Bernstein Puts Prediction Market Volume at $10tn by 2035, With Sport Down to a Third of It

The bank's analysts see yes/no exchange turnover compounding at 70% a year from $410bn this year, and financial derivatives overtaking sport to become the largest category. Five months ago the same firm's 2030 number was $1tn.

• Bernstein analysts led by Gautam Chhugani estimate prediction market volume will reach $10 trillion a year by 2035, compounding at 70% annually from a forecast $410 billion of yes/no exchange turnover this year, Casino.org reports
• That is a more than twentyfold increase on the 2026 figure, and it sits well above the most bullish earlier projections: Bernstein itself said $1 trillion by 2030 in April, Bank of America has said $1.1 trillion, and Macquarie's Chad Beynon put it at $1.5 trillion by 2030 in a July report
• Sports event contracts, currently the industry's mainstay, are expected to fall to 35% of volume by 2035, while financial derivatives tied to commodities, cryptocurrencies and stocks rise to 49% and become the largest category
• Bernstein expects growth to come from new instruments including KPI markets, which let a user trade a single corporate metric such as production, deliveries or subscriber growth rather than the share price, and from perpetual futures spreading from crypto into commodities and single stocks
• The firm has previously estimated that $1 trillion of annual activity could generate as much as $10.8 billion of operator revenue, and notes that crypto event contracts already account for at least 20% of turnover on the two largest venues

A Twentyfold Forecast, and the Part That Is Not About Sport

Bernstein has put a number on prediction markets that dwarfs every previous estimate. Analysts led by Gautam Chhugani forecast $410 billion of yes/no exchange turnover this year and $10 trillion a year by 2035, a compound annual rate of about 70%, according to Casino.org.

The scale of the revision is easier to read against the firm's own earlier work. In April, Bernstein estimated the sector would reach $1 trillion by 2030. Bank of America has said prediction markets will eventually grow to $1.1 trillion of yearly turnover, and Macquarie's Chad Beynon forecast $1.5 trillion by 2030 in a report in July. Those were the optimistic numbers. Bernstein is now describing a market an order of magnitude larger, five years further out.

The composition matters more than the total. Sports event contracts are what the category is known for and what regulators have been arguing about all year, but Bernstein expects their share of volume to fall to 35% by 2035. Financial derivatives, meaning contracts on commodities, cryptocurrencies and equities, are forecast to reach 49% and take the top slot. The analysts point to instruments that barely exist yet: "We expect new products such as KPI markets, which allow users to trade a single corporate metric, such as production, deliveries, or subscriber growth, rather than the stock price itself," they write, alongside perpetual futures spreading from crypto into commodities and single stocks. Some venues have already filed plans for KPI-linked contracts tied to quarterly earnings or to figures such as iPhone shipments or Tesla deliveries.

There is evidence underneath the projection as well as arithmetic. Crypto event contracts already make up at least 20% of turnover on the two largest exchanges. One of those operators recorded $2 million of commodities volume last year, passed $410 million in August alone, and is approaching $600 million year to date. Bernstein's framing for the end point is that the global market for financial contracts will grow to $900 trillion by 2035 from $700 trillion last year, and that capturing half a percent of it would by itself add $4.7 trillion of annual volume.

The Number to Watch Is the Share, Not the Total

A ten-year forecast compounding at 70% is a scenario, not a plan, and it will be revised repeatedly before 2035. The genuinely informative claim is the mix: that sport falls to roughly a third of a much larger market. Every regulatory fight in the United States this year, the state cease-and-desist letters, the tribal litigation, the sportsbook complaints, has been about sports event contracts, on the assumption that sport is what these venues are for. If Bernstein is right, the industry's regulatory centre of gravity moves to instruments that look unambiguously like financial products and sit unambiguously with the CFTC. The firms fighting over whether a sports contract is gambling may be fighting over a shrinking share.

Half a Percent of $900 Trillion Is Doing a Lot of Work

The derivation is honest and it is also the weakest link. The notional value of global financial contracts is not a pool of demand that prediction markets can dip into; most of it is hedging by institutions with no reason to use a retail yes/no venue. Assuming half a percent conversion turns an enormous denominator into an enormous answer without establishing who the buyer is. The bottom-up evidence Bernstein cites, crypto at a fifth of turnover and commodities growing from $2 million to $600 million in a year, is far more persuasive than the top-down estimate, and it points at the same conclusion by a sounder route.

Revenue Is Where the Enthusiasm Should Be Tested

The firm's own ratio implies roughly $10.8 billion of operator revenue per $1 trillion of volume, a take of about 1%. That is thin by gambling standards and normal by exchange standards, and it is the number that decides whether this becomes a large industry or merely a large statistic. Turnover on a matched exchange counts both sides and rolls over rapidly, so a headline of $10 trillion could support a revenue pool smaller than a handful of regulated sports betting markets. Anyone reading the forecast as a threat to the sportsbook sector should look at the take rate before reaching for it.

Bernstein has told the market that prediction exchanges will outgrow sport and become a financial venue. That is a bigger claim than the $10 trillion, and a more testable one.