2Q Preview: Near-Term Pressure, Long-Term Predictions Upside

研报英文原文证据摘录

2Q Preview: Near-Term Pressure, Long-Term Predictions Upside

tem rather than an incremental

product offering.

Regulatory Uncertainty Masks Underappreciated Prediction Markets Upside

Potential

As TD Cowen senior policy analysts Jaret Seiberg and Paul Gallant elaborated in the

aforementioned Ahead of the Curve report, regulation remains the largest variable influencing

the long-term economics of prediction markets. The CFTC continues to assert exclusive federal

jurisdiction over event contracts, while multiple state regulators maintain that sports-related

contracts constitute sports betting subject to state licensing and taxation. We believe this

growing legal divide is increasingly likely to require higher-court review, with the ultimate

resolution influencing market access, liquidity, tax burdens, and industry profitability. While

the regulatory framework remains uncertain, we believe investors may be placing too much

emphasis on near-term legal debates and insufficient emphasis on the magnitude of the

opportunity that could emerge under a favorable outcome.

Our market-sizing analysis points to approximately $1 trillion of annual prediction market

trading volume by 2030, equivalent to roughly $10 billion of industry revenue assuming a 1%

take rate. Our analysis is built on approximately 22 million users by the end of the decade,

including 15 million casual users, 5 million core users, and 3 million power users. Importantly,

we believe a relatively small base of highly engaged participants could drive a disproportionate

share of total trading activity, suggesting meaningful scale can be achieved without requiring

mass-market participation across the entire user base. More broadly, the engagement data