Published on: April 20, 2026, 01:19h.
Updated on: April 20, 2026, 01:19h.
- Prediction markets appear to be capturing some interest from online sportsbooks.
- Prediction markets continue to be scrutinized regarding their sports contract trading.
The landscape of online sports betting is increasingly overshadowed by the rapid ascent of prediction markets.
Analysts are forecasting that when the first-quarter figures for states with legal online sports betting are analyzed, the total betting volume could show a decline compared to the previous year. John DeCree, the director of global gaming research at CBRE, noted in a recent communication that same-state online sportsbook (OSB) volume decreased by 2.3% in January and February.
Preliminary data from March indicates that this downward trend may persist. If same-state OSB volume continues to decline, it would mark the fourth consecutive month of year-over-year decreases,” DeCree clarified.
DeCree indicated that while various factors might contribute to the reduced same-state sports betting figures, it’s difficult to overlook the timing with the dramatic increase in sports contract trading volumes.
Trading in Prediction Markets
Towards the end of last year, regulated prediction markets began experimenting with sports-related contracts, facilitating the purchase and sale of yes/no shares regarding event outcomes.
State attorneys general, along with gaming regulators and lawmakers, have expressed concerns over the legality of sports contracts in prediction markets, asserting that such trading undermines the states’ authority to regulate which forms of gambling are permissible.
Platforms like Kalshi, DraftKings Predictions, and FanDuel Predicts enable trading of sports contracts in regions where online sports betting is not permitted. The Commodity Futures Trading Commission, under the Trump administration, has sought to strengthen the rights of prediction markets to conduct sports trading.
Regardless of the legal challenges surrounding prediction markets’ sports contract trading, DeCree emphasizes that they currently impact the volume of OSB.
Some OSB operators estimate that prediction markets might have a minor to single-digit effect on their volumes. However, data indicates that the impact could be more significant,” DeCree stated. “Monthly same-state OSB volume had seen double-digit growth until November 2025 before experiencing a downturn in December.
This overall dip in volume is also affecting the financial results for online sportsbooks. BetMGM has reported increased spending on acquiring and retaining customers, while DraftKings and FanDuel are experiencing rising costs associated with their prediction market initiatives.
The Advantage of iGaming
DeCree noted that even though iGaming is available in only eight states, it remains robust and “offers a more promising long-term outlook” for online gaming businesses.
CBRE predicts that iGaming revenues will surge by nearly 22% in the first quarter, with established markets like Pennsylvania (+17%) and New Jersey (+19%) still on the rise.
“In the long term, there is significant potential for expansion as more states consider legalizing iGaming,” DeCree added.
This year, only Maine has entered the iGaming market.