A new study revealed that the rise of prediction markets directly influenced sports bettors to spend less money on wagering.
The research, led by behavioral analytics company Fullstory, provided a snapshot of the changing landscape in the gambling and prediction industries. Results noted that up to 60% of bettors experienced a change in their betting attitudes after they learned of and became more familiar with event contracts offered by prediction markets.
Sports betting losing to prediction markets
Sports betting was an immediate success once it was federally legalized in 2018. 39 states and Washington D.C. have legalized markets since the repealing of the PAPSA decision opened the door to wagering aside from a few select locations.
This industry remained relatively unchallenged until the recent rise of prediction markets — specifically, sports event contracts offered by platforms such as Kalshi, Polymarket and crypto.com that allow traders to win money if they correctly forecast the outcome of sports games, matches, and actions, all the way down to words or phrases said by the color commentator.
“Consumers are being presented with more options for how they can participate in online gaming, creating a more competitive landscape where a seamless digital experience is increasingly becoming part of the value proposition,” said Jason Wolf, president of Fullstory, in a statement.
The increase in choices has bred several noticeable changes in consumer behavior.
77% of respondents in Fullstory’s 2026 Gambling & Gaming Survey said that they switched gaming platforms because of the user experience. 44% said the decision came down to ease of use.
60% claimed that the frequency with which they used sportsbooks was influenced by the rise of prediction markets, with 35% saying they now bet on sportsbooks less often. That’s despite previous studies that highlighted how customers preferred the narrow focus of sportsbooks as opposed to the all-encompassing nature of prediction markets, which offer political, pop culture, financial, and other markets in addition to sports.
Sportsbooks take on prediction markets
The survey data tells a clear story: prediction markets have caused bettors to become less interested in sportsbooks.
But perhaps even more importantly, the survey shone light on the attitudes of bettors and traders alike.
53% of respondents said that they always compared prediction markets or online gaming platforms before they placed a bet. This practice, known as line-shopping, was previously restricted to finding the best betting odds across available sportsbooks.
However, because prediction markets do not impose house-made vigs and have traders compete in a peer-to-peer format, these platforms often offer users more bang for their buck than sportsbooks.
The consistent comparison between sportsbooks and prediction markets also illustrates how they are viewed by consumers in a time when prediction operators are being overwhelmed by legal battles. 62% of prediction market users in the survey said that they bought and sold sports event contracts, the highest of any industry. Financial (42%), political (41%), and entertainment (26%) markets were next in order of popularity.
Many state regulators and officials have spent 2026 mounting legal challenges in an attempt to limit prediction platforms’ operational authority without state licensing. Platforms were largely successful in court up until recent months, when a series of results either limited operators’ power or prevented them from acquiring injunctions against state officials.
The Trade Handle Prediction Markets Take
It was evident that prediction markets were giving previously unseen competition to sports betting operators. Seeing the real-time trends supported by survey results adds a new layer of data to the discussions during a pivotal time of year for sportsbooks, football season. It will also be interesting to monitor how sportsbooks respond to the rise of prediction markets, as their current response plan has mostly been to create prediction markets of their own.