Retail traders fare worse on prediction markets than sportsbooks
Retail traders experience greater losses on prediction markets compared to sportsbooks due to competition from sharper, better-funded traders.Summary
A new report from Citizens JMP reveals that retail traders are losing more money on prediction markets than on legal sports betting. From July 2025 to mid-March 2026, the median return for prediction market users was -8%, compared to -5% for sportsbook users. While high-volume traders (over $500,000) in prediction markets achieved a +2.6% ROI, all lower cohorts experienced losses, with the smallest accounts losing -26.8%. This disparity stems from prediction markets' lack of restrictions on profitable users, concentrating informed trading activity and exposing retail traders to professionals. Gaming CEOs largely dismiss prediction markets as a significant threat to online gambling, but the report suggests they may be attracting a younger demographic and intercepting potential sportsbook users.
(Source：CoinDesk)