Bank of America: Sports prediction markets on track for $1.1tn volume

Summary

Bank of America estimates the US market for sports-related prediction contracts could reach about $1.1tn in annual trading volume. At a typical platform transaction fee of ~1%, that implies roughly $10bn in annual revenues for prediction-market operators. The finding highlights rapid growth and the blurring lines between prediction markets and traditional sportsbooks, driven by different regulatory pathways that allow national scale without state-by-state licensing.

The report notes Kalshi dominates US regulated activity (around 90% of transactions), with sports contracts representing 79% of Kalshi’s trading volume in March. Crypto.com is a distant second with roughly 4% of the market. Offshore platforms such as Polymarket were largely excluded from the domestic-focused analysis.

Bank of America and industry observers compare prediction markets’ early surge to the growth of legalised US sports betting after PASPA’s repeal — 2025 is described as prediction markets’ “genesis year.” In that first full year, prediction markets posted about $63.5bn in volume versus regulated sportsbooks’ $13.34bn recorded in 2019. The difference is partly due to national accessibility, integration with financial trading systems and automated liquidity providers. Revenue mechanics differ too: prediction markets tend to rely on small transaction fees (~1%) versus sportsbooks’ higher hold (~7.5%), meaning prediction platforms need much higher volumes to reach comparable revenue.

Author style

Punchy: this matters for investors and operators tracking where volume and revenue are migrating in iGaming and fintech. Read the detail if you want quick insight into market structure, incumbent share and how regulatory design is shaping scale.

Key Points

BofA projects ~ $1.1tn annual trading volume in US sports-related prediction contracts.
At ~1% transaction fees, prediction markets could generate roughly $10bn in annual revenues.
Kalshi currently controls about 90% of regulated US prediction-market transactions; sports contracts were 79% of its March volume.
Prediction markets scaled faster in their first full year (2025: $63.5bn) than sportsbooks did after PASPA’s repeal (2019: $13.34bn).
National regulatory models and integration with financial trading systems (plus automated liquidity providers) are key drivers of rapid growth.
Revenue models differ: prediction markets use low transaction fees (~1%) versus sportsbook holds (~7.5%), requiring much higher throughput for similar revenue.

Why should I read this?

Short version: if you follow sports betting, iGaming or fintech, this is one to skim. Prediction markets are scaling fast and could reshuffle where volume and revenues sit in the market — and that changes strategy for operators, investors and regulators. We’ve done the heavy lifting so you can see the headline numbers and what they mean in a minute or two.