Few prediction market users are 50 or older, Truist analyst says
Just 7% of prediction-market users are older than 49. That was one of myriad findings reported by Truist Securities analyst Barry Jonas in a 17 March investor note.
Although prediction markets skewed younger in their appeal, 5% of customers surveyed were 21 or younger. The largest bettor cohort was in the 30-39 age range, representing 36% of players. The 22-29 age range has 22% and 31% of punters were in their 40s.
Nineteen percent of players did not have a college education, with 26% holding graduate degrees. The affected income bracket skewed middle-class, with 37% of bettors making US$50,000 to US$100,000 a year. Those making more than US$250,000 largely did not play: just 3%. Thirty percent of respondents made between US$100,000 and US$150,000 a year.
As expected by Jonas, the bulk of players were bunched in states where traditional online sports betting is illegal. California led with 16%, followed by Texas with 9% and New York with 9%.
There was a 74% overlap between prediction-market players and OSB/daily-fantasy ones; 42% traded other options or futures contracts.
Some 18% “did say that they view PMs as speculative gambling with an intellectual veneer,” Jonas wrote. An additional 20% looked upon event contracts as legitimate investment vehicles.
Use equated to frequency, with 21% wagering daily and an additional 29% doing it multiple times per week. Nineteen percent of users bet weekly and 8% monthly.
Sports was the favorite betting subject: 76%. It led economic indicators (53%), election results (47%) and corporate developments (44%). Weather was a favored betting subject of 39% of respondents.
NFL football dominated sports betting with 83% dabbling in such wagers, while 50% also bet on college football and basketball. The NBA was highly popular (81% prevalence), while baseball drew 59% and professional hockey lured 47%.
The most popular size of wager was between US$51 and US$100, favored by 26%, although 25% of users bought contracts between US$101 and US$250, and an additional 22% were comparative whales, optioning contracts as large as US$999 apiece. Five percent routinely wagered US$1,000 or more on event contracts. Only 21% stayed below US$50 a contract.
The prediction app of choice was legacy operator Kalshi (58%), followed by upstart DraftKings Predictions (46%) and FanDuel Predicts (44%). Users also dabbled in Polymarket and Robinhood (34% each), and in Coinbase (23%).
There was considerable overlap with traditional OSB providers. Respondents also had placed wagers with DraftKings (68%), FanDuel (60%), BetMGM (38%) and Caesars Sportsbook (22%). Eleven percent admitted to using unlicensed Bovada while 8% used illegal bookies.
While Jonas avoided reaching any conclusions in the OSB/prediction market battle, he said Kalshi was the clear favorite but that DraftKings and FanDuel “show promise” in their event-contract offerings. He added that “what is clear is that for the most part PM users enjoy and frequently trade on these platforms.”
Those users tended to win more if they were larger bettors, Jonas found. But most “users believe they’re ahead.”
Competitive edges of prediction markets, at least for the moment, were said to be platform attributes and the availability of non-sports wagers. However, the danger of insider trading was a pronounced worry and many punters said they would opt for traditional OSB were it to be legalized in their market.
“Bottom line, while the courts may very well change the calculus here at some point, we think the survey validates why OSB operators are focusing on this new market opportunity; and at a bare minimum OSB operators can boost their databases ahead of potential state OSB legalization down the road,” Jonas concluded.
The Truist poll used a 446-customer sample, selected from the database of Survey Monkey.
David McKee is an award-winning journalist who has three decades of experience covering the gaming industry.
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The Backstory
A younger, frequent-trading user base sets the stage
Prediction markets have built a core audience that skews younger, trades often and sits largely outside states with legal online sports betting. That profile helps explain why the space has pulled in capital, headlines and scrutiny in recent months. As operators weigh how to meet demand for non-sports wagers and tap new customers, they are also managing rising state taxes and regulatory uncertainty that change the economics of growth. The through line: digital betting companies are positioning prediction markets as both a hedge against policy shifts and a beachhead in states where sports betting remains off-limits.
Tax pressure nudges incumbents to diversify
The most immediate catalyst has been tax policy. In New Jersey, Gov. Phil Murphy and lawmakers reached a compromise to lift levies on online sports betting and igaming to what analysts expect will land at 19.75%. Truist’s Barry Jonas characterized the move as operator-manageable, arguing that companies could blunt the impact by trimming promotions rather than passing costs to customers. He estimated the full-year effect at $67 million for Flutter and $56 million for DraftKings, with lesser hits to BetMGM, Caesars and Penn, and noted those figures sit against robust cash flows. Read the analysis of the Garden State tax increase and likely operator responses.
