According to a report by Macquarie, prediction markets are on track to reach a staggering $1.5 trillion in taker volume by 2030, significantly surpassing earlier projections.
In a recent client advisory, Macquarie analyst Chad Beynon projected that turnover on yes/no exchanges could reach levels 50% higher than previous estimates from just a few months ago. This forecast indicates a split of $783 billion attributable to non-sports activities and $705 billion derived from sports derivatives, highlighting the industry’s expansion beyond just sports.
“While sports and significant events such as the World Cup are important catalysts, the growth of non-sports markets is outpacing expectations and is likely to dominate volume by 2030, reinforcing the idea that prediction markets are evolving into a comprehensive event-trading ecosystem,” remarked Beynon.
Factors contributing to the increase in non-sports volume encompass cryptocurrency offerings and political derivatives, both of which are already among the largest segments beyond sports in prediction markets.
Envisioning Future Economics
If the $1.5 trillion volume projection holds true, it could generate approximately $50 billion in revenue collectively for operators of prediction markets. However, Beynon cautions that this figure may be fragmented similar to the online sports betting (OSB) landscape.
“We believe the prediction market sector could realize revenue of nearly $50 billion by 2030E, assuming a net take rate of 3.25% on taker volume,” stated the analyst.
Currently, the top two prediction market operators are private entities, while other competitors in the domain include financial services firms and gaming companies not exclusively dedicated to all-or-nothing derivatives.
It is feasible to project how the performance of prediction markets could influence company revenues. Beynon anticipates that an operator holding about 30% market share may generate approximately $7 billion in earnings before interest, taxes, depreciation, and amortization (EBITDA) on projected sales of $17 billion by 2030.
Expanding Competitive Landscape
From a market share perspective, the nascent U.S. prediction market industry has predominantly been led by a single operator. However, the competitive landscape is evolving rapidly, attracting numerous well-capitalized contenders.
Beynon references industry players such as DraftKings, Fanatics, FanDuel, Meta Platforms, Polymarket, Robinhood, and Underdog, suggesting they could achieve prominence in the prediction market arena in the upcoming years. DraftKings and FanDuel are particularly noteworthy, with FanDuel forming alliances with CME Group and Crypto.com and DraftKings developing its own exchange, indicating their commitment to prediction markets.
“These trends suggest that prediction markets and OSB may ultimately operate concurrently, addressing overlapping yet distinct customer segments,” the analyst concludes.
The ability of sportsbook operators to transition into yes/no derivatives will be crucial in the long run, particularly if no additional states endorse sports wagering, as the total addressable market for sports contract events could be 50% larger than online sports betting by 2030, according to Beynon.