Retail traders fare worse on prediction markets than sportsbooks

A new report from Citizens JMP says median losses are deeper on prediction platforms as retail traders face sharper, better-capitalized counterparties What to know : Retail users on prediction markets are losing more than legal sports bettors, with a median return of -8% since mid-2025 versus -5% on sportsbooks, while only the highest-volume prediction market traders are consistently profitable. Because prediction markets do not limit winning players, retail traders are more directly exposed to professionals and market makers. While gaming executives say prediction markets are not materially cannibalizing existing sportsbook revenue, platforms like Kalshi are attracting a younger user base and strong download growth, potentially capturing the next generation of bettors before they ever sign up for DraftKings or FanDuel.