Make Me Smart How prediction markets are transforming sports betting
Nov 25, 2025
Dustin Gouker, a seasoned gambling industry writer and analyst, joins the conversation to explore the impact of prediction markets on the sports betting landscape. He highlights the explosive growth of online betting since 2018, with over $100 billion wagered annually. Dustin delves into how prediction markets, like Kalshi and Robinhood, differ from traditional sportsbooks, and discusses their potential to enhance fan engagement. Legal battles loom as states clash with prediction platforms over regulations, making for a fascinating look at a rapidly changing industry.
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Rapid Growth Of Online Sports Betting
- Online sports betting surged after the 2018 Supreme Court decision and now exceeds $100 billion in annual wagers in the U.S..
- Sportsbooks typically retain only about 10–15% of wagers, so gross handle overstates operator revenue.
Prediction Markets Are Exchanges, Not Books
- Prediction markets operate under federal oversight (CFTC) and function as exchanges where users trade outcomes rather than bet against a sportsbook.
- That structure shifts counterparties from the house to other traders or market makers, changing who takes risk.
Legal Framing Vs. Practical Reality
- Despite regulatory framing, the activity on prediction markets is still effectively sports betting in practice.
- The legal distinction matters for oversight, but the underlying consumer experience remains wagering on outcomes.