As the digital wagering landscape undergoes a seismic shift with the rise of “event contracts,” the traditional sports betting giants aren’t losing their footing just yet. A comprehensive new industry study from Truist Securities, released March 17, 2026, reveals that established platforms like DraftKings continue to hold a significant advantage over specialized prediction markets like Kalshi when consumers are presented with both options.
The report, helmed by veteran Truist analyst Barry Jonas, offers a deep dive into the friction—and the synergy—between traditional online sports betting (OSB) and the burgeoning world of prediction markets. While prediction markets have captured the cultural zeitgeist by allowing users to trade on everything from Federal Reserve interest rate hikes to cinematic awards, the data suggests that for the average American bettor, the sportsbook remains the gold standard.
The Hierarchy of Choice: Brand Loyalty vs. Niche Utility
The Truist survey utilized a diverse pool of respondents to determine which products currently command the highest favorability in the market. When users were asked to rank their preferred platform for wagering and event trading, the “Big Two” of the gambling world maintained a clear lead:
- DraftKings Sportsbook: 20% (Ranked #1)
- Kalshi: 17%
- FanDuel Sportsbook: 15%
The data indicates that brand equity and the “all-in-one” nature of sportsbooks provide a sticky user experience that pure prediction markets have yet to replicate. According to Jonas, the drivers of this preference are varied but point toward a demand for high-quality infrastructure. Approximately 39% of respondents cited the “overall experience” as the primary reason for their platform choice, followed by success rates (19%), user interface fluidity (13%), and loyalty rewards/bonuses (11%).
However, the script flips when the competition is narrowed strictly to the prediction market sub-sector. In this specialized arena, Kalshi is the undisputed heavyweight, beating out the “Predictions” verticals launched by the major sportsbooks. Kalshi secured 17% of the vote in this category, followed by DraftKings Predictions (8%), Polymarket (7%), Robinhood PM (5%), and FanDuel Predicts (4%). This suggests that while bettors prefer sportsbooks for their primary gambling needs, they recognize Kalshi as the superior technical platform for event-specific contracts.
The “Legalization Gap” and Geographic Trends
One of the most revealing aspects of the Truist report is the geographic distribution of prediction market users. The highest engagement rates were found in states where traditional online sports betting remains illegal. California led the pack with 16% of respondents, followed by Texas at 9% and Florida at 7%.
In Florida, where Hard Rock holds a legal monopoly on sports wagering, and in California and Texas, where legislative efforts have repeatedly stalled, prediction markets are filling a void. They offer a legal, regulated way for residents to engage in “risk-based trading” that mimics the thrill of sports betting without running afoul of state laws.
However, this may be a temporary “borrowed” audience. The survey found that respondents in these “dark” states are highly likely to migrate back to traditional sportsbooks once they are legalized in their respective jurisdictions. This poses a long-term challenge for platforms like Kalshi: how to retain users once the “big players” like DraftKings and FanDuel are allowed to enter the market.
Notably, New York showed a high engagement rate for prediction markets at 9%. This is surprising given that New York is already the largest legal sports betting market in the United States. It suggests that in mature markets, prediction contracts aren’t just a substitute for sports betting—they are becoming a complementary hobby for high-volume bettors.
Debunking the “Gen Z” Gambling Myth
A common narrative in political and social circles is that prediction markets and sports betting apps are primarily attracting a younger, more vulnerable demographic. The Truist data, however, debunks the idea that these platforms are dominated by 18-to-21-year-olds.
In reality, only 5% of prediction market users are 21 or younger. The market is actually fueled by a much more mature and financially stable cohort:
- Ages 30–39: 36% (The largest user block)
- Ages 40–49: 31%
- Ages 22–29: 21%
This “Millennial and Gen X” dominance aligns with the socioeconomic profile of the modern event trader. Far from being a low-income pursuit, prediction market trading is attracting an affluent, highly educated professional class.
Education and Income Breakdown:
The survey found that nearly half (46%) of prediction market participants earn at least $100,000 per year. The educational credentials of these users are equally impressive:
| Education Level | % of Respondents |
| Bachelor’s Degree | 31% |
| Graduate Degree (MA, PhD, JD, MBA) | 26% |
| Some College / Associate Degree | 25% |
| High School Diploma or Less | 19% |
Income distribution further reinforces the “professional trader” persona. While 37% earn between $50k and $99k, a combined 46% earn between $100k and $249k, with an additional 4% reporting household incomes exceeding $250,000 annually.
Investor Sentiment and the “Cannibalization” Question
For investors tracking DraftKings (NASDAQ: DKNG) or Flutter Entertainment (NYSE: FLUT), the core takeaway is that prediction markets do not currently pose a threat of “cannibalization.”
Peter Jackson, CEO of Flutter (FanDuel’s parent company), recently noted that there is no tangible evidence of users leaving sportsbooks for prediction markets. Instead, the two sectors seem to be growing the total addressable market. Even in states where DraftKings is live, Kalshi only accounts for 3% of deposits, indicating that the “sports bettor” and the “event trader” are often two different types of consumers—or at least, they use different wallets for different activities.
As the industry moves toward 2027, the focus for sportsbooks will likely be the integration of these “prediction” features into their existing “Super Apps,” while pure-play markets like Kalshi will need to focus on defending their niche against the marketing might of the gambling titans.
