Prediction Market Taker Volume Lags Sportsbook Growth in September

While prediction markets experienced a spike in trading volumes in September, sportsbooks expanded at a quicker rate, prompting concerns about the industry’s ability to attract and retain sports bettors. According to data from financial services firm Stifel, prediction market taker volume was up 27% month over month, and regulated sportsbook handle was up 43%. Prediction Markets Struggle to Match Sportsbook Growth Stifel analyst Jeffrey Stantial looked at taker volume to see how prediction markets are doing versus traditional sports betting operators. This measure captures trades initiated by traders accepting existing offers and is considered more comparable to sportsbook handle than total notional trading volume, reported Casino.org. Regulated prediction markets had an estimated $17.7 billion of taker volume in September. This number is based on the correlation between taker activity and total notional trading on the two largest US prediction market platforms. The overall prediction market volume was up 64% to $77 billion for the month, but taker activity grew much more gradually. Sportsbook handle was up 43% in states that had reported September figures at the same time. The difference is clear as September kicked off the American football season, which usually drives betting activity. While the prediction market products have gotten better and hundreds of millions of dollars have been spent on customer acquisition, the platforms have not yet experienced the same kind of growth in retail trading activity. Smaller Prediction Market Platforms Struggle to Gain Market Share The figures may speak to a somewhat limited pool of potential customers, suggested Stantial. He also pointed out the risk of operators having a harder time keeping users who suffer big losses, especially when promotional incentives are no longer working. The bulk of prediction market activity is still contracts on sports events. According to Stifel’s analysis, single-event sports contracts traded under Commodity Futures Trading Commission (CFTC) oversight increased 23% month-on-month to $22.8 billion in September. Even faster to grow was trading on combinations of outcomes, which work much like sportsbook parlays. Demand for more complex sports-related contracts remains, as volume in this category jumped 122% to $41.6 billion. However, the numbers show traditional sportsbooks are still fighting hard for customers interested in sports betting. Stifel also looked at how smaller prediction market operators have been trying to compete against the dominant platforms. Most of these companies made little headway in September. Robinhood Markets and Susquehanna International Group co-own Rothera, which was one of the operators that failed to grab substantial new market share. DraftKings’ prediction market platform DKeX experienced a 2% increase in notional volume. Novig also made a little gain, hitting a 1.9% share of the market in September. Novig’s growth was aided by the advertising campaign featuring actress Sydney Sweeney. The commercial ran at the same time as a boom in mobile app downloads and first-time deposits, but the available data does not show what proportion of the platform’s growth was attributable to the campaign. The latest results are at odds with Macquarie’s broader view on the sector. Earlier in October, the financial services firm raised its prediction market taker volume forecast for 2026 to $190 billion from $169 billion, compared with $22 billion for 2025. It predicted that about 80% of the annual taker activity will be sports contracts. Macquarie also cited regulatory uncertainty as a major obstacle, with questions over whether contracts for sports events should be subject to federal commodities rules or state gambling laws potentially impacting future expansion.