Prediction markets are positioned to reach $1 trillion in annual trading volume by 2030, according to a new analysis from Eilers & Krejcik, a research firm specializing in sports and interactive gaming sectors. The projection comes as traditional sportsbooks rush to launch their own prediction platforms amid growing consumer demand.
What Happened: Market Projections
Sports wagering will drive nearly half of the predicted growth, representing 44% of long-run volume for prediction markets, according to the Eilers & Krejcik report. The platforms enable users to wager on outcomes across culture, politics and sports.
Chris Grove, partner emeritus and strategic advisor at Eilers & Krejcik, told CNBC that legal and regulatory challenges could slow the sector's expansion, but the fundamental drivers of growth remain firmly established.
Rising popularity of platforms like Polymarket and Kalshi has pushed traditional sportsbooks to enter the space. Robinhood this week introduced additional prediction markets features allowing users to trade NFL parlay and prop bets.
Comparing prediction trading volume to sportsbook handle presents complications because prediction markets count both sides of each trade as volume.
A 40-cent contract purchase paired with a 60-cent position equals $1 in trading volume, while sports betting counts a $1 wager strictly as $1 in handle.
Eilers & Krejcik developed a formula to translate predictions volume into handle, concluding that mature sports prediction markets could support sportsbook-style handle reaching 60% to 80% of today's licensed regulated online sports betting market. Online sports betting operates legally in 31 states, while prediction markets have launched in all 50.
Fanatics, partnering with Crypto.com, launched Fanatics Markets in early December to offer predictions trades. DraftKings and FanDuel are expected to launch their own prediction platforms by month's end.
Current platforms including Kalshi, Robinhood, Crypto.com, Polymarket and Fanatics are generating approximately $10 billion in volume, according to a Citizens analysis.
Robinhood CEO Vlad Tenev told CNBC Wednesday that sportsbooks recognize the potential disruption to their business model.
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Why It Matters: Market Evolution
Prediction markets are transitioning from speculation to a mature capital markets component, with institutional participation likely next, according to Citizens analysts. Tenev characterized the current environment as the early stages of a prediction market supercycle.
The maturation process will produce divergent cross-selling strategies as companies like FanDuel and Robinhood pursue different customer conversion paths. A broader trend is emerging toward convergence between investing and gambling.
Grove noted that while overlap between the two sectors has always existed, the current market shows gambling becoming more like investing as investing pushes further toward gambling-style activity.
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