Prediction market users lose more than sports bettors

A March report from Citizens that tracks user activity from July 2025 found the median loss for prediction-market users was 8%, compared with 5% for sportsbook customers. Traders staking less than $100 lost roughly 25%–30%.

The report breaks performance down by wallet size. Traders who placed more than $500,000 had a median return on investment of about 2.6%. Even the highest-volume sportsbook users were slightly unprofitable at about -0.6%.

Returns declined as wallet size fell: $100,000–$500,000 traders returned about -1.5%, $10,000–$100,000 about -2.4%, $1,000–$10,000 about -7.2%, and sub-$100 users lost over 25%. Among customers active on both platforms, sportsbooks delivered about a +1% ROI while prediction markets returned about -6%.

Citizens published an earlier January report that also found larger losses on prediction markets. That analysis showed a median loss of 7% on prediction markets versus 1% for other gambling products, with the weakest quartile and decile posting heavier losses.

The reports note average bet sizes are larger on prediction markets, about $185 compared with $55 on sportsbooks. Prediction markets pair users against each other rather than against a house, and larger bets increase volatility for retail participants.

State regulators, federal lawmakers and sports organizations have raised concerns about insider trading and market manipulation in prediction markets. Several leagues and collegiate bodies have asked operators to pause contracts they consider susceptible to manipulation.

Executives at major operators reported in fourth-quarter earnings calls that prediction markets had not affected their sports-betting businesses, while those companies missed analyst expectations for the quarter.

Citizens reported that more than two dozen prediction-market platforms are licensed or seeking approval. The report notes many entrants may not survive, drawing a parallel to the early U.S. online sports-betting period when many operators exited and a small group later held most market share.

The Citizens reports state that consumer-outcome data could be relevant to courts and regulators deciding whether prediction markets should be treated as financial instruments or as gambling products.