Bank of America has predicted that the sports betting portion of the prediction market industry could grow into a $1.1 trillion business in the U.S.
That would give it an annual income of about $10 billion, Bloomberg reported.
Prediction markets allow users to place yes or no/A or B bets on nearly anything, from cryptocurrency prices to culture and election results, as well as the outcome of sporting events.
They have gained a reputation for being more accurate than traditional polling results, as users must put their money where their mouths are. Fox News, CNN and CNBC have partnered with Kalshi, the leading U.S. prediction market, while Dow Jones, the Wall Street Journal and Major League Baseball have partnered with Polymarket, the leading global prediction market that is only now reentering the U.S.
About 80% of Kalshi’s U.S. business is sports-related wagers.
BoA’s estimate represents a 10x growth in the size of prediction markets from today.
While prediction markets are blockchain-based — Kalshi is on Solana and Polymarket on Polygon — they accept wagers in fiat currency as well as cryptocurrencies and stablecoins.
Prediction markets have proven controversial, with a number of U.S. states suing them for offering unlicensed sports betting — something regulated by the states. The Commodity Futures Trading Commission and prediction markets say they are exclusively regulated by the CFTC and don’t need state licenses.
The CFTC and Department of Justice have sued several states over their attempts to regulate prediction markets — most notably Arizona’s recent criminal charges against Kalshi.