The New Jersey deal followed hikes or proposals in Illinois, Maryland and Louisiana, part of a broader shift that tightens margins. While Jonas downplayed the need for sweeping mitigation beyond promotion cuts, higher taxes make adjacent products more attractive, particularly if they can be offered under different regulatory regimes or in new geographies. That is where event contracts come in.
Flutter’s CME tie-up signals a methodical entry
Flutter moved first among leaders with a plan to partner with CME to offer federally regulated derivatives tied initially to market, commodity and currency closes, pending Commodity Futures Trading Commission approval. Sports products were not part of the initial slate, but analysts view the move as laying the compliance and technology groundwork for future sports-related contracts if regulators and partners align. Truist’s Jonas called the step “predictable,” noting the appeal of an enticing market as sports betting taxes rise and upstarts like Kalshi encroach. He cautioned that regulated operators must avoid alienating state partners while federal views remain fluid with political change.
Jefferies’ James Wheatcroft echoed the strategic logic, arguing the CME partnership gives FanDuel an infrastructure edge to move quickly when opportunities arise. The broader takeaway: federated distribution, brand equity and compliance footprints could let incumbents outflank smaller venues if rules evolve. For details on the partnership and analyst read-throughs, see Flutter’s move into prediction markets with CME.
Volatility whipsaws stocks as courts weigh in
Investor sentiment has seesawed with each new product reveal. When Kalshi pushed deeper into sports-style offerings, DraftKings shares fell 18% and Flutter 11% in a single week, reflecting fears that tax‑advantaged rivals could siphon customers or compress margins. J.P. Morgan’s Daniel Politzer argued that reaction was overdone, saying the Street needs clarity on where regulators draw the line between sports betting and federally regulated event contracts. He also pointed to a legal marker: a federal judge in Nevada denied Crypto.com a preliminary injunction that would have forced regulators to allow event contracts, ruling sports-event contracts are not derivative swaps.
Politzer’s base case is that prediction markets face scaling hurdles in replicating same-game parlays at the size, liquidity and risk tolerance seen in online sports betting. Still, he warned that in large states like Texas and California, first movers could entrench ahead of sports-betting legalization. His broader take on the selloff and legal contours is captured in why fears around prediction markets may be overhyped.
Why some investors are staying the course
Even as volumes at prediction platforms spike around marquee events, some analysts see little immediate threat to the incumbents’ economics. Jefferies’ David Katz reiterated a Buy on DraftKings after a sharp pullback, arguing that prediction markets’ fee structures, product depth and in-play capabilities trail those of established sportsbooks. He noted that Kalshi’s widely cited weekend handle, while impressive, translates to a fraction of DraftKings’ weekly state-level handle once differences in take rates and product scope are normalized. Early same-game parlay experiments on prediction venues were also narrower and likely supported by outside market makers, limiting comparability with sportsbook products that drive higher margin.
Katz emphasized ongoing operating momentum, including double‑digit gains in New York handle and nationwide gross gaming revenue, plus a growing igaming contribution. His case for resilience and near-term upside is laid out in Jefferies’ defense of DraftKings despite the dip.
Igaming tailwinds and the road ahead
Beyond prediction contracts, the online sector is benefiting from strong hold and accelerating igaming growth that could offset tax pressures. Macquarie’s Chad Beynon reported igaming stocks outpacing the S&P 500, with sector performance aided by elevated June hold and second-quarter gains. He expects online gross gaming revenue to rise 25% this year, powered by higher structural hold, faster in‑play adoption and continued state expansion across sports and igaming. That backdrop helps explain why operators can absorb tax increases while still exploring adjacent, federally governed products that expand the addressable market without cannibalizing core sportsbook economics.
Beynon’s outlook also underscores a strategic fork. For states tightening tax screws, operators will dial back promotions and lean into higher-margin products. For states where sports betting is still illegal, prediction markets provide a legal on‑ramp to acquire users and build databases ahead of eventual legalization. The balance of risk and opportunity across those tracks is shaping capital allocation and product roadmaps. For the sector view and pacing, see Macquarie’s call that igaming will outperform this year.
The bottom line
A younger, active prediction‑market user base intersects with higher state taxes and evolving federal oversight to create both pressure and option value for the biggest U.S. sportsbook operators. Expect a dual strategy: protect the core with product and pricing discipline while using federally regulated event contracts to test demand, extend brands into non‑OSB states and prepare for a potential rules reset. The winners will be those that can navigate regulators, leverage scale for liquidity and keep product quality a step ahead of the fast followers.
