Publication Date: November 24, 2025, 08:10h.
Updated on: November 24, 2025, 08:10h.
- Two major sportsbooks could unlock a $5 billion potential in US prediction markets, according to an analyst.
- Estimation is based on $4.4 billion in sports-only contracts.
- It also takes into account 40% of the eligible US betting age population lacking access to legal sports betting.
Flutter Entertainment’s (NYSE: FLUT) FanDuel and DraftKings (NASDAQ: DKNG) are projected to tap into a $5 billion market for US prediction platforms, as stated by a leading sell-side analyst.
In a recent report for investors, Macquarie analyst Chad Beynon made this estimate, which is grounded in $4.4 billion from sports-only event contracts and an additional $600 million from non-sports yes/no derivatives. Both DraftKings and FanDuel plan to unveil their prediction markets within the next few months. Beynon underscores that the sports-only total addressable market (TAM) for US prediction markets is projected to be 25% lower than the online sports betting handle, due to a narrower wagering selection and diminished promotional activity.
“To gauge potential sports prediction volumes in the upcoming years, one might take the current weekly volume estimate of $1.3 billion (mostly arising from states lacking legal OSB), multiply by 1.38, and then annualize this figure, considering that these volumes are now occurring during a peak NFL season, which will ultimately reflect higher growth when annualized,” the analyst notes.
Beynon further notes that non-sports prediction markets operated by DraftKings and FanDuel are likely to produce volumes approximately 70% lower than their sports-exclusive offerings, signifying a better balance compared to Kalshi (an estimated 90% sports focus) and less diversification than Polymarket (33% sports).
DraftKings and FanDuel to Join the ‘Big Five’
As the leading sportsbook operators in the US, FanDuel and DraftKings are entering the sports event contracts sector later than their competitors, suggesting they may face challenges in rapidly capturing market share from Kalshi and Polymarket. Nonetheless, this duo is anticipated to ascend within the hierarchy of sports prediction markets.
“For US sports-only prediction markets, we cautiously forecast slightly higher market shares for Kalshi, Robinhood, and Polymarket due to their first-mover edge,” Beynon adds. “We expect the ‘Big Five’ prediction platforms to include DraftKings, FanDuel, Kalshi, Polymarket, and Robinhood. With a 4.7% take rate on volumes, this yields a near-term TAM approaching $4.4 billion (focused solely on non-legal OSB states).
Sports events, particularly the NFL, have significantly boosted transaction volumes on Kalshi and various prediction markets, yet there remains much more to the event contracts industry. Historically, it was electoral politics that propelled yes/no exchanges into the mainstream, and users have showcased an appetite for diverse offerings, from cryptocurrency contracts to mention markets, presenting additional revenue opportunities for DraftKings and FanDuel, despite being less than the $700 million Beynon predicted in sports-only derivatives.
“For the US non-sports prediction market, we project volumes to be approximately 30% of those associated with sports betting contracts,” explains the analyst. “This assessment is reasonable as it solely encompasses non-legal OSB states, leading to a significantly higher proportion of sports volumes being the primary product for betting in those areas. Assuming a 2% take rate on these volumes gives us a near-term total addressable market of about $600 million (with a focus on non-legal OSB states). At respective market shares of 8% and 12% for DKNG and FLUT, we derive revenues of approximately $45 million and $67 million.”
‘Multiform’ Solutions Emphasize Benefits for DraftKings and FanDuel PMs
Reiterating the notion that the prediction market decline affecting shares of DraftKings and Flutter was exaggerated, Beynon cites other elements contributing to the stocks’ struggles, including well-publicized low hold rates on NFL games. He also remarks that some investors have expressed frustration with the stocks’ underwhelming performance in 2025, and certain market participants appear to be factoring in the most pessimistic scenarios regarding the future of prediction markets for these major sportsbooks.
“In this scenario, one would need to believe that all US states legalize OSB and DKNG/FLUT are prohibited from offering prediction markets in any US jurisdiction, as mandated by state regulators,” the analyst concludes. “Additionally, one would have to accept a cannibalization rate of roughly 40% to justify the estimated $10 billion in market value loss for DKNG, and an even steeper rate for FLUT to explain the $20 billion reduction in market cap.”