Share 
Bank of America has upgraded DraftKings from neutral to buy, arguing that prediction markets may be helping expand the overall wagering market rather than taking business away from traditional sportsbooks.
The call came as DraftKings shares rose more than 8% on the day referenced in the report. Bank of America analysts said DraftKings could generate $400 million in fees next year, plus another $200 million to $400 million from market making.
Why BofA sees upside in DraftKings
The bullish case centers on the idea that sportsbooks and prediction markets can coexist. DraftKings and FanDuel have both launched prediction market products of their own, joining a broader wave that includes platforms such as Kalshi, Polymarket, and Novig.
According to the report, the U.S. sports betting industry set a revenue record last year as Americans placed nearly $167 billion in bets, citing American Gaming Association data. That broader growth is part of the reason analysts appear less concerned that event contracts will simply cannibalize sportsbook wagering.
DraftKings also pointed to momentum in its own event contracts business. The company said trading volume hit a record $218 million on the referenced Sunday, up more than 50% from the NFL’s first Sunday this season.
Prediction markets are drawing attention from younger bettors
The article also highlighted signs that younger users are active in the category. Bank of America Institute said Gen Z accounted for nearly half of all online betting in July, surpassing millennials’ share for the first time. A Betterment survey cited in the piece found that two-thirds of Gen Z investors said they place sports bets.
That demand is not limited to the biggest operators. Novig, a newer prediction market platform, reportedly saw trading volume jump 94% after an ad campaign featuring Sydney Sweeney.
What players should watch
For bettors, the main takeaway is that major operators appear to be treating prediction markets as an adjacent product, not necessarily a replacement for sportsbooks. The report also said legal challenges around prediction markets could ultimately benefit DraftKings, though it did not detail a timeline for that process.
What comes next will likely depend on how those legal questions develop and whether operators keep seeing trading growth in event contracts alongside their core sportsbook business. As always, bet responsibly.
—
Source: As reported by thedailyupside.com.
