Retail traders fare worse on prediction markets than sportsbooks

A caller study from Citizens JMP says median losses are deeper connected prediction platforms arsenic retail traders look sharper, better-capitalized counterparties

Mar 25, 2026, 5:26 a.m.

Prediction markets are exciting, but they’re not reliable wealthiness builders for retail users.

Research by Citizens shows that retail prediction marketplace users are losing much wealth than ineligible sports bettors, with the sharpest traders and marketplace makers capturing returns connected the different broadside of their travel which. The probe enactment besides reveals the platforms are drafting a younger demographic than accepted sportsbooks.

The median instrumentality for a prediction marketplace idiosyncratic was -8% from July 2025 done mid-March, compared with -5% for sports publication users implicit the aforesaid period, Citizens JMP Securities expert Jordan Bender wrote, citing transaction information from analytics institution Juice Reel.

Individuals trading much than $500,000 connected prediction markets generated a median ROI of +2.6%, accordant with sharp-bettor benchmarks validated by nonrecreational players. Every cohort beneath that level was negative, sliding to -26.8% for users trading little than $100.

No cohort wrong ineligible sports betting was profitable either, but the decay is little severe: the $500,000-plus sports betting cohort posted -0.6%, and the smallest accounts came successful astatine -29.3%.

One of the large differences betwixt the 2 platforms is who is connected the different broadside of the trade.

Prediction markets bash not bounds oregon prohibition profitable users the mode regulated sportsbooks do, concentrating informed travel connected the platforms. That flips the accepted model. In sportsbooks, the location manages hazard and filters retired winning players. In prediction markets, retail traders are straight exposed to professionals, marketplace makers, and high-volume participants who consistently instrumentality the different broadside of little informed flow.

Two nonrecreational bettors connected a Citizens JMP telephone past week said prediction markets connection a much charismatic way to affirmative returns precisely due to the fact that retail users supply the liquidity, the enactment reads.

Are prediction markets a menace to online gambling?

Gaming CEOs person dismissed the menace of prediction markets, according to the Citizens JMP report, which compiled enforcement commentary from 4Q25 net calls.

DraftKings' Jason Robins said prediction markets are not materially incremental to existing customers. Flutter's Peter Jackson said the institution recovered nary grounds of worldly cannibalization. BetMGM's Adam Greenblat estimated a low-to-mid-single-digit percent interaction connected betting revenue. Citizens JMP's ain estimation is astir 5%.

The bigger contented whitethorn not beryllium cannibalization but acquisition. About 24% of Kalshi users are nether 25, with a median property of 31, compared with conscionable 7% for DraftKings and FanDuel, wherever the median property is person to 35, according to Sensor Tower information cited successful the report. Roughly 90% of DraftKings gross comes from users implicit 30, the study said.

FanDuel and DraftKings downloads fell 18% and 13% year-over-year from September 2025 done February 2026, per Sensor Tower information cited by Citizens JMP. Over the aforesaid stretch, Kalshi logged 6.3 cardinal downloads.

Prediction markets whitethorn not beryllium pulling existing sportsbook users away. They whitethorn beryllium intercepting the adjacent procreation earlier they ever download DraftKings.