Prediction Markets Revenue Could Surge 5x by 2030, Says Analyst
Posted on: December 15, 2025, 08:00h.
Last updated on: December 14, 2025, 10:00h.
- Citizens analyst sees path to $10 billion-plus revenue opportunity by 2030.
- Says event contracts have clear uses for institutional investors.
- Event contracts quash inefficiencies previously associated with trading “discrete events” such as economic data releases.
Prediction markets are already flirting with $2 billion run-rate based on per transaction fees and that figure could swell to $10 billion by 2030.
That forecast arrives courtesy of a team of Citizens analysts led by Devin Ryan who estimate that approximately $400 million of that $2 billion is generate by Robinhood Markets (NASDAQ: HOOD), making yes/no contracts the brokerage firm’s fastest-growing business line to date. The research firm points out that monthly prediction market volume is around $10 billion — scant compared to the $10 trillion average generated by domestic equities — but the growth catalysts are there.
As volumes compound and spreads compress, the fee model remains attractive given near-zero marginal listing/settlement costs,” notes Ryan. “Looking ahead, the event-sensitive exposure base exceeds $500 trillion, and even applying conservative early penetration implies hundreds of billions in notional and a path to a $10 billion-plus annual revenue opportunity over five years as markets scale toward trillions of contracts.”
If accurate, those projections would likely go a long way toward validating the 11-figure valuations assigned to Kalshi and Polymarket – multiples that have been the source of some criticism.
Institutional Use Cases Pave Way for Prediction Markets Growth
Much of prediction markets’ ascent is attributable to the exchanges offering a different spin on sports betting and operating in states where that form of wagering is limited or not permitted. However, yes/no contracts offer utility to institutional market participants, indicating those investors will be drivers of prediction markets liquidity and revenue growth.
Be it exchange traded funds, options, swaps or other derivatives, professional traders have long derivatives as hedges, but related choices around deal-making, geopolitical headlines, and other discrete events have been limited. Prediction markets solve that issue.
“Event-driven hedge funds can isolate deal, litigation, and regulatory outcomes without embedding beta or duration; macro funds can hedge inflation prints, policy decisions, and geopolitical catalysts directly; quant firms can treat probability curves as high-signal inputs; and corporates can use markets for timing capital raises, planning, and investor-relations signaling,” adds the Citizens team.
Beyond hedge funds, quantitative and systematic trading houses could embrace prediction markets at scale as could corporations looking to hedge around events such as litigation, mergers and acquisitions, and regulatory news.
‘Foundational Phase’
The aforementioned talk of institutional use cases and total addressable market is pertinent because, as Citizens points out, prediction markets today are largely the territory of retail market participants. Even with that, the industry is growing at a clip “rarely seen in new financial products.”
The research firm estimates that in November, Kalshi and Polymarket — the two prediction market leaders — processed $10 billion in notional volume across 15 billion to 20 billion combined contracts. In October and November, Robinhood handled 5.5 billion event contracts.
History also bodes well for adoption of prediction markets, particularly among professional traders. As Citizens notes, when equity options debuted 52 years ago, those derivatives hit about five basis points of the underlying market capitalization and the same was true of credit default swaps (CDS) and interest rate swaps.
“We believe these ranges reflect the natural frictions of institutional onboarding considering documentation, risk models, capital-treatment interpretation, liquidity maturation, and operational readiness,” concludes the research firm. “That said, applying a similar early-adoption ratio to the $500 trillion+ event-exposed universe yields a conservative early institutional opportunity of ~$250 billion-$500 billion.”
Last Comments ( 1 )
And I suppose it will only be AI bots that are doing this trading/gambling, since nearly every human will be out of a job and with no social safety net. Thanks, Trump.