Sports Dominate Prediction Markets. Executives See a Bigger Future Beyond Them

NEW YORK — Prediction market executives are confident that financial, cryptocurrency, and other contract types will eventually displace sports as their industry’s dominant business. Attracting customers and institutional money will require overcoming obstacles that football-driven growth has yet to resolve.

Key Takeaways

• Sports account for roughly 80% of trading volume, but executives expect financial, crypto, and other markets to grow faster.
• DraftKings and Robinhood are developing election hubs, simpler products, and connected platforms to attract customers beyond sports.
• Collateral requirements and fragmented liquidity remain barriers to institutional trading, while diversification could reduce exposure to sports-related legal challenges.

Industry leaders insist better technology, easier access, and new products will overcome those barriers.

Sports generate roughly 80% of prediction market trading volume, according to a Bank of America presentation at last week’s NEXTPredict conference. College and professional football account for much of that activity, underscoring the industry's reliance on a seasonal source of trading volume.

But multiple conference speakers, many of them representing prediction markets, described opportunities ranging from cryptocurrency prices and corporate earnings to weather risks and economic announcements as part of a bright future where sports trades become a diminishing share of the industry’s trading volume.

Stakeholders maintain that operators are developing novel ways to bring customers into those markets, including election hubs, streamlined financial products, and apps that make trading a range of contracts even easier. At last week’s conference in Midtown Manhattan’s glistening Hudson Yards office complex, prediction markets’ largest volume generator was overshadowed by talks of a multitrillion-dollar industry driven by a diverse range of traders, hedgers, and investors large and small.

Building markets deep enough for the large investors driving the industry’s bullish sentiment remains a separate challenge. That challenge, operators believe, is already being addressed.

Last week, DraftKings CEO Jason Robins, whose company straddles the line of sports betting and sports event contracts, told a standing-room-only crowd of fellow prediction market optimists that financial contracts had already exceeded his expectations, encouraging further investment before a stronger promotional push. DraftKings’ exchange ranked third in U.S. notional trading volume for the week ending Oct. 18 with most activity concentrated in sports, but it was the platform's comparatively limited additional offerings, Robins said, that had generated much of the growing enthusiasm around the product.

“Even without (promotional spending), we’ve seen great signal, which is why we’re so encouraged, and why we’re investing more,” Robins said.

A different business mix

Wall Street research and brokerage firm Bernstein’s forecast in April projected sports would account for around 31% of prediction market volume by 2030. A revised September forecast put sports at 38% by 2035. 

A smaller sports share would not necessarily mean less sports trading, per the analysis. It would require financial and other categories to grow significantly faster.

An industry starting at 80% sports would need more than nine times its existing non-sports volume to reach a 30% sports share even if sports volume stayed flat. And continued sports growth, which is still a stated goal of many prediction markets, would raise that requirement.

JB Mackenzie, Robinhood VP of futures and prediction markets, pointed to emerging demand for trading products beyond sports. Speaking at last week’s conference, he said a Federal Reserve interest-rate decision was the platform’s largest September event contract.

Mackenzie argued that expressing an economic forecast through a simple probability could appeal to newer investors who find options pricing and other conventional financial instruments difficult to understand. Regulators urged prediction markets to stop presenting event contracts using traditional American sports betting odds, but stakeholders at the conference argued that the current probability-based format makes contracts far more digestible for the general public.

“I think that is the really true, untapped opportunity that’s out there that investors are looking for,” Mackenzie said.

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Platform is critical

Other industry figures agree this transition beyond sports starts with the product.

Robins said most sportsbook customers remain focused on sports, though his platform already has cross-over appeal tied to other offerings. DraftKings’ broader app strategy could make experimentation easier.

Robins described plans to connect products through shared accounts and wallets, reducing the need for customers to switch apps, register again, or make additional deposits. He also emphasized personalization, describing how a platform could prioritize election-related content for an interested customer without displaying every available product

During a separate panel Thursday, DraftKings SVP of prediction markets Jeanine Hightower-Sellitto described a politics hub that would combine information with trading opportunities, as well as a similar offering for crypto. She said the goal is to create destinations where customers can follow a subject and use their knowledge, rather than simply browse a list of contracts.

94% of prediction market volume is either on sports or crypto trading, per Bank of America

— Ryan Butler (@butlerbetstrade) October 23, 2026

Robinhood has also developed its election offering, with Mackenzie describing district-level navigation allowing customers to explore individual races.

