Retail traders are experiencing higher losses in prediction markets than in legal sportsbooks, according to a study by Citizens. The research indicates that retail users in prediction markets had a median return of -8% from July 2025 to mid-March 2026, compared to -5% for sportsbook users. High-volume traders in prediction markets, those trading over $500,000, achieved a median ROI of +2.6%, while smaller traders faced losses up to -26.8%. In contrast, no cohort in sports betting was profitable, but losses were less severe, with the largest bettors losing only -0.6%. The study highlights that prediction markets attract a younger demographic, with 24% of Kalshi users under 25, compared to just 7% for DraftKings and FanDuel. Despite concerns about cannibalization, gaming executives downplay the impact of prediction markets on traditional sportsbooks. However, the potential for prediction markets to capture younger users before they engage with sportsbooks is noted, as evidenced by Kalshi's 6.3 million downloads during the study period.