Are Prediction Markets the Future of Sports Betting? Industry Expert Explains the Threat to Sportsbooks

Traditional sportsbooks have long dominated sports betting, but prediction markets are beginning to challenge that position.

Their rapid growth is prompting debate over whether they can genuinely compete with sportsbooks or are simply another way to bet.

Speaking exclusively to SportsBoom, iGaming consultant and expert Brianna Page offered her insights.

"Prediction markets currently have an advantage over traditional sportsbooks because they allow users to trade on a much broader range of events. In traditional sportsbooks, the types of markets and wagers available often vary by jurisdiction due to regulatory restrictions. Prediction markets, however, can offer opportunities that may not be available through sportsbooks in certain jurisdictions, making them an attractive alternative for users seeking a wider variety of markets," Page told SportsBoom.co.za. 

Why Prediction Markets Are Growing So Fast 

Prediction markets are growing at a pace that's becoming difficult to ignore. 

Data from the Pew Research Center show that monthly trading volume reached around $24 billion in April 2026, up from $5 billion in late 2025.

By June 2026, monthly trading volume had climbed past $50 billion for the first time, based on Artemis data, with the FIFA World Cup contributing to the latest surge.

Speaking on the issue, Page told SportsBoom that prediction market contracts are often easier for new consumers to understand because they are typically structured as simple yes-or-no outcomes.

"This accessibility can make them more appealing to people who are new to wagering. At the same time, the ability to trade on a wide variety of everyday or novelty events may encourage more frequent participation by some users. Together, the product's simplicity and the broad range of available markets have contributed to the growing popularity of prediction markets relative to traditional sportsbooks.”

Why Prediction Markets Are Challenging Sportsbooks 

The growth of prediction markets is also drawing attention to how differently they operate from sportsbooks. 

While both allow users to speculate on sporting outcomes, the cost of running each business is very different.

According to Page, "Contrary to what many people assume, operating a traditional sportsbook is highly regulated and requires significant capital to launch and maintain."

Launching a sportsbook also entails licensing fees, regulatory compliance, responsible gaming requirements, integrity monitoring, technology costs, and ongoing operational expenses.

"By contrast, prediction markets have generally operated under a different regulatory framework, resulting in a lower cost structure for some operators," Page said.

That advantage has helped some prediction market operators scale quickly. 

Bank of America estimates that Kalshi now accounts for roughly 90% of the regulated U.S. prediction market.

Even so, traditional sportsbooks continue to attract strong user engagement. 

"As a result, many traditional sportsbook operators are closely monitoring the sector, and some have begun exploring or shifting resources toward prediction market offerings as a potentially more cost-efficient way to participate in the U.S. market," Page added.

Regulation Could Be The Deciding Factor

Prediction markets may be growing rapidly, but their long-term future remains unclear. 

That uncertainty is already playing out in the courts, with Arizona filing criminal charges against Kalshi. 

Nevada and Michigan have moved to block or restrict prediction market operators over sports event contracts.

"I believe the long-term outlook for prediction markets is uncertain, and I am sceptical that their current regulatory environment will remain unchanged beyond the current administration,” Page added. 

The regulatory debate is also extending beyond the courts. 

Kentucky has introduced a 14.25% excise tax on prediction market transaction fees, while North Carolina has proposed a 6% tax as lawmakers continue to examine how the sector should be regulated.

Page further stated that "regulation will ultimately be the most significant factor determining the growth and long-term stability of prediction markets. If prediction markets continue operating under their current federal regulatory framework, they have the potential to outpace traditional sportsbooks by offering a broader range of contracts and maintaining a lower-cost operating model.”

The debate is increasingly shifting from whether prediction markets pose a threat to how far they can go.

What This Means For Bettors

For bettors, the rise of prediction markets means more choice than ever before. Both prediction markets and sportsbooks now have more reason to improve what they offer. 

That could ultimately give bettors a better overall experience.