College Students, Teens Behind Prediction Market Boom
An analyst from US financial services firm Truist has claimed that bettors between the ages of 18 and 20 could be “contributing significantly” to the growth of prediction markets.
Youth Could Be Fueling Prediction Market Surge
Prediction markets are platforms where individuals can buy and sell contracts based on the outcomes of future events, including politics, pop culture, economics, and sports events.
Truist Managing Director Barry Jonas made the claim earlier this week that bettors too young to place wagers through legal sportsbooks are turning to prediction market operators such as Kalshi and Polymarket, which both allow users as young as 18 to open accounts.
Jonas cited data from HoldCrunch, founded by a former FanDuel executive, showing that Kalshi is taking more trades on college football than on NFL and NBA, per CNBC Correspondent Contessa Brewer.
Brewer noted that while non-college students could still bet on college results, the trend could offer some insight into the demographics of prediction platform users.
Kalshi’s College Football Handle Tops NFL, NBA
HoldCrunch data revealed that as of Jan. 4, Kalshi’s college football handle “hit its highest percentage of total at 32 percent,” compared to the NFL and NBA representing just 24 percent and 22 percent, respectively, of total wagers.
According to sports wagering tracking app Juice Reel, gamblers of all ages are likely resorting to prediction market platforms because they can’t bet big at licensed sportsbooks.
“Some of the biggest and best bettors are going to prediction markets because they’re limited to smaller bets by the sportsbooks,” Juice Reel founder and CEO Ricky Gold told CNBC.
Jonas agreed with the assessment, stating that prediction markets “amplify bettor skill and variance.” He noted that sites like Kalshi and Polymarket “show substantially larger downside for low-wallet users and substantially higher upside for high-wallet users.”
Earlier this week, NCAA President Charlie Baker wrote to the Commodities and Futures Trading Commission (CFTC), which regulates prediction markets, asking the agency to remove college sports from options to trade until more safeguards have been implemented.
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