Prediction Market Research
Prediction market influence in banking, politics, and sports has attracted a lot of attention in recent years. This is an extensive report on market research into prediction markets which aims to show how it relates to gambling.
Prediction markets are places where people can trade contracts that pay based on the outcomes of various unknown future events. It’s like wagering markets established for the aim of making predictions to which gambling refers. If a big incentive is provided, the architecture of how gambling works plays a huge part in providing incentives for a large percentage of the population to invest more.
Gambling is a popular activity worldwide. According to trusted sources in 2023, around 26% of the world’s population has gambled at least once in their lives, summing up to over 2 billion people. The US has a gambling rate of around 85%, this is including the Americans who have gambled at least once since 2016. Singapore has the highest rate of gambling through casinos, accounting for around three-quarters of the total population. The UK has a gambling rate of 32.8%, which has been increasing since mid-September 2021. China’s gambling rate is gradually decreasing and is currently at 3%. From 2016 to 2023, the lowest prevalent rate ever recorded was between Germany and the Netherlands, which was around 0.35%.
The age range of gamblers varies depending on the law and facilities in a region. Overall, the average age of a person who is into land-based gambling facilities is 51.2 years, whereas the average age of online gamblers till now is 45.7 years. In the UK, 54% of 17-year-olds reported participating in gambling in the last year, which rises to 68% for 20-year-olds and stands at 66% for those aged 24. So, the age range of all the active and passive gamblers around the world doesn’t have a certain answer, but it narrows it down to the point that out of all the 26% percent of total gamblers, around 45–48% of them are in the age range of 16–24 years, whereas the rest of the gamblers are in the age range of 35–55 years. The statistics might vary, but credible sources estimate that the total gambling gross yield worldwide was almost $450 billion in 2016. This revenue came from every category of gambling sources. This revenue was consistent and increased at a rate of 24.75% until 2021 when the total gambling revenue came to $260 billion. The rate started to hold up at a 36.79% rate and grew from around $450 billion in 2022 to more than $700 billion in 2023, which results in a compound annual growth of 56.4%, at an estimate. The number of users in the online gambling market is expected to reach around 233.7 million by 2027.
The prediction market is a complex field which is rapidly evolving. Its growth is dependent on various technological advancements, regulatory changes, industrial integrations and much more. The data on how much money is made and lost can give us new insights into the total money generated by this market. The active players are increasing as well as the revenue incentive, but the players earning the desired value are descending at a concerning rate. The baseline is that the prediction market has gotten an increase of 5.6% in shares every year from business shareholders. If the prediction market doesn’t get disrupted in future, then this shareholder’s revenue can reach up to 17% in 2030, earning more profits.
The Prediction market might outperform in the long run, but active players are unlikely to get a profitable favor in the future.
Sources:
1) Nottingham University Business School; “Gambling, Prediction Markets and Public Policy” workshop (David Paton, Donald S. Siegel and Leighton Vaughan Williams)
2) Gambling commision of UK governmentStatistics: earthweb.com, casino.org, statista.com, hbswk.hbs.edu, zamsino.com, researchgate.net