Prediction markets are emerging as one of fintech’s fastest-growing revenue streams, according to new analysis from Citizens Financial Group, cited in a Bloomberg report.
Platforms that allow users to trade on the probability of real-world events are seeing sharp increases in activity, drawing attention from retail traders, institutions, and major brokerage apps.
Citizens estimates that the sector is still relatively small today, but structural factors such as regulation, product design, and expanding use cases are setting the stage for rapid scaling.
The firm argues that prediction markets are moving beyond novelty status and into the core of digital trading ecosystems.
Revenue growth accelerates
Citizens analysts estimate that prediction market companies are currently generating around $2 billion in annual revenue.
By 2030, that figure could rise by more than five times to above $10 billion.
The forecast reflects growing participation across multiple categories, including sports, politics, culture, and financial events.
The analysts view this growth as driven by both higher trading volumes and wider adoption.
Event contracts allow participants to take positions on specific outcomes rather than broad price movements, making them accessible to a broader range of users.
Citizen sees this format as particularly well-suited to digital platforms seeking new revenue streams beyond equities and crypto.
Platforms see rapid adoption
Companies such as Kalshi and Polymarket have recorded soaring volumes on their event contracts in recent months.
These platforms offer regulated access to prediction markets, helping to legitimise the sector and attract new users.
Robinhood Markets has played a key role in accelerating adoption. Citizens estimates that trading on Kalshi contracts within Robinhood has become the fastest-scaling product in the company’s history.
The analysts believe this activity already accounts for around 10% of Robinhood’s total revenue, underlining how quickly prediction markets can become financially meaningful for established fintech firms.
Institutional participation expands
Citizens expect future growth to be increasingly driven by institutional players.
Hedge funds and other professional investors are starting to utilise prediction markets to gauge probabilities surrounding central bank decisions and mergers and acquisitions.
The analysts compare this stage of development to the early adoption of options trading.
Initial penetration was limited, but transaction values expanded rapidly as familiarity and confidence grew.
Citizens argues that a similar pattern could unfold in prediction markets as more capital enters the space and use cases broaden.
Sports betting opportunity
Sports-related contracts have been a major contributor to current volumes.
Prediction markets have enabled sports betting activity even in US states where traditional gambling is not legal, which Citizens says accounts for a majority of Kalshi’s business so far, notes Bloomberg.
This regulatory dynamic represents a significant commercial opportunity. Citizens estimates that legal gambling is a $100 billion global market.
As a result, established sports gambling companies have started moving into event contracts to compete with prediction market platforms, signalling intensifying competition as the sector grows.
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