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NFL Bets Dominate Prediction Markets
19 Oct
Summary
- NFL-related contracts constituted 59% of trading volume by October 11.
- Prediction market volume surged by 62% between September 13 and October 11.
- Sports betting firms see stock declines amid prediction market growth.
Prediction markets are experiencing a dramatic surge in activity, largely driven by NFL-related trading. By October 11, NFL contracts represented 59% of the notional volume across major exchanges like Kalshi and Polymarket US. This surge contributed to a 62% increase in combined notional volume from September 13 to October 11.
This explosive growth contrasts sharply with the performance of traditional sportsbooks. DraftKings and Flutter, parent company of FanDuel, have seen their stock prices decline significantly. Both companies are now venturing into the prediction market space with their own offerings, placing them in a competitive position against their own traditional betting operations.
The Commodity Futures Trading Commission (CFTC) regulates these markets, but a legal battle is ongoing regarding whether state gambling laws apply. Kalshi asserts federal authority, while some states argue these markets constitute sports betting. The NFL's involvement in a Supreme Court brief supports New Jersey regulators in this dispute.
Polymarket prefers tracking taker volume as a measure of activity, which also shows a substantial NFL presence, though smaller than notional volume. The fastest-growing category within NFL trading involves combination bets, similar to parlay bets, which experts warn can encourage chasing losses. This trend highlights a fundamental question: whether prediction markets can sustain their growth without sports content.
