Pro Sports Team ETFs Blur Line Between Investment and Gambling as Wall Street Enters the Stadium

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In 1989, all-time hits leader Pete Rose was banned from Major League Baseball for life due to gambling activities. His reinstatement came only in 2024, months after his passing.

Today, Rose’s gambling controversies seem almost quaint compared to developments on Wall Street, where financial firms are rapidly expanding ways for fans to invest in their favorite teams—beyond stadium concessions and merchandise.

Soon, investors may be able to buy tickers linked to individual hockey or baseball teams—but these aren’t equity stakes in franchises. Instead, multiple asset managers have filed with the SEC to launch dozens of ETFs, one for each NHL team, with MLB equivalents also proposed. These funds are structured around new futures contracts tied to team-level seasonal statistics, though none have begun trading yet.

Some financial experts view this trend as troubling, warning that it erodes the distinction between investing and gambling.

“The line between gambling and investing has not simply been blurred; it has been erased,” said Robert Johnson, finance professor at Creighton University.

Firms including VolatilityShares, LeagueShares, Roundhill Investments, and Rex Financial are among those exploring this space.

Rex Financial announced on September 21 that it had launched Alpha Sports Holdings, a new subsidiary aimed at converting team performance into ETFs. Through its BaseballShares and HockeyShares suites, Rex has filed with the SEC for funds that would track MLB and NHL teams via futures contracts listed by CME Group based on indexes created by FutureSports. However, the underlying CME futures must first build a trading history before becoming viable for ETF use.

Each team’s index starts the season at a baseline score, fluctuating as statistics accumulate—runs scored, stolen bases, strikeouts—and resets during the offseason.

“The sports industry generates hundreds of billions annually, yet there’s never been a liquid, transparent investment vehicle tied directly to live game outcomes,” said Greg King, CEO of Alpha Sports, in a statement. “Alpha Sports was founded to create exactly that—a way for passionate fans to participate in their team’s success.”

Johnson remains skeptical, calling the sports-themed ETFs more speculative than investment-grade. “I thought the ETF landscape had hit rock bottom with leveraged and inverse products. At least those were backed by real assets. These structures—yes, structures, not assets—are gambling masquerading as investing,” he said.

In some instances, the proposed ETFs even offer leveraged exposure to single-team performance, amplifying risk further. While prediction markets already muddy the waters between betting and trading—with the NFL reportedly advocating for stricter state oversight—these ETFs diverge in design by tracking futures indices rather than discrete events like wins or losses. Still, Johnson argues that the rationale for such instruments falls flat when applied to individual investors.

“Prediction markets can serve a purpose through risk hedging and speculation, allowing natural position holders to manage uncertainty efficiently. But when everyday investors bet on teams they emotionally support, no meaningful economic function is served—and collectively, such behavior destroys value,” Johnson explained.

ETF Strategist Full Coverage:

This section provides deeper analysis of evolving trends in the ETF market.

Alex Michalka, VP of investment research at Wealthfront, echoes similar concerns. “The act of investing in team performance is indistinguishable from gambling because wagering on game outcomes doesn’t generate economic value,” he noted. “Even if a valid use case exists, most users will treat these funds emotionally—driven by fandom or entertainment—not logic.”

Futures contracts traditionally aid in risk management—for example, airlines locking in fuel costs or insurers preparing for weather-related claims. In theory, sports-related futures might allow sponsors, broadcasters, or venue operators to hedge financial exposure. Yet in practice, such players rarely engage with retail-focused ETFs, leaving them susceptible to manipulation and illiquidity.

Todd Sohn, chief ETF strategist at Baird Strategas, warns of inherent vulnerabilities: “Sports as an asset class isn’t new—but democratization via ETF wrappers introduces significant risks. With minimal institutional participation, expect poor liquidity, unreliable pricing, and heightened susceptibility to inside information regarding trades, injuries, or coaching moves.”

