Written by

Kayode Kehinde

Kayode is a professional iGaming content writer and slots lover with extensive experience covering casino reviews, sportsbook platforms, top betting apps, among other emerging digital gambling products. He is known for creating sharp engaging iGaming content which readers absolutely love to read. He has a strong background in SEO, regulatory insights, and freelance coaching.

The U.S. 2024 presidential elections produced an intriguing trend. As cable news anchors argued about poll averages and pundits made definitive predictions, young people who had grown tired of watching or reading about the election process took action by wagering on its outcome. They did not bet at a casino, nor did they place their wagers with a sportsbook; instead they placed bets via prediction markets.

And, as you may guess, most never left. According to reports from two regulated prediction markets exchanges (Kalshi and Polymarket) there is evidence of a real paradigmatic shift. The number of new account registrants grew 340% (year-over-year) across these exchanges in the three months leading up to the Nov. 2024 U.S. presidential election. Predictive market exchange Polymarket alone saw approximately $3.5 billion in predictive market volume generated around the election. The primary age group represented in this demographic was adults aged 18-34. This is a demographic traditionally difficult for the financial industry to reach and one that has become increasingly competitive among bookmakers and other gaming interests.

What Prediction Markets Actually Are

Prediction markets enable users to purchase and sell on-line contracts that are connected to the occurrence or non-occurrence of real world events. Contracts like “What is the probability the Federal Reserve will reduce interest rates during first quarter 2025?” may be priced at $0.62, which equates to a 62% implied probability by the market for such an event occurring. If the Federal Reserve reduces interest rates (and you purchased the contract), the contract would pay $1.00. If they do not lower interest rates (or if you did not purchase the contract) then it simply expires worthless. As new information is introduced into the marketplace, this price is updated in real-time.

The mechanics of prediction markets sit somewhat in-between traditional financial trading and sports wagering – familiar enough to draw both types of crowds; but distinct enough from those areas to create unique regulatory challenges and psychological barriers. Those ambiguous characteristics have created both headaches for regulators and opportunities for marketers.

Why Younger Users Are Drawn In

The fact that prediction markets resonate so much with people aged 18-34 years old can be attributed to several convergent factors:

• Skill Framing: Prediction markets differ from gambling at casinos, and also somewhat from sports betting. Prediction market participants frame themselves as doing some sort of “research” on the topic they are trying to predict. This self-perceived superiority over others helps to generate interest in using these sites, which creates repeat use. Whether the participant’s perception has merit or not doesn’t matter; it generates interest.
• Low Barrier to Entry: The majority of online prediction markets require an initial investment of only $5-$10. The minimal required investment for participation allows the user to enter without fear of a large financial loss and mirrors the same type of micro investing that created popularity in applications such as Robin Hood and Acorn.
• Culture Relevance of Content: Younger users are highly interested in tracking elections, celebrity outcomes, cryptocurrency prices, sports championship wins, etc. These types of content are exactly what young users already follow closely. Therefore, prediction markets give the user a way to monetize their existing obsession.
• Community/Social Dynamics: Polymarket and other similar platforms have developed very active groups on X (Twitter), and on Discord. These groups allow users to discuss, compare opinions regarding their predictions, create followers, and promote one another’s ideas. What may otherwise be a solitary activity (placing bets/wagers) becomes a collective endeavor through the social dynamics.
• Familiarity with Cryptocurrency/Blockchain Technology: Many users who participate in Polymarket will fund their account with USDC (a stablecoin), due to the platform being built on the Polygon Blockchain. A significant portion of this demographic will be familiar with funding a digital wallet and participating in decentralized finance (“DeFi”) concepts — therefore this process presents no barrier, but actually increases the attractiveness to the demographics.

The Platforms Attracting This Audience

What This Means for the Broader Gambling and Fintech Landscape

Traditional sports book operators are taking notice of this emerging trend. The 18-34 age demographic is arguably the most competitive demographic for acquiring users in the U.S. legal sports betting space. Prediction markets are showing that if the demographics and the content frame and structure of the product meet this cohort’s needs, there is a strong likelihood that they will participate in probability based wagering. Multiple large scale operators have applied for or have launched event contract style products.

A larger issue going forward is if prediction markets create another vertical that is complementary to existing sports betting and iGaming offerings or represents a competing offering that siphons customers away from these areas. Based on early results, it appears as though prediction markets represent an additional revenue source that can be used in conjunction with sports betting and iGaming. Users of prediction markets appear to have higher levels of information seeking behavior than do users of more traditional gaming products. Further, users of prediction markets appear to be participating in other forms of betting and investing, thus creating an additional layer of addressable customer base for operators rather than cannibalizing their existing user bases.

As a result, at this time, prediction markets have accomplished something relatively rare; they have created a whole new way of thinking about an entire category of financial products and have helped make them relevant to a demographic that generally does not think of themselves as investors. Growth rates suggest that relevance is not short lived.