Citizens Community Bancorp MD Analyst: Prediction Markets Cutting Super Bowl Betting, Impacting Community Banks

Community bank analyst flags betting shift ahead of Super Bowl

Prediction markets are reshaping how Americans wager on major events, and a senior analyst at Citizens Community Bancorp MD is warning the change has material implications for the regulated sports-betting ecosystem. Jordan Bender, a senior equity analyst at Citizens, says federally regulated exchanges such as Kalshi and Polymarket are “taking a bite out of” traditional Super Bowl handle. The shift opens event contracts to bettors in states where conventional sportsbooks remain illegal and diverts volume that previously flowed to regulated apps.

The emergence of these exchanges is creating a new channel for consumer activity that interacts with banking and payment systems used by community banks and other financial firms. Because prediction markets are federally regulated and available across state lines, they attract millions of Americans who would otherwise be excluded from legal sports betting. That broader access is prompting legal and regulatory pushback from state and federal gaming authorities, and it changes the flow of transactions that institutions must process and monitor.

For regional banks like Citizens, the trend is noteworthy not only for market research but for operational and compliance reasons. Larger-than-expected transaction volumes linked to event contracts can alter deposit patterns, merchant processing volumes and anti-money-laundering monitoring loads during peak events such as the Super Bowl. Bender’s comments underscore that banks and payment service providers may need to reassess risk controls and reporting practices as wagering activity fragments across new platforms.

Trading volumes and regulatory moves

Data from blockchain analytics and industry groups show rapid growth. Dune data indicates Kalshi records nearly $10 billion in contracts traded in January, about $8.5 billion tied to sports. The American Gaming Association reports roughly $800 million in Super Bowl contracts have traded on Kalshi and Polymarket so far, against an expected $1.8 billion wagered through traditional regulated sportsbooks. Polymarket has secured Commodity Futures Trading Commission approval to relaunch in the U.S. as it rolls out an app.

Industry response and outlook

Industry watchers say legacy sportsbook operators may need new products, partnerships and clearer regulatory frameworks to compete as prediction markets grow. H2 Gambling Capital forecasts total Super Bowl wagers, excluding prediction markets, rise about 9% to $1.78 billion, and estimates prediction markets could attract roughly $630 million and drive the majority of year‑over‑year growth in betting for the event. The evolving landscape prompts closer scrutiny from banks and regulators alike.