Super Bowl LVI weekend has arrived, with the Cincinnati Bengals set to take on the Los Angeles Rams. Data analysis firm PredictHQ suggests that more than 100 million Americans will watch the big game on Sunday. And while that might mean more eyeballs for advertisers, it also means a lot of people will be watching the game for a different reason: sports betting.

Recent changes to state laws in the United States have made sports betting more accessible. According to the American Gaming Associationa record 31 million Americans are expected to place bets on Super Bowl LVI, a staggering +35% increase from 2021. Total bets wagered are expected to approach $8 billion, an even more impressive increase of +78% compared to the Super Bowl last year.

Of course, when Super Bowl LVI ends, so does the NFL season. Americans betting on the big game may still have that speculative itch to scratch, and few viable short-term alternatives. The NBA playoffs are still months away, and college basketball’s March Madness doesn’t begin for a few weeks. And the MLB season could very well be delayed as the owners and players’ union are locked out.

So there is a chance that sports bettors will pull a page from their pandemic playbook and turn to the financial markets, at least for the next few weeks.

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Parallels exist between sports bettors and traders in the financial markets. For example, both groups are engaged in estimating probabilistic outcomes: will team A cover the gap or exceed the moneyline? ; What does implied volatility tell us about how Company B’s stock price will move if it overshoots or undershoots its earnings?

Sports betting and financial market trading have also become more accessible in recent years. Many sportsbooks accept bets from just $1, while split stock trading allows small traders to buy as little as 0.01 share of a stock. The contract size of S&P 500 E-mini futures is $50, which means the dollar value of a 1-tick move is $12.50, while the contract size of futures S&P 500 Micro E-mini is $5, which means the dollar value of 1 tick. moving is $1.25.

However, financial market traders have certain advantages over sports bettors. Not all sports betting allows you to exit a bet once it has been placed, while stop losses allow traders to easily exit positions. Once a sports bet is placed you are usually locked in, while liquid financial markets can allow traders to enter and exit positions with relative ease.

Financial markets also trade around the clock: stock markets are open six and a half hours a day, Monday through Friday; futures markets are open Sunday at 6:00 p.m. ET through Friday at 5:00 p.m. ET, with 30- or 60-minute breaks each day around 4:30 p.m. ET or 5:00 p.m. ET (depending on the market); the mints are open from Sunday at 5 p.m. to Friday at 5 p.m., without interruption; and cryptocurrency markets are available 24/7.

Sports bettors and financial market traders are cut from the same cloth: they are risk takers. And while sports bettors are unlikely to flock to the financial markets in droves as they did in 2020, a new wave of retail traders may emerge in February and March once the blow of whistle will sound on Super Bowl LVI.

— Written by Christopher Vecchio, CFA, Senior Strategist