Citizens: Prediction Market Combo Users Achieve Lower ROI Than Parlay Bettors

(AsiaGameHub) –   A new analysis, this time conducted by Citizens JMP Securities, suggests that participants in prediction markets tend to incur greater losses than those involved in traditional sports betting. The report specifically focused on prediction market combinations, comparing them with conventional sports betting parlays.

Combination Users Face Higher Losses, Hybrid Users Suffer the Most

According to experts at Citizens, traders utilizing prediction market combinations lose approximately 45% more than sports bettors who use parlays. Citizens based its findings on anonymized user data sourced from Juice Reel, an advanced platform for tracking bets.

Based on Juice Reel data, Citizens determined that the average investment loss when engaging with prediction market combinations was 18% – a figure notably higher than the 14% observed for sports betting parlays.

Analysts further noted that for single wagers, the median loss for sports bettors was 6%, while for prediction market users, it stood at 8%. Citizens indicated that these figures suggest prediction markets lead to less favorable outcomes for casual participants, yet prove beneficial for professional traders.

Citizens also highlighted the presence of individuals who engage with both sports betting platforms and prediction markets. These players, the firm stated, experience the worst outcomes, with a median return on investment of negative 9% on sports betting parlays and a loss of 23% on prediction market combinations.

These Assertions Align with Previous Research

This analysis emerges as the prediction markets sector continues to experience unprecedented expansion, despite the significant opposition faced by the industry. While several states have attempted to regulate prediction markets, alleging that their products constitute illegal gambling, the CFTC has intervened by suing these states, leading to substantial complications.

Concurrently, combination trades have firmly established themselves as a highly popular product and, according to Citizens, were responsible for 22% of Kalshi’s total trading volume in April. During the same month, parlays accounted for approximately 33% of the sportsbook handle.

Regardless, Citizens‘ discoveries corroborate other recent studies, which have similarly indicated that, on average, casual participants in prediction markets tend to incur greater losses and achieve poorer returns on investment.

In April, analyst Andrey Sergeenkov disclosed that the majority of Polymarket traders experience financial losses, with merely 15.9% of all users generating profit. This appeared to reinforce arguments that prediction markets are more advantageous for professional traders.