Sports Event Contracts Market Expected to Reach $1.1 Trillion

(AsiaGameHub) –   Bank of America is assigning a huge value to sports event contracts in the United States. According to Bloomberg, the bank projects the annual market will hit approximately $1.1 trillion— a number derived from the scale of the existing sports betting industry and the distinct fee models employed by prediction platforms.

Good to Know

• Bank of America pegs the U.S. sports event contract market at around $1.1 trillion annually.
• The bank anticipates that roughly 9% of this total— equivalent to some $100 billion in verified transactions— will materialize by 2026.
• Analysts link this positive outlook to federal regulatory backing, a younger user base, and the absence of gambling-like taxes on earnings.

Bank of America Assigns a Significant Value to Sports Contracts

While the profit potential is less than the headline figure, it’s still substantial. If prediction platforms retain just 1% of every dollar transacted via fees and comparable charges, a $1.1 trillion market would yield them over $10 billion in yearly revenue— which is why this forecast is notable beyond just the headline volume.

The reasoning behind Bank of America’s perspective doesn’t rely on traditional sportsbook economics. Sportsbooks incorporate vig (juice) into their odds, whereas prediction exchanges typically generate revenue via transaction fees and related costs. This structure offers the sector a unique value proposition for users and a distinct margin profile for operators.

Regulation is another key component of this outlook. Analysts cite federal support as a major factor driving the potential growth of prediction sports markets. This argument gained traction recently when a federal appeals court decided New Jersey couldn’t ban Kalshi’s offerings, as oversight falls under the CFTC rather than state gaming authorities.

This doesn’t mean the path forward is entirely smooth. Nevada has prolonged its ban on Kalshi, and debates persist over whether sports event contracts should be classified as federally regulated swaps or gambling products governed by state laws. Thus, while the upside potential is significant, the legal landscape remains inconsistent.

Bank of America also highlighted demand factors outside of regulation. Younger consumers are one driver, and geography is another. While sports betting is legal in numerous states, California and Texas still lack widespread legal sports wagering markets. As a result, prediction products could attract users from regions where sportsbook access is limited.

The short-term forecast is also noteworthy. Bank of America predicts that around 9% of the total $1.1 trillion opportunity will be realized this year, translating to approximately $100 billion in verified transactions by the end of 2026. This would leave ample space between the current market size and the long-term target.