Sports Dominate U.S. Prediction Markets as Awareness Gaps Persist

The prediction markets industry continues to lean heavily on sports event contracts as its primary revenue driver, according to third-quarter 2026 consumer research from S&P Global Market Intelligence Kagan. The findings underscore both the sector's current strength and its long-term growth challenges as operators attempt to diversify beyond traditional sports betting.

The survey, which polled U.S. consumers on their prediction market activity over the past 12 months, found that 70% of active prediction market traders engaged with sports-related contracts. This dominance reflects the category's entrenched position despite significant industry investment in alternative markets. Of respondents, 36% traded on economic or financial outcomes, 33% on political outcomes, 26% on news and entertainment, and just 11% on other categories including cryptocurrency mentions and weather events. Tellingly, only 2% of traders exclusively focused on non-sports contracts over the same period.

The broader market penetration picture reveals significant headroom for growth. Only 10% of all survey respondents reported trading on prediction markets in the past year, and 23% indicated they had either bet on sports or traded on prediction market platforms. Awareness remains fragmented: while 42% of respondents knew prediction market operators existed but had not engaged with them, 44% reported never hearing of the category at all. The survey identified five prominent operators that command recognition among U.S. traders, including DraftKings and Polymarket.

The demographic profile of active traders mirrors traditional sportsbook customers: 61% are under 35 years old, while just 13% are 55 or older. Approximately 66% of prediction market traders are men. This concentration suggests the industry has successfully marketed to a specific demographic segment, primarily through advertising during live sporting events. However, it also highlights the challenge of building a more diverse customer base as the market matures.

A notable correlation emerged between prediction market participation and cryptocurrency adoption. The survey found that 55% of prediction market traders reported buying or selling cryptocurrency in the past year, suggesting significant overlap between these communities and potentially shared regulatory and reputational considerations for both sectors.

From an operational perspective, the data confirms what industry observers have long recognized: weaning traders away from sports contracts remains one of the sector's central challenges. While prediction markets have expanded into financial derivatives, political events, and various alternative outcome categories, none have achieved meaningful scale relative to sports. This concentration presents both opportunities and risks. On one hand, it provides a stable customer acquisition funnel tied to the sports calendar. On the other, it limits diversification and leaves the industry vulnerable to regulatory changes targeting sports prediction markets specifically.

The survey's geographic findings also merit attention: traders are distributed across all states rather than concentrated in states where traditional sportsbook gambling is prohibited, suggesting prediction markets are attracting incremental gamblers rather than simply displacing existing sportsbook activity.

The fundamental tension revealed in this data reflects a broader industry dynamic. Despite aggressive marketing and technological innovation expanding the category beyond sports, the customer base remains stubbornly focused on sports outcomes. As prediction market operators seek to mature and expand their addressable market, converting that 42% of aware-but-inactive consumers into regular traders across non-sports categories will likely determine whether the industry achieves sustainable growth beyond its current core audience.