The US prediction market sector is on the brink of mainstream adoption, with projections indicating annual trading could surpass $1 trillion.
Research by Eilers and Krejcik Gaming (EKG) highlights the shift from a niche market to a significant player intersecting finance, media, technology and culture.
Prediction markets differ from regulated online sportsbooks, which operate under varied state rules and taxes, by offering nationwide availability. This structure enables rapid scaling through online channels, integrating seamlessly into digital spaces where opinions and transactions occur.
EKG asserts that this wide reach provides prediction markets with a competitive edge over established gambling and financial products.
EKG’s report emphasises the need for a new classification approach, given their diverse range of topics, noting: “It’s well within the realm of the plausible that some kinds of markets may be more controversial,” pointing to sports markets as a potential outlier.
While sports are currently the dominant activity, EKG identifies various contract types, including financial indicators, political outcomes and cultural questions. Contracts can be based on any objectively verifiable outcome, expanding the potential market scope.
EKG predicts that a mature US prediction market could generate over $1 trillion in annual trading volume. Although sports currently dominate, they are expected to eventually account for only 44% of total volume eventually, as non-sports markets grow faster.
Citizens Financial Group forecasts the sector could exceed $10bn in annual revenue by 2030. Major fintech firms and political figures, including ties to President Trump, have accelerated market awareness.
Regulatory outcomes remain uncertain, with potential litigation or federal legislation impacting growth. EKG suggests a Democratic administration may face challenges in reversing recent developments.
Chris Grove of Eilers & Krejcik notes the convergence of investing and gambling, with consumer demand driving growth. Vlad Tenev, CEO of Robinhood, believes the sector is in the early stages of a prediction market supercycle.
