Could the rise of prediction markets be down to under 21s?
New data has suggested that it is customers not old enough to legally gamble in the United States that has driven the growth of Kalshi and Polymarket.
The surge in prediction markets may be down to people who are not old enough to gamble in most US states.
Analyst Barry Jonas used data from HoldCrunch to reveal that Kalshi had more trading volume on college football than on professional leagues like the NFL.
College football accounted for 32% of sporting wagers, compared to 24% for the NFL. Jonas suggested this was a sign that it was 18-to 20-year-old college students accounting for the extra volume.
These students would not be old enough to place a wager on the games in a sportsbook, but in most States would be allowed to do so in prediction markets. Some states do not allow sports to be traded on by under-21s.
The President of the NCAA has written to the Commodities and Futures Trading Commission to ask them to remove college sports from prediction markets until more safeguards are in place for students.
Mirroring the poker boom?
The growth of prediction markets over the last year has been phenomenal.
It actually makes perfect sense that younger customers might be the reason, because that would mirror the poker boom of 2003, which was also driven, in no small part, by college students.
In contrast, last year, younger people were blamed for the decline in tourism in Las Vegas, where college-aged students would not be legally allowed to gamble.
Today's news makes the prediction market-focused episode of South Park seem prophetic, as that episode showed the school students betting on Kalshi and Polymarket on their phones.
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