There no requirement to be long the underlying before buying them though. And most people trading options aren't using them this way. Hedging is a legitimacy figleaf for options, everyone knows that most of the volume is in speculation, especially from retail.

> There's no equivalent instrument for sports.

Options on the sports team's parent company. I mean you want to hedge against financial losses due to on-field performance but also commercial performance, right? What is the utility of hedging purely against on-field performance?

That sounds _exactly_ like a gambling use case.