Retail Traders Post Steeper Losses on Prediction Markets

TLDR

• Retail traders recorded deeper losses on prediction markets than on regulated sportsbooks during the review period.
• Citizens JMP reported that the median return on prediction markets stood at minus 8%.
• Sportsbook users posted a median return of minus 5 percent over the same timeframe.
• Traders who wagered more than $500000 on prediction markets achieved a median return of plus 2.6 percent.
• Smaller prediction market accounts faced losses that reached minus 26.8 percent for users under $100.

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Retail traders are losing more money on event-driven trading platforms than on regulated sportsbooks, according to new transaction data. Citizens JMP Securities reported that smaller accounts on these platforms posted steeper losses than comparable sports bettors. The firm also found that younger users are entering these markets at higher rates than traditional betting apps.

Retail Losses Deepen on Prediction Markets

Citizens JMP Securities analyzed transaction data from Juice Reel covering July 2025 through mid-March 2026. The firm found that the median return for a retail user on prediction markets reached -8% during that period. In contrast, sportsbook users recorded a median return of -5% over the same stretch.

Jordan Bender, an analyst at Citizens JMP, wrote that larger traders achieved better outcomes. He stated that users trading more than $500,000 generated a median return of +2.6%. However, every cohort below that threshold posted negative results, and users trading under $100 recorded -26.8%.

The report compared those figures with legal sports betting accounts during the same timeframe. It found that no sportsbook cohort achieved profitability either. However, the $500,000-plus sportsbook group posted -0.6%, while the smallest accounts showed -29.3%.

Bender attributed the divergence to market structure and participant composition. He wrote that prediction markets expose retail traders directly to professional bettors and market makers. By contrast, sportsbooks manage risk internally and limit consistent winners.

Two professional bettors spoke during a Citizens JMP call last week. They said prediction markets offer a clearer path to positive returns because retail traders provide liquidity. The research note stated that professionals consistently take the other side of less-informed order flow.

Online Gambling Executives Downplay Competitive Risk

Gaming executives addressed the rise of event-driven trading during fourth-quarter 2025 earnings calls. Citizens JMP compiled those remarks in its report. Executives largely rejected the idea that these platforms threaten core sportsbook revenue.

DraftKings Chief Executive Jason Robins said prediction markets are not materially incremental to existing customers. Flutter Chief Executive Peter Jackson reported no evidence of material cannibalization. BetMGM Chief Executive Adam Greenblat estimated a low-to-mid-single-digit percentage impact on betting revenue.

Citizens JMP estimated the revenue impact at around 5% based on available data. The firm argued that customer overlap appears limited at this stage. However, the report identified user acquisition trends as a developing factor.

Sensor Tower data cited in the report showed that 24% of Kalshi users are under 25. The median age on Kalshi stands at 31, while DraftKings and FanDuel report a median age near 35. The report added that about 90% of DraftKings revenue comes from users over 30.

Download trends also diverged during the review period. FanDuel downloads fell 18% year over year, and DraftKings declined 13% from September 2025 through February 2026. Over the same period, Kalshi recorded 6.3 million downloads, according to Sensor Tower data cited in the report.

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