Prediction market volume grew, but sports betting rose faster

The trading volume of regulated prediction markets rose 64 percent month over month in September to 77 billion dollars. However, according to a Stifel report, sports betting companies are maintaining their lead over yes/no exchanges.

Analyst Jeffrey Stantial compared the taker volume generated by retail investors with the sports betting handle. At the two largest US prediction markets, taker volume was 23 percent of notional volume. Extended across the sector, September taker volume is estimated at 17.7 billion dollars, with growth of 27 percent. In the states that have reported September data, regulated sports betting handle rose 43 percent.

Stantial sees the fact that growth remained moderate despite the start of the football season as a possible source of concern for prediction markets. He notes that, despite investments in product development and aggressive user acquisition, the markets may reach saturation faster.

The volume of single sports trades under CFTC regulation rose 23 percent to 22.8 billion dollars. Parlays, meanwhile, rose 122 percent to 41.6 billion dollars. Notional volume on DraftKings' DKeX platform rose 2 percent. Novig reached a 1.9 percent market share after its advertising campaign featuring Sydney Sweeney. Rothera, co-owned by Robinhood Markets and Susquehanna International Group, did not gain meaningful share.