Possible Future for Prediction Markets Presented in EKG Analysis

An industry analysis on changes in the US prediction market was submitted by Eilers and Krejcik Gaming (EKG).

In their report, they describe how prediction markets are becoming a large-scale tool for trading.

Prediction markets are designed to reach the entire nation from the get-go.

Sportsbooks, on the other hand, need a licence from every state they wish to operate in and are subject to taxation.

The structure of the prediction market platforms is to expand by promoting themselves online.

Prediction markets can also insert themselves into different platforms that already have a built-up audience with less difficulty.

EKG believes that owing to this model, finance, media, technology, and cultural participation have converged.

A different perspective on how prediction markets can be seen as more than just regular gambling, as they do operate quite differently, has been offered through the analysis, and they are already on track to hit impressive revenue figures by one estimate.

In the report, it is highlighted that these prediction markets are not monoliths.

On the subject of different types of prediction markets, the analysts had this to say:

“Sports markets come immediately to mind, but are not the only category of markets that may end up as an outlier in some way, shape, or form.”

Eilers and Krejcik Gaming

According to Eilers and Krejcik Gaming (EKG), the current largest category of these markets is sports.

Many activities and real-world events could be integrated into prediction market platforms; these are financial markets, politics, news-driven events, crypto-linked benchmarks, cultural outcomes, and more.

Trading Volume Makes It Worthwhile

The report predicts that if prediction markets can grow, their collective annual trading income will exceed $1 trillion.

They estimate that sports, despite their popularity, won’t even reach half that much.

EKG predicts that 44% of that trillion will be the value brought to markets not related to sports.

Estimates by EKG show that pure play markets will have around a 25-45% increase in steady-state EBITDA margins.

This is due to less spending being required, as well as the lack of taxation being necessary for prediction markets.

EKG highlights that neither older gambling establishments nor state policymakers is the cause of the standardization of prediction markets.

Instead, it seems to be owing to powerful political figures, large fintech platforms, and venture capital firms.

Legitimacy with prediction markets doesn’t come from regulatory approval but instead from several other factors, such as distribution, institutional backing, and cultural visibility.

Names such as President Trump and members of his family, as well as Coinbase, Kalshi, and Gemini, are referenced in the report as being factors in the widespread awareness, as well as standardization, that prediction markets have gone through this year.

Legalization Is Carrying On

Prediction markets have always faced an uncertain future, as court decisions could force a change in course.

EKG believes that if a Democratic administration attempts to undo the progress prediction markets have made, it will be faced with many difficulties.

The analyst for EKG speaks on how, before taking any actions against prediction markets, the Democratic Party would have to think about the possible response of the crypto lobby.

The EKG report speculates that the services offered by markets might one day become like those that are offered in casinos.