Stifel: Prediction Market Taker Volume Trails Sportsbook Growth in September

Volume on regulated prediction markets jumped 64% month-over-month to $77 billion in September, but there are signs that sportsbooks are getting the better of their yes/no exchange rivals.

In a recent note, Stifel analyst Jeffrey Stantial highlights the divergence between prediction market taker volume—turnover generated by retail traders, many of whom overlap with sports bettors—and traditional sportsbook handle, noting that sports betting growth far outpaced event contract activity in September. Taker volume is widely considered a more direct equivalent to traditional sportsbook handle than raw notional volume.

According to Stantial, September taker volume on all-or-nothing exchanges regulated by the Commodity Futures Trading Commission (CFTC) accounted for roughly 23% of total notional turnover across the top two U.S. prediction markets. Extrapolating that ratio across the broader industry suggests monthly taker volume reached approximately $17.7 billion, representing 27% growth.

However, data from reporting states indicates that regulated U.S. sportsbook handle surged 43% month-over-month in September, significantly outpacing prediction market gains.

Why It Matters

Modest taker volume growth during the launch of the NFL season could signal headwinds for prediction platforms.

The September gap reinforces a broader trend: when given a direct choice, mainstream sports bettors continue to favor traditional sportsbooks, suggesting yes/no event contract platforms have yet to capture material market share from established operators—even though sports remain the primary driver of prediction market volume.

“CFTC-regulated single-wager sports-only volumes grew +23% month-over-month in September to $22.8 billion, though volume on ‘combos’ (parlays), which are effectively all sports, were up +122% to $41.6 billion,” adds Stantial.

Disruptors Face Uphill Battle

Volume on domestic prediction markets is largely centralized on two platforms, but some “disruptors,” or Tier-2 (T2) operators, are seen as viable competitors.

But that wasn’t the case last month as most of the T2 operators, including Rothera, which is jointly owned by Robinhood Markets (NASDAQ: HOOD) and Susquehanna International Group, struggled to gain noticeable market share.

Among the T2 market share gainers in September, DraftKings’ (NASDAQ: DKNG) DKeX saw notional volume increase 2% while “Novig also gained slight share following the controversial Sydney Sweeney ad campaign reaching 1.9% share in September,” said Stantial in the report.

Data confirm that following the first Sweeney commercial in September, downloads of the Novig mobile application and first-time depositors on the platform surged.