He also highlights seasonal weaknesses: “During the four-month off-season, trading halts altogether, creating extended periods of zero activity. Add thin trading volumes, wide bid-ask spreads, and emotionally charged pricing fueled by fan bias—and you’ve got a recipe for capital erosion.”
These risks are disclosed in fund prospectuses, but they underscore why many professionals caution against treating sports-themed ETFs as portfolio staples.

Nate Geraci, president of NovaDius Wealth Management and ETF expert, expects SEC approval regardless. “If the futures contracts operate smoothly and achieve adequate liquidity, I don’t foresee regulatory obstacles. Using futures inside an ETF structure isn’t unheard of—just uncommon in this context,” he said.

The SEC currently reviews proposed changes governing “novel” ETF offerings amid rising filings for unconventional funds, signaling growing scrutiny over innovation versus investor protection.

Geraci acknowledges the irony: “Originally meant to provide cheap, diversified access to markets, ETFs now often resemble costly, hyper-focused speculation tools. It’s a familiar pattern in asset management—firms race to monetize trending themes.”

Break Your Heart, Break Your Retirement

Evan Mills, financial advisor at Scholar Advising, emphasizes understanding the difference between productive assets and outcome-based bets. “Stocks reflect corporate earnings, revenue, and cash flows. Bonds promise fixed payments. But linking financial returns to athletic performance offers no fundamental yield—it’s pure chance wrapped in branding,” he said.

Attaching stock symbols to sports franchises adds perceived legitimacy without altering core risks. For emotionally invested fans, combining passion with money—especially in retirement accounts—can prove costly: “Watching your team lose hurts enough. Losing money—and savings—simultaneously makes heartbreak even harder to bear,” Mills added.

Not all sports ETFs rely on futures. On Sept. 22, Amplify ETFs submitted plans for the actively managed Amplify Pro Sports Private & Public Ownership ETF (PROS), which targets companies owning or operating professional teams, leagues, and venues—including private equity positions. At least 80% of holdings would consist of public and private entities involved in sports ownership and operations.

“PROS seeks to broaden access to professional sports investing through blended strategies—from public equities to private stakes,” said Christian Magoon, CEO of Amplify ETFs. “It’s still early days for the fund.”

Gabelli Funds’ Opportunities in Live and Sports ETF (GOLS)—launched in January—already trades on exchanges. Unlike performance-driven models, GOLS invests broadly across media, entertainment, and live-event sectors. Holdings include MSG Sports, Atlanta Braves Holdings, and Manchester United—but also non-sports firms like Disney and Liberty Media.

Still, fragmentation continues: MSG recently announced plans to spin off the New York Knicks and Rangers into separate publicly traded entities, reflecting ongoing refinement in how investors define exposure to professional sports franchises.

How Many People Can Write a $10 Billion Check?

Mauricio Rios, strategy director at Global Field Sports Consulting, questions whether packaging team-linked contracts into ETFs changes their intrinsic nature. “Owning shares in a company that runs a franchise reflects measurable asset values, future revenues, and governance standards,” he explained. “But speculative plays on stats lack such foundations—and mispricing can persist despite strong seasons.”

He advises evaluating key metrics beyond headline performance: “Fees matter. Liquidity constraints matter. Concentration risk matters. Cheering for a team and analyzing its investment viability are two different mindsets entirely.”

Matt LaPorta—a former MLB player turned investor—sees opportunity, however: “As franchise valuations surge, fewer buyers can afford controlling stakes. Platforms connecting everyday investors to elite assets help maintain momentum,” said LaPorta, who works with Dynasty Financial Partners. “Consider the Khosla family’s $9.6 billion purchase of the Seattle Seahawks. That kind of deal demands creative financing—and tokenization might be the next frontier.”

Broad market inclusion has merit, but LaPorta draws a clear distinction: “Equity-based ETFs tied to ownership represent true exposure. Futures-based models? Those are wagers dressed up as portfolios.”

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