BofA sees $1.1T sports market

Bank of America told clients this week that United States sports event contracts could grow into a $1.1 trillion annual market. (news.bloomberglaw.com) Bloomberg Law reported on April 9 that Bank of America’s estimate was based on annual volume, not company revenue, and that a 1 percent average fee would imply about $10 billion in annualized revenue for event-contract platforms. (news.bloomberglaw.com) The bank’s note landed as Kalshi dominated the category: Bank of America said Kalshi accounted for about 90 percent of activity on United States prediction-market exchanges, and sports made up 79 percent of that trading volume in March. (news.bloomberglaw.com) Event contracts are yes-or-no markets tied to an outcome, like who wins a game, and they trade on exchanges overseen by the Commodity Futures Trading Commission rather than by state sportsbook regulators. The legal fight over whether they are derivatives or gambling has accelerated since late 2024. (cftc.gov) (law.justia.com) That fight shifted again on April 6, when the United States Court of Appeals for the Third Circuit said the Commodity Exchange Act gives the Commodity Futures Trading Commission exclusive jurisdiction over swaps, including Kalshi’s sports-related event contracts, and barred New Jersey from enforcing its gambling laws against them for now. (law.justia.com) The Commodity Futures Trading Commission had already moved in a looser direction on February 4, withdrawing a 2024 proposed rule on event contracts and pulling back a 2025 staff advisory on sports event contracts. Chairman Michael Selig said the agency would pursue a new rulemaking instead. (cftc.gov) That regulatory opening has created a new sales pitch around sports sponsorships. Knox Sports has been promoting bundled campaigns that combine fan engagement, social media and on-site activations at budgets of about $100,000, using the larger event-contract story to argue that sports audiences are becoming more valuable to sponsors. (x.com 1) (x.com 2) Traditional gambling operators and their trade group are pushing back. The American Gaming Association said in March that prediction markets offering sports event contracts have diverted more than $500 million in potential sports-betting tax revenue, and its tracker now says the figure has topped $620 million since the start of 2025. (americangaming.org 1) (americangaming.org 2) The comparison point is large enough to explain the scramble. The American Gaming Association said United States commercial gaming revenue reached $78.7 billion in 2025, while Bank of America’s note suggested sports event contracts alone could eventually handle more than a trillion dollars in yearly volume. (americangaming.org) (news.bloomberglaw.com) For teams, agencies and brands, the immediate change is not a trillion-dollar business arriving overnight. It is that Wall Street, federal regulators, state gambling officials and sponsorship sellers are now talking about the same sports audience in the same week, with much bigger numbers attached. (news.bloomberglaw.com) (law.justia.com)