Polymarket banner in front of the New York Stock Exchange on October 7, 2025.
Kevin Stankiewicz | CNBC
Prediction markets could reach $1 trillion in annual trading volume by the end of this decade, according to a new report from Eilers & Krejcik, a research firm specializing in the sports and interactive gaming industries.
“Many factors, including legal and regulatory challenges, could delay or derail the growth of prediction markets,” Chris Grove, partner emeritus and strategic advisor at Eilers & Krejcik, told CNBC. “But the fundamental elements of consumer demand and an array of diverse brands seeking to meet that demand are clearly in place.”
This growth will be fueled by sports, which E&K estimates will account for 44% of long-term volume in prediction markets.
The booming predictions space allows users to bet on cultural, political and sporting events, among other markets. The growing popularity of platforms like Polymarket and Kalshi has inspired traditional sportsbooks to launch their own prediction platforms.
Comparing the volume of prediction trades with that of sports betting, or the amount wagered, is complicated, because in prediction markets both sides of the trade are counted as volume.
For example, if someone buys a contract at 40 cents and someone else takes the position at 60 cents, that’s a dollar in trading volume. In sports betting, a dollar bet is strictly equivalent to a dollar on hand.
E&K developed a formula to translate prediction volume into management terms and concluded that mature sports prediction markets could support sports betting-style processing which represents approximately 60-80% of the current licensed regulated online sports betting market.
Of course, online sports betting is only legal in 31 states; prediction markets were launched in the 50s.
Robin Hood This week we introduced additional features to Prediction Markets that allow users to trade parlay and prop bets on the NFL.
“Sports betting is clearly seeing what’s happening and how it could completely disrupt their business,” CEO Vlad Tenev told CNBC on Wednesday.
Fanatics, in partnership with Crypto.com, launched Fanatics Markets in early December to offer prediction trading. DraftKings And FanDuel are expected to launch their own prediction platforms by the end of the month.
Currently, platforms like Kalshi, Robinhood, Crypto.com, Polymarket and Fanatics bring in about $10 billion, according to an analysis this week by Citizens. But analysts note: “Prediction markets are in the early stages of exponential growth as the asset class moves from speculation to a more mature component of capital markets, with institutions likely next.” »
Tenev put it more clearly: “We believe we are in the early stages of a predictive market supercycle.”
As markets mature, cross-selling to prediction customers is likely to diverge. After all, the way FanDuel brings a predictions customer to its online sportsbook or icasino will be very different from Robinhood trying to persuade a predictions trader to try trading stocks.
However, a broader trend is emerging: the convergence of investment and gaming.
“There has always been some overlap between the two, but we seem to live in a world where gaming is [becoming] it feels more like an investment, just like investing goes further and further in the direction of the game,” Grove said.
Disclosure: CNBC and Kalshi have a business relationship.