A recent study found that prediction markets and sportsbooks are fiercely competitive, with some data suggesting that prediction markets are stealing customers from sportsbooks.
According to a study by Fullstory, a behavioral data analytics company, 60% of bettors polled said that prediction markets are changing how they use sportsbooks as yes/no interactions continue to change. 35% acknowledged that they had decreased their use of typical sports betting platforms as access to sports event contracts grew.
“Consumers are being presented with more options for how they can participate in online gaming, creating a more competitive landscape where a seamless digital experience is increasingly becoming part of the value proposition,” said Jason Wolf, president of Fullstory, in a statement.
“The brands that understand how consumers are navigating, comparing, and engaging with their platforms in real-time can identify where friction is getting in the way of trust and retention.”
Depending on the event they're considering gambling on, one-quarter of respondents said they utilize both prediction markets and sportsbooks.
The 35% reduced usage figure may seem like a warning shot to gaming companies, but a slew of other studies and surveys suggest that when punters have the option of choosing between a sportsbook and an all-or-nothing exchange, they often go for the latter.
Markets for Predictions Making Additional inroads
Although sports event contracts are currently the prediction market industry's mainstay category, data show that bettors and traders are using other categories.
Although 62% of customers have participated in sports event contracts, 42% traded economic or financial derivatives on a prediction market, and a comparable percentage made transactions in election or political event contracts, according to Fullstory. Over a fourth of participants traded at least one pop culture or entertainment derivative.
In an era where certain analysts predict that volume may reach $10 trillion by 2035—a forecast that is primarily based on other categories outranking sports for the top spot—that expanding breadth is essential for the industry.
Almost a third of those polled by Fullstory stated that a larger range of event contracts may make them choose a prediction market over a sportsbook more frequently.
Customization Is Essential
The fact that sportsbook operators can provide considerably greater sign-up and retention incentives than prediction markets gives them an unfair advantage, and gaming businesses are investing heavily in these expenditures this football season.
Both prediction markets and sportsbooks should place a premium on providing individualized experiences for clients since promotional expenditure has shown to be a successful customer acquisition strategy.
“Twelve percent of respondents have switched platforms because another offered personalization aligned with their interests, while 9% said recommendations based on their interests would make them more likely to try a prediction market,” concluded Fullstory.
