Citizens: Prediction markets annual revenue could reach $10bn by 2030
Summary
Citizens’ new report finds prediction markets shifting from retail speculation towards institutional adoption, estimating current revenues near a $2bn run rate and projecting that annual revenue could exceed $10bn by 2030 as institutional capital flows in. Monthly trading volumes are around $10bn across leading venues such as Kalshi and Polymarket, and the competitive landscape now includes regulated exchanges, brokerages, digital-asset platforms and traditional sports-betting operators. The report highlights use cases for event-driven hedge funds, macro and quant strategies, and positions prediction contracts as cleaner hedges that reduce basis risk. Key constraints include regulatory uncertainty, liquidity fragmentation, insider-information concerns and outcome ambiguity.
Key Points
- Citizens estimates prediction markets are near a $2bn annual run rate today, with monthly volumes about $10bn across top venues.
- The firm projects a potential rise to more than $10bn in annual revenue by 2030 if institutional capital enters the market at scale.
- Prediction contracts can offer cleaner hedges (eg. regulatory decisions, merger outcomes, inflation prints) by reducing basis risk compared with traditional instruments.
- The market’s competitive set has broadened to include regulated exchanges, brokerages, digital-asset exchanges and sports-betting operators; Robinhood’s MIAX deal is cited as a milestone.
- Emerging institutional use cases include event-driven hedge funds, macro hedging, and quant models using probability curves as signals.
- Major challenges remain: regulatory uncertainty (US federal vs state issues), liquidity fragmentation, insider information risk and ambiguous outcomes.
- Retail activity (sports and entertainment) currently supplies much liquidity, but non-sports macro and corporate markets are expected to grow faster as institutions join.
Context and relevance
The report places prediction markets on a developmental arc similar to options, ETFs and swaps: early retail interest, then market-makers, regulatory formalisation and institutional integration. If the Citizens thesis holds, prediction markets could deepen hedging capacity across markets rather than simply cannibalise existing derivative volumes; they may also provide new informational signals that affect asset pricing. For risk managers, traders and iGaming operators, the evolution signals possible new products, hedging approaches and regulatory touchpoints to watch.
Why should I read this?
Short and sharp — this shows a niche betting format is starting to look like an actual financial tool. If you work in trading, risk, iGaming or financial product development, it’s worth five minutes: the report flags where money and regulation might head next and what that could mean for hedging and new markets.
Author note
Punchy take: Citizens argues prediction markets could become a mainstream part of market structure. Devin Ryan’s quote that precise expression of views boosts market efficiency underpins the claim — so if institutions can get comfortable with rules and liquidity, growth is plausible. We’ve saved you the read and pulled the bits that matter.
Source
Source: https://next.io/news/betting/prediction-markets-10bn-annual-revenue-citizens/