Bernstein analysts project that the prediction market sector will reach $1 trillion in annual volume by 2030, driven by regulatory clarity and new distribution partnerships.
In a Tuesday note to clients, the research and brokerage firm highlighted a massive expansion from the $51 billion in volume recorded during 2025. The analysts, led by Gautam Chhugani, expect the industry to maintain an 80% compound annual growth rate through the end of the decade.
While sports contracts currently represent 62% of all prediction market volumes, Bernstein expects this share to drop to roughly 31% by 2030. The firm suggests that the industry will pivot toward broader economic, political, and macro-level contracts.
"Sports is the entry point, not the endgame," the analysts stated.
Expansion into institutional markets
The report identifies a shift toward institutional participation as a primary growth driver. Analysts expect a new market to develop around business and economic contracts as investors seek direct exposure to specific global events.
Corporate and insurance firms may also drive demand by using these markets to hedge against specific event risks. This expansion coincides with increasing federal regulatory clarity, which Bernstein says is expanding the addressable market.
Despite recent scrutiny of sports-related contracts at the state level, the CFTC has asserted it holds exclusive jurisdiction over prediction markets. The firm is currently working to establish formal rules as the industry scales.
Blockchain-based tokenization and integration with crypto markets are also facilitating global liquidity and institutional participation. This technological shift allows for the creation of long-tail events and broader access to the market.
Major players like Kalshi and Polymarket have already processed a combined $60 billion in volume this year. Bernstein expects this figure to climb to $240 billion in 2026.
Revenue is also expected to climb significantly. The analysts project annual recurring revenue (ARR) will grow from $400 million in 2025 to approximately $2.5 billion in 2026.
As an example of shifting monetization strategies, Bernstein noted that Polymarket recently transitioned away from its zero-fee model and is now operating at an ARR of $420 million.
