CGV Research | When the Game is Priced and the Outcome is Quantified - How Prediction Markets Will Revolutionize the "Sports Betting Industry"
- CGV FoF
- Nov 14, 2025
- 7 min read
Published by: CGV Research
Authors: Shigeru & Cynic
Beyond the cheers and roars in the stadium, another invisible contest has long begun.
It's not on the field, but in the market - betting, trading, price fluctuations, converging the judgments and emotions of millions worldwide. However, traditional sports betting is facing a crisis of trust: odds are set by bookmakers, rules are opaque, and match-fixing and corruption are frequent.
Prediction markets are reconstructing the logic of sports gambling through decentralization, transparency, and real-time pricing - when game outcomes can be priced by the crowd, when odds are generated by market consensus, "betting" might be redefined as "prediction."
From Wagers to Consensus: The Sporting Evolution of Prediction Markets
These nodes illustrate the progression of sports prediction markets from "wagering for entertainment" to "market consensus."
In the past, people bet for thrill; now, prices begin to reflect genuine judgment. Prediction markets transform every match from a clash of emotions into a pricing of collective intelligence. When outcomes can be collectively "priced" by the crowd, the meaning of sports extends from entertainment to cognition and participation.
The De-bookmakerization of Odds: How Prices Reflect Consensus
In traditional betting, odds are set by "bookmakers." Bookmakers are both rule-setters and participants, a structure inherently plagued by information and interest asymmetry. Prediction markets, however, completely overturn this mechanism.
On Polymarket, anyone can create a sports event: "Will Manchester City win the Premier League?" The initial price might be 0.5 (i.e., a 50% probability), but as capital flows in, traders judge, and information updates, the price adjusts dynamically.
When odds are no longer controlled by bookmakers but are formed collectively by market participants, the price itself becomes the "real-time consensus." The essence of this model is "crowdsourced probability": each trader bets based on information, and the price reflects the market's overall belief; the larger the market and the more information, the closer the price is to the "true probability"; anyone can "bet against the bookmaker" - as long as their information is more accurate. This gives "sports betting" a transparent structure of "consensus-as-price" for the first time.
More importantly, unlike traditional sports betting, prediction markets support real-time trading during matches. This means that live game developments are rapidly transmitted to prices through the market's invisible hand. For viewers not watching live, prediction market prices are highly likely to reflect the game situation faster than the broadcast.
Case 1: Performance of Prediction Markets during UEFA Euro 2024
During UEFA Euro 2024, Polymarket launched 42 core markets with a total trading volume of $28M.
Taking "Will Spain win the championship?" as an example:
- Before the tournament, the market price was 0.12, reflecting an initial consensus that undervalued Spain.
- After beating Germany in the quarter-finals, the market price rose to 0.55, showing rapid capital inflow after strength was verified.
- 24 hours before the final, the price reached 0.72, as the market digested all injury and tactical information.
- Finally, at the end of the final, the price reached 1.00, Spain won, and the market paid out.
Compared to fixed odds on traditional platforms like Bet365, Polymarket prices reflected key information (e.g., player form, weather, social media buzz) 12–24 hours earlier. Volatility was highest 24 hours before matches, indicating the market's real-time integration of multi-source data. Betting is no longer gambling but a collective information pricing mechanism.
Restructuring Incentives: From "Beating the Bookmaker" to "Beating the Information"
The key to prediction markets is not betting on luck, but betting on information. In traditional betting, information asymmetry is the bookmaker's moat; in prediction markets, information transparency becomes the player's weapon.
This mechanism brings three fundamental changes:
1. Information becomes a tradable asset
Training videos, injury reports, Twitter sentiment, weather forecasts - all instantly translate into price signals.
Predictors profit from information arbitrage, incentivizing high-quality data sharing.
2. The bookmaker's role dissolves
The system automatically matches orders, settles on-chain, and requires no centralized risk control.
3. Community-driven ecosystem formation
a. Events proposed by users/AI
b. Resolution standards governed by the community (e.g., Kleros dispute resolution)
c. Transparent distribution of token rewards
Those who provide more accurate information earn more. Sports prediction is evolving from simple gambling into a decentralized information gaming ecosystem.
Case 2: On-Chain Resonance in the 2024 NBA MVP Prediction
During the 2024 season, Polymarket partnered with Flipside Crypto to launch the "NBA MVP Prediction Market," integrating the following data sources: On-chain: Player NFT trading volume (liquidity and fan traction); Off-chain: Twitter sentiment analysis, ESPN injury reports, schedule strength models.
At the start of the season, Nikola Jokić's MVP market price was 0.28, as the three-way competition was fierce and market expectations were dispersed. After the All-Star break, the price rose to 0.65, as Jokić's performance surged and injuries decreased, significantly boosting market confidence. By the end of the regular season, the price further increased to 0.89, as media narratives began clearly favoring Jokić. Ultimately, the price reached 1.00, Jokić successfully won his third MVP, and market expectations were fully realized.
The market price locked in the outcome 6 weeks early ahead of traditional media predictions. This validated the synergistic predictive power of "on-chain data + crowd wisdom."
From "Watching" to "Participating": The Remaking of the Viewer Economy
Another layer of transformation brought by prediction markets is the "financialization of viewer participation." In the past, viewers could only passively consume content; now, they can actively participate in judging outcomes and receive economic returns.
This means the "fan economy" is being rewritten:
In the traditional sports model, the core logic is "watch + consume," where viewers participate mainly by watching events and buying related products; in the prediction market-style sports model, the core logic shifts to "predict + participate," where viewers simultaneously become market participants.
The revenue structure of traditional sports is dominated by platform exclusivity, while prediction market-style sports adopts a shared mechanism, where winners receive profit shares.
In terms of interaction forms, traditional sports rely mainly on comments and votes, while prediction market-style sports involve deeper interactions, including betting, market making, and arbitrage.
Regarding data feedback, traditional sports depend on passive metrics like viewership ratings, while prediction market-style sports reflect market sentiment and cognitive changes in real-time through price curves and capital flows.
68% of Polymarket sports users identify as "hardcore fans" - prediction becomes a new way to express support. This model brings strong community stickiness and viral spread.
The Play-to-Predict era is approaching. Fans