BofA Projects $1.1 Trillion in Sports Event Contracts -- Kalshi Controls 90pct of US Volume as

Bank of America Just Called Prediction Markets a Trillion-Dollar Asset Class

A Bank of America report released Wednesday projects that U.S. sports-related event contracts could reach $1.1 trillion in annual volume -- an eleven-fold increase from the roughly $100 billion expected this year. At 1% commissions, that translates to $10 billion in annual revenue for platforms. The report sent DraftKings (DKNG) and Flutter (FLUT) shares lower as Wall Street begins to grasp what futures traders already sense: prediction markets are becoming a distinct asset class.

Today's Prediction Market Snapshot


The Numbers Behind BofA's Call

• Kalshi: $9.8-9.9B monthly volume, ~90% U.S. market share
• Polymarket: $7.6-7.9B monthly, dominant in political and crypto markets
• Combined: $25.7B in March alone -- 13x increase from March 2025
• Key driver: 79% of Kalshi's March volume came from sports event contracts

BofA identifies three structural advantages over traditional sportsbooks: federal CFTC regulation enabling nationwide operation, accessibility to users as young as 18, and no state gaming taxes on winnings.

1. Sports Contracts Eating Sportsbooks ( Casino.org)

These are binary event contracts -- yes/no outcomes with derivatives-grade transparency, no point spreads or vigs. Today's Masters 2026 market alone has generated $109.9 million in volume across 45+ golfer contracts. That single golf tournament generates volume comparable to entire DraftKings product lines.

2. Polymarket's $20B Infrastructure Overhaul ( CoinDesk)

On April 6, Polymarket announced its largest upgrade since launch -- rebuilt matching engine, new smart contracts (CTF Exchange V2), and native stablecoin Polymarket USD replacing bridged USDC.e. ICE (NYSE parent) made a $600 million direct investment calling it a bet on bringing prediction markets into the financial mainstream. The hybrid CLOB architecture and institutional wallet support signal convergence with traditional derivatives markets.

3. CME's Event Contract Suite ( CME Specs)

For futures traders, CME has quietly built event contracts covering CPI, GDP, pro sports (football, basketball, hockey, baseball, golf, tennis, soccer), crypto, and politics. Same platform, same clearing, same margin infrastructure -- the most natural bridge into this space.

What to Watch

• Sportsbook stocks (DKNG, FLUT): BofA quantifies the existential threat -- even 10% of projected $1.1T is $110B diverted from traditional sportsbooks
• Regulatory battles: CFTC just sued Arizona, Connecticut, and Illinois over jurisdiction. Third Circuit backed Kalshi but Nevada blocked them this week.
• Polymarket migration: 2-3 week infrastructure transition could create temporary liquidity gaps
• CME expansion: Each new event contract listing brings institutional legitimacy

Sources: Kalshi, Polymarket, Robinhood. Analysis from Bank of America, CoinDesk, PYMNTS. Not financial advice.

Have a good weekend!

-- Fi

"The best edge is the one you can actually execute."