Sports Event Contracts Could Reach $1.1 Trillion

Bank of America is putting a massive number on sports event contracts in the U.S. Bloomberg reported that the bank sees the annual market reaching about $1.1 trillion, a figure built from the size of the current sports betting economy and the different fee structure used by prediction platforms.

Good to Know

• Bank of America estimates the U.S. sports event contract market at roughly $1.1 trillion a year.
• The bank expects about 9% of that total, or around $100 billion in verified trades, to show up in 2026.
• Analysts tied the outlook to federal regulatory support, younger users, and the lack of gambling-style taxes on winnings.

Bank of America Puts A Huge Number On Sports Contracts

The profit story is smaller than the headline figure, but still huge. If prediction platforms only keep about 1% of each dollar traded through fees and similar charges, a $1.1 trillion market would still leave them with more than $10 billion in annual revenue. That is why this forecast stands out even beyond the headline volume number.

The logic behind the Bank of America view is not based on standard sportsbook economics. Sportsbooks build vig into odds, while prediction exchanges usually make money through transaction fees and related charges instead. That setup gives the sector a different pitch to users and a different margin profile for operators.

Another big part of the case is regulation. Analysts pointed to federal support as one of the main reasons prediction sports markets could keep growing. That point has gained weight in recent days after a federal appeals court ruled that New Jersey could not block Kalshi offerings because oversight belongs to the CFTC, not state gaming regulators.

That does not mean the path is fully clear. Nevada has extended a ban on Kalshi while fights continue over whether sports event contracts should be treated as federally regulated swaps or as gambling products subject to state law. So the upside case is large, but the legal map is still uneven.

Bank of America also pointed to demand factors that go beyond regulation. Younger users are one driver, and another is geography. Sports betting is legal in many states, but California and Texas still do not have broad legal sports wagering markets. Prediction products could therefore pull in users from places where the sportsbook map is still restricted.

The near-term forecast is also worth watching. Bank of America expects about 9% of the full $1.1 trillion opportunity to show up this year, which implies roughly $100 billion in verified trades before 2026 ends. That would still leave plenty of room between today scale and the full long-run target.