The World Cup gave Wall Street its clearest evidence yet of prediction markets as a vital component in the US sports betting landscape as record trading, better pricing and growing investment reinforced analysts’ long-term outlook.
Stifel estimated “taker” trading volume on CFTC-regulated prediction markets, the closest equivalent metric to sportsbook handle, reached about $12.3 billion in June, nearly matching the $12.5 billion wagered through regulated U.S. sportsbooks during the World Cup month.
Prediction markets also offered better pricing than state-regulated sportsbooks throughout the tournament, according to Citizens.
Analysts pointed to the World Cup as evidence that prediction markets may be here to stay despite the legal uncertainty surrounding them, and increasingly present “more of an opportunity” than “a threat” for major sportsbook operators.
World Cup trading hits sportsbook levels
Stifel attributed June’s volume growth to the World Cup, expanding parlay products, increased marketing and continued product improvements, estimating CFTC-regulated prediction market notional volume doubled to roughly $40 billion during the month.
Kalshi remained the dominant exchange with more than 80% market share despite modestly losing ground following the launch of Robinhood-backed Rothera, while DraftKings began routing limited customer order flow through its in-house exchange.
Because taker volume measures only one side of each trade, Stifel considers it the closest comparison to sportsbook handle and a better gauge of customer activity than total notional volume.
Prediction markets outprice sportsbooks
Citizens tracked pricing across all 104 World Cup matches and found Polymarket posted the lowest average implied vig at 2.70%, followed by Kalshi at 4.71%. Among traditional sportsbooks, DraftKings offered the lowest average implied vig at 4.97%, ahead of FanDuel, BetMGM and Fanatics.
The World Cup marked the second consecutive marquee sporting event in which prediction markets outperformed traditional sportsbooks on pricing after also holding an advantage during March Madness. Citizens attributed the improvement to deeper liquidity, greater participation from market makers and increased competition among liquidity providers.
The firm said the upcoming NFL season will provide the next major test of whether “the pricing advantage is structural rather than event-driven.” After building momentum through March Madness and the World Cup, Kalshi and Polymarket will have their largest audience to date and their first full football season with significantly greater scale and brand awareness.
Sportsbooks keep investing
The World Cup also underscored how sports betting operators keep investing into prediction markets themselves.
DraftKings officially launched its in-house exchange, DKeX, in June, initially limiting trading to lower-volume sports while executives work toward routing more customer order flow internally over time. Stifel pointed to a growing list of new entrants and product launches across the sector, including Robinhood-backed Rothera, Meta’s planned prediction market initiative as well as Underdog‘s in-house exchange.
“The emergence of prediction markets seemingly has shifted from more of a threat for DKNG & FLUT into an opportunity,” Barry Jonas of Truist wrote, while cautioning that questions remain around investment levels, returns and ongoing legal challenges.
Jonas maintained buy ratings on both companies, saying their scale and breadth of online gaming products leave them well positioned over the long term. He expects both to maintain full-year guidance, though he said those outlooks remain increasingly dependent on the back half of the year and volatile NFL results.weighted and dependent on NFL hold.
