Prediction Market Traders Lose More Than Sportsbooks, Citizens JMP Study Finds.

A comprehensive study by Citizens JMP Securities has revealed that retail traders on prediction markets are experiencing significantly higher losses compared to bettors using traditional legal sportsbooks.

“Retail traders fare worse on prediction markets than sportsbooks A new report from Citizens JMP says median losses are deeper on prediction platforms as retail traders face sharper, better-capitalized counterparties What to know: - Retail users on prediction markets are losing more than legal sports bettors, with a median return of -8% since mid-2025 versus -5% on sportsbooks, while only the highest-volume prediction market traders are consistently profitable”

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The research, based on anonymized wallet data from analytics platform Juice Reel, found that the median return on investment for prediction market users was -8% from July 2025 through March 2026.

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This performance gap suggests that prediction markets may present greater financial risks for average participants.

The study indicates that only the highest-volume prediction market traders are consistently profitable while most retail users face substantial losses.

The performance disparity becomes even more pronounced when examining users who engage with both prediction markets and traditional sportsbooks simultaneously.

This crossover group posted a median ROI of +1% when using legal sportsbooks versus -6% on prediction markets during the same timeframe, according to the Citizens JMP analysis.

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This dramatic contrast suggests that the same traders perform significantly better when restricted to traditional sportsbook platforms rather than prediction markets.

The study notes that this pattern may indicate such users represent lower-quality customers for traditional betting operators who are increasingly facing competition from emerging prediction platforms.

The study identified a key structural difference between prediction markets and traditional sportsbooks that contributes to the performance gap.

“likes: Fact-checked byAngel Hristov The median return on investment for prediction market users was -8% from July 2025 through to now, compared to -5% for bettors in the legal US sportsbooks, Citizens Equity Research’s study says A new report byCitizens Equity Research analyst Jordan Bender, based on anonymized wallet data fromtracking platform Juice Reel, finds that retail users on prediction market platforms are performing worse than those betting through legal US sportsbooks”

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Prediction markets do not limit or ban profitable users the way regulated sportsbooks do.

In traditional sportsbooks, the house manages risk and filters out winning players, creating a more controlled environment.

In contrast, prediction markets expose retail traders directly to professionals, market makers, and high-volume participants who consistently take the other side of less informed flow.

Two professional bettors interviewed by Citizens JMP confirmed that prediction markets offer an attractive path to positive returns precisely because retail users provide the liquidity that sharp traders can exploit.

Despite the performance challenges for retail users, prediction markets appear to be capturing a younger demographic that traditional sportsbooks have struggled to reach.

According to Sensor Tower data analyzed in the report, about 24% of Kalshi users are under 25, with a median age of 31.

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In contrast, DraftKings and FanDuel have only about 7% of users under 25, with median ages closer to 35.

The age disparity is further emphasized by revenue patterns, with roughly 90% of DraftKings' revenue coming from users over 30.

This demographic shift is significant for the industry, as Kalshi recorded 6.3 million downloads from September 2025 through February 2026, while FanDuel and DraftKings experienced download declines of 18% and 13% respectively during the same period.

Industry executives from major sports betting companies have largely dismissed the threat of prediction markets, though the Citizens JMP report suggests there is measurable impact on customer acquisition.

“Retail traders fare worse on prediction markets than sportsbooks A new report from Citizens JMP says median losses are deeper on prediction platforms as retail traders face sharper, better-capitalized counterparties What to know: - Retail users on prediction markets are losing more than legal sports bettors, with a median return of -8% since mid-2025 versus -5% on sportsbooks, while only the highest-volume prediction market traders are consistently profitable”

@coindesk

On 4Q 2025 earnings calls, gaming executives estimated that prediction markets account for 0% to 5% of displaced sports betting volume.

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DraftKings' Jason Robins stated they are not materially incremental to existing customers, while Flutter's Peter Jackson found no evidence of material cannibalization.

BetMGM's Adam Greenblat estimated a low-to-mid-single-digit percentage impact on betting revenue.

Citizens JMP's own estimate aligns with this range at around 5%, though demographic trends suggest prediction markets may be capturing the next generation of bettors before they ever sign up for traditional platforms.