Doommongering that prediction markets will be coming for sportsbooks may have been exaggerated, as an analysis by Eilers & Krejcik Gaming now suggests. In fact, the agency believes the NFL will generate about $40.5 billion in betting this season, with at least $31.7 billion coming through mainstream sportsbooks.
Traditional Sportsbooks to Continue Driving Bulk of Betting Handle for the NFL
Another $8.4 billion of the total would be driven through the newly emerged prediction market vertical, with the split between the two verticals sitting at 79% to 21% in favor of legacy betting companies.
The agency is also forecasting an 8% year-over-year growth for the sports betting industry, which would be driven by sustained interest rather than any big events of the World Cup caliber.
“Prediction markets represent a meaningful second channel for NFL wagering but still small on a relative scale, reflecting a new sector with less of an installed base,” the report said.
Prediction markets are not necessarily popular with sports bettors per se, and they may in fact serve as a gateway to the activity. In other words, prediction markets may be attracting non-traditional sports bettors, although they do appeal to one specific crowd that comes from traditional sports betting – whales and sharp bettors.
Prediction Markets Attract a Slightly Different Crowd Altogether
Most of these bettors often face restrictions placed by sportsbooks, which cite rules around “entertainment” and “for-fun only” use of their platforms.
Prediction platforms act as middlemen, and they have no stake in setting the odds or betting against them, for that matter, allowing these specific bettors to hash it out with the rest.
Prediction markets, though, are hampered by one specific drawback – they can’t really offer the same sign-up bonuses, with sportsbooks benefiting from exemptions and rules around bonusing when calculating their revenue.
However, the company warns that there is no guarantee that its forecast will be fulfilled, adding that prediction markets are on the offensive and they may end up securing a larger share of the total.