INDUSTRY INSIDER: MARK MCGUINNESS
states comes from professional betting syndicates and institutional traders, not from mainstream sportsbook customers. Robins offered that as reassurance. Prediction markets, he was telling investors, are not stealing our players. Read it the other way and it is an alarm. If nine in ten dollars are professional money, and only one in a hundred mainstream bettors has crossed over, the recreational base is simply not there. The tell is in the tape. On exchanges that lost their retail distribution, sports volume has kept trading in exact multiples of a thousand dollars, a signature no casual bettor leaves. That pattern is not a crowd at all, but a handful of desks and machines trading with one another.
If nine in ten dollars are professional money, the recreational base is simply not there
THE POKER PARALLEL The question is already the elephant in the room. It surfaces in conference bars, on panels and across the industry’s feeds, usually phrased the same way. How can the ecosystem survive when so many retail traders, gamblers by another name, consistently lose? Is it analogous to online poker?
The answer to that last question is yes, and it should worry the sector. Online poker did not thin from regulation alone. It thinned because the recreational players, the fish who funded the whole table, were beaten too efficiently by professionals and bots, felt the
cost, and left. The rake stayed while the fun drained away, and liquidity followed the fun out of the door.
The behavioural economics compounds the problem. Prediction markets sell a flattering identity, the retail trader rather than the punter, and to a young man in an unregulated state that persona is seductive. The reckoning arrives later, when he checks the bank balance and decides the costume was not worth the cost. Identity brings people to the table, and arithmetic sends them home. The evidence says prediction markets are on the same road, faster. Research compiled by the Roosevelt Institute estimates ordinary users have lost around 583 million dollars on Kalshi since 2021, more than 370 million of it on sport.
Kalshi has itself acknowledged that nearly three times as many users lose as win. On Polymarket, blockchain analysis suggests 84 per cent of participants are down, and only two per cent of two and a half million users have cleared even a thousand dollars in profit. The median participant loses money faster than the median sports bettor. This looks like growth, but it functions as a wealth transfer, and the water is running out at the bottom.
Online poker did not thin from regulation alone. It thinned
because the fish felt the cost and left
ALREADY INHIBITED None of this is slowing the capital. New entrants are racing to build the expert layer for prediction markets, the RotoGrinders or the TradingView of the category. PredictQ, fresh from an oversubscribed pre-seed backed by serious names, is pitching transparency, verifiable trader reputation and tools for the full trading lifecycle. It is smart, and it is aimed squarely at the sophisticated user, which is the point. As prediction markets move into their financial and enterprise phase, they are optimising ever harder for the predator, at the precise moment the ecosystem is short of prey. The rise of specialist data trackers monitoring every market to the dollar signals not a healthy retail crowd but a room that has already turned professional.
That is the structural inhibition. A market can be technically superb, brilliantly capitalised and still rest on a base too thin to sustain it. The exchanges learned that a mispriced ecosystem does not fail loudly. It fails slowly, as the recreational money quietly stops arriving.
The valuations assume a crowd the data cannot find. That is the emperor’s new clothes, and the industry is starting to feel the draught.
AND THE PREDICTION? So here is my prediction about predictions. The volume is real, but its composition is the story, and the composition is professional. Unless the category can find, welcome and protect a broad base of recreational players who enjoy the experience enough to come back after they lose, it will not scale into the mainstream. It will harden into a high-quality trading venue for a small, expert crowd. There is a business in that, but a far smaller one than the valuations imply.
Sharks are magnificent. A reef of nothing but sharks, though, is not an ecosystem. It is a last supper.
About the author Mark McGuinness is a marketing leader with more than 20 years across gaming, iGaming and Web3, advising operators and the suppliers who serve them on
go-to-market strategy, brand architecture and the use of behavioural science in commercial decisions. His work centres on building brands that earn trust and turning customer data into player experience that lasts. He is currently Marketing Lead for CreateFuture’s iGaming division.
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