Traditional sportsbooks have been around in some form or another for more than a century. They’ve captured the attention of young sports fans when they’re old enough to gamble legally.
However, the next generation in the US is now moving towards prediction markets due to their embrace of popular culture and easy-to-use offering. Sportsbooks are now scrambling to make up for this deficit and rebound in 2026.
But, are they losing the next generation of sports bettors?
Built for young people
Younger bettors aren’t necessarily loyal to traditional sportsbooks. They’ll go for whatever platform is the quickest, easiest, and most social. Prediction sites have a lot of characteristics that appeal to young people. This demographic looks for instant updates, makes quick decisions, and enjoys the dopamine hit from being right.
One of the biggest differentiators of prediction sites is that they don’t feel like gambling. Operators like Kalshi categorically claim that these markets are, in fact, not a form of gambling. Prediction markets feel more akin to buying a stock or voting with your wallet. They also cover a much broader range of markets than sportsbooks, offering bets on everything from politics and entertainment to the weather and technology.
yes/no nature of prediction markets clears up any confusion
The pricing model is often easier to understand than that of traditional sportsbooks. The yes/no nature of prediction markets clears up any confusion. Prediction sites also feel social, as people take to social media to post their picks, argue about their outcomes, and share screenshots.
A significant concern for regulators is that the social aspect of prediction sites may lead to problems in the future. The Council of Compulsive Gambling of Pennsylvania said that these platforms “expose a highly vulnerable demographic to an activity that has inherent risks.” The organisation has seen a “dramatic increase” in the number of people using these sites contacting the helpline.
Traditional sportsbooks fighting back
Sportsbooks are fully aware of the dangers that prediction sites pose to them. Citizens Financial analysts expect the prediction sector to reach $10bn in annual revenue by 2030. That’s a significant amount of money that traditional operators could miss out on if they’re not careful.
Lobbying efforts have largely been unsuccessful so far. Several state regulators have filed legal action to seek an injunction against prediction markets. However, none have managed to do so yet. Some have even been the recipients of counter-suits from Kalshi.
trend towards traditional sportsbooks developing their own prediction market platforms
Otherwise, there’s a trend towards traditional sportsbooks developing their own prediction market platforms. Fanatics Betting and Gaming launched its own product on December 3 in 24 states. This was followed a couple of weeks later by DraftKings Predictions going live in 38 states, including Texas and California. FanDuel is reportedly planning to launch its own similar platform in the coming months.
Sportsbooks understand that the younger generation is different from what has come before. They’re looking for user experience and simplicity rather than offerings that can feel overwhelming. They’re also focusing a lot more on in-play markets and micro bets that are tailored towards specific plays.
What does 2026 hold?
The next 12 months will be pivotal in shaping the prediction market landscape for the next decade. Kalshi has gained a significant head start over its main rival, Polymarket, as well as traditional sportsbooks in the US market. However, these operators are catching up.
DraftKings CEO Jason Robins believes the popularity of prediction markets and their availability in all 50 states means that more regions will legalize sports betting in the near future. There will still be a space for separate sportsbooks and prediction markets. Older bettors will prefer the tried-and-true models, while younger generations will look elsewhere.
sportsbooks chasing prediction markets will likely invest heavily in customer acquisition
Traditional sportsbooks chasing prediction markets will likely invest heavily in customer acquisition. They’re not so much worried about short-term results versus the next decade of the lifetime value of a user.
The regulatory landscape is also up in the air. The CFTC is currently strongly backing prediction market sites, protecting them from state gambling regulators who believe the platforms should fall under their purview. Any major regulatory shifts or decisive legal victories in 2026 could lead to a slowdown in the growth of prediction markets.
An intriguing battle
Sportsbooks are going to have to work hard to build relationships with younger bettors, as they used to just win by default, since there weren’t any credible alternatives. Now options are abundant, which is only a good thing for consumers.
The year ahead will be won by the platforms that are the easiest to understand, fun to share, and safe to use. People will keep coming back if these characteristics are all met. The next generation will then vote with their thumbs.
