Australian multinational investment banking and financial services group Macquarie is bullish on the prediction markets sector, trusting it to reach a staggering $1.5 trillion in trading volume by the end of the decade. Analysts added that this figure far exceeds earlier forecasts.
Beynon Expects the Prediction Markets Sector to Grow
According to Macquarie analyst Chad Beynon, prediction markets’ volume could be on track to reach $1.5 trillion by 2030. This projection is roughly 50% higher than those of other analysts, painting a rosier picture of the sector’s future.
Beynon’s note clarified that the aforementioned figure is comprised of $705 billion coming from sports markets and $783 billion coming from non-sports markets. These estimates seem to trust that non-sports trades will continue to set prediction markets apart from their traditional sports betting counterparts. For reference, event contracts tied to political outcomes and cryptocurrencies
At the same time, Beynon believes that the sports option would still attract high volumes, especially during major sporting events, such as the FIFA World Cup and other big tournaments.
Beynon added that a trading volume of $1.5 trillion would mean revenue of roughly $50 million. A prediction markets operator with a market share of roughly 30%, on the other hand, could reach $7 billion in EBITDA.
Sportsbooks Could Easily Enter the Prediction Markets Space
According to Beynon, the most promising companies that could become top players in the prediction markets sector include DraftKings, Fanatics, FanDuel, Meta Platforms, Polymarket, Robinhood and Underdog. He cited DraftKings and FanDuel as two businesses whose event contract journeys could be worth following.
Benyon elaborated that sportsbooks’ expertise with sports betting means that they could easily shift to prediction markets.
However, Benyon’s predictions assume favorable regulatory conditions. For reference, prediction markets have long been a point of contention, with several states, state regulators, tribal gaming entities, and commercial operators saying that their products constitute illegal gambling.
While prediction markets are regulated by the Commodity Futures Trading Commission (CFTC) and claim that their products are not gambling, many have remained unconvinced. Kalshi, in particular, is facing trouble in Washington, where its products could be declared illegal gambling per the ruling of the state’s gambling laws.
At the same time, the CFTC has continued to jealously guard its exclusive right to regulate prediction markets and has initiated lawsuits against several states trying to regulate them.