanded its reach by allowing traders to make predictions through existing brokerages. Polymarket founder Shayne Coplan said this is a tool for the platform to spread across the U.S. financial system.
Today, Polymarket US was approved by @CFTC for brokered trading, meaning people can trade Polymarket through their brokerage firms. An important milestone in penetrating the US financial system.
It’s very beneficial to our legal team and our US operations team. This process has historically taken years… https://t.co/F7vTXngo9Y
— Shayne Coplan 🦅 (@shayne_coplan) November 25, 2025
Currently, Polymarket is mostly available directly or through wallets, but purchasing Prediction Pairs tokens still requires USDC holdings.
Polymarket has seen an increase in questions, with over 9,300 questions so far in November. Predictive pair resolution times are also trending down and the market has become more dynamic, encouraging traders to act quickly and without thorough research.
Karshi and Polymarket set an all-time record in October with trading volume exceeding $8.5 billion, and continued their strong performance in November. Karshi was the main driver of growth, but polymarket
