Citizens: Prediction markets will potentially break the billion-dollar mark in annual revenue by 2030

According to Bloomberg, Citizens Financial Group Inc. analyst team’s latest forecast predicts that the market industry is expected to experience explosive growth in the coming years. By 2030, the forecasted annual revenue of market companies is expected to increase approximately fivefold, surpassing $10 billion, becoming an important new track in the fields of finance and crypto derivatives.

Currently, prediction market platforms, including Kalshi and Polymarket, are attracting market attention due to a significant increase in trading volume of event contracts. These contracts provide a compliant and regulated way to bet on sports, political, and cultural events, attracting a large number of retail and institutional participants. Citizens estimates that the current annual revenue of this industry is about $2 billion, but its growth potential remains largely untapped.

Citizens analyst Devin Ryan pointed out that prediction market products have become one of the fastest-growing businesses in the company’s history within Kalshi contracts offered by Robinhood Markets, currently contributing about 10% of total revenue. This performance reinforces analysts’ long-term outlook for the industry.

The report believes that the key drivers for further expansion of prediction markets in the future will come from hedge funds and other institutional investors. These institutions are using prediction markets to bet on and hedge against changes in central bank policies, M&A events, and macroeconomic uncertainties. Analysts compare this trend to the early adoption phase of options markets, believing that low penetration has laid the foundation for several times growth in the future.

Additionally, prediction markets in some states can bypass traditional gambling restrictions, providing legal trading channels for sports events, which also allows them to tap into the approximately $100 billion legal betting market worldwide. As sports betting companies launch similar event contracts, competition is intensifying.

Citizens also emphasizes that the true value of prediction markets lies not only in sports but also in their binary pricing capabilities for economic and corporate events. These markets can quickly generate contracts, offering investors high-precision opinion expression and risk hedging tools. The odds and signals generated may, in the future, be integrated into institutional quantitative models and asset allocation systems, similar to credit spreads, options skew, and implied volatility.

Recently, Intercontinental Exchange plans to invest up to $2 billion in Polymarket, and CME Group has partnered with FanDuel to launch new trading applications, indicating that traditional financial institutions are accelerating their布局. Despite regulatory uncertainties, Citizens believes that the development experience of crypto markets and options markets provides a compliant path for prediction markets.