For a growing number of companies within the sports and finance space, the tech acceleration already underway was justification for prediction markets’ hype. Speaking at a panel last week, Underdog founder Jeremy Levine, whose company helped launch the burgeoning daily fantasy “plus” industry, called the next wave of tech disruptors key drivers of the industry’s future success.

“It’s going to be really interesting to see the innovation that comes from startups in this space,” Levine said. “I think that’s where a lot of kind of what is next is likely to come from, as is the case in kind of anything fast-growth space, but it hasn’t happened yet.”

Finding customers beyond sports

Beyond accessibility, prediction markets also must find ways to generate interest in their non-sports offerings, which itself presents a new set of challenges.

Elections, including the upcoming U.S. midterm elections, offer an opportunity to attract customers to political contracts. But political trading is cyclical, panelists throughout the event acknowledged, especially compared to the daily cycle of competition that can generate sports event contracts.

Economic announcements, crypto, and company-performance contracts could provide additional daily - or even hourly - reasons to return between major elections.

More immediate expansion beyond sports includes short-duration cryptocurrency contracts, which already are one of the largest trading volume categories. That could reduce sports’ share without necessarily diversifying the industry’s customer base beyond retail traders.

Speakers also described contracts allowing customers to trade specific financial views or manage existing business risks.

Bank of America analysts explained that correctly predicting a company’s revenue does not guarantee a profitable stock trade because share prices can move contrary to expectations following financial disclosures. A contract tied directly to those results could isolate the forecast an investor wants to express.

Other examples mentioned last week included a ski business hedging against insufficient snowfall or a business managing losses from a storm-related closure. In recent weeks, prediction market stakeholders have cited bars and restaurants that used contracts tied to local teams' postseason games to offset potential revenue losses.

Building markets investors can use

In New York, prediction market proponents were quick to lay out the myriad ways in which retail traders could be attracted to purchase contracts on events beyond sports. Attracting institutional customers, which backers see as a major financial opportunity, presents significant additional structural challenges.

Bank of America analysts identified collateral requirements and liquidity as major constraints. Many contracts require traders to put up the cash needed to cover their potential losses; longer-term contracts can tie up capital far longer than a sporting event, making them less attractive to institutions.

Large investors also need enough counterparties to enter, adjust, and exit meaningful positions at usable prices. Some company-performance markets attract only a few thousand dollars in volume, analysts at the conference noted, and institutions may merely examine those probabilities as research without being able to trade them at scale.

Several speakers identified liquidity scattered across separate exchanges and clearing arrangements as another major hurdle. More platforms can expand access while dividing the money available to fulfill orders.

That creates a difficult sequence: Institutions want deeper markets before committing substantial capital, while building that depth requires more participation and money. With legal challenges complicating potential mergers and acquisitions, prediction markets face fragmented liquidity and no obvious solution beyond attracting more institutional trading.

And, critically, investment in the companies themselves does not automatically provide the trading capital needed to deepen individual markets.

Growth before court decision

Despite those structural challenges, expectations for massive growth in non-sports event contracts underpin the industry’s bullish outlook. Diversification away from sports serves as a hedge against future legal actions that could have a crippling impact on an industry too dependent on sporting events for its multibillion-dollar corporate valuations.

Dozens of ederally recognized tribes, state attorneys general, and gaming industry stakeholders have filed lawsuits challenging prediction market operators’ sports event contracts, arguing that they constitute illegal gambling. Both sides expect Supreme Court action, and while a final determination remains unclear, a ruling against sports event contracts would strip prediction markets of their largest trading-volume category.

Speakers during last week’s event expressed confidence the courts would rule in their favor. Some argued that even an adverse decision would leave platforms with opportunities to survive and expand, supported by investments in products, promotions, and public familiarity. Robins was among the prediction market stakeholders who have argued his company is well positioned in any legal environment.

But reaching sports-level volume in other categories would require substantial additional interest in products tied to cryptocurrencies, commodities, and financial hedging. Backers believe broader retail and institutional familiarity, along with more tailored trading platforms, will drive adoption. Whether those products gain traction beyond the industry's current customer base remains to be seen.

Still, in Hudson Yards last week, speakers expressed little doubt that sports would make up a diminishing share of the prediction markets’ future. Although legal rulings could accelerate the shift, speakers emphasized innovation as the main driver of a future in which sports account for a smaller share of trading.

For Robinhood’s Mackenzie, the evolution is already taking place. A “revolution” was already underway in not just sports, but also politics, business, and financial markets overall.

“The products that we’re building today are going to be looked at sort of like dinosaurs in less than probably two or three months,” Mackenzie said.

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