Bernstein's Ian Moore on why prediction markets are outpacing sports books
Speakers
Ian Moore
— US Entertainment Research Analyst, Bernstein
Summary
Ian Moore, Bernstein analyst, sees prediction markets continuing to gain share from traditional sportsbooks, with NFL week one as a key catalyst especially in non-sports-betting states like California and Texas. He estimates a $1 trillion+ volume TAM by 2030 and highlights DraftKings' efforts to build its own prediction market exchange to compete with Kalshi. Regulatory risk remains a coin toss, but the large opportunity supports multiple players.
- Prediction market volume benefited from World Cup, with NFL week one as next major catalyst.
- Games in California and Texas (non-sports-betting states) highlight addressable market for prediction markets.
- Total addressable market for prediction markets expected to exceed $1 trillion in volume by 2030.
- DraftKings building separate exchange ecosystem to capture prediction market growth, independent of Kalshi.
- Kalshi currently dominates, but there is room for multiple players.
- Robinhood reducing reliance on Kalshi, developing its own exchange; crossover between prediction market and sportsbook users remains significant but slowing.
- Regulatory arbitrage for prediction markets could change, but analysts are divided on likelihood.
Ideas
DraftKings poised for prediction market growth.
Prediction markets represent a massive total addressable market, north of $1 trillion in volume by 2030, with enough space for multiple players. DraftKings is building its own full-stack exchange ecosystem separate from dominant player Kalshi, positioning it to capture growth. NFL week one, featuring high-profile games in non-sports-betting states like California and Texas, provides a near-term catalyst for prediction market volumes, and over time, sportsbooks like DraftKings could benefit from users acquired in these states converting to sports betting when regulations change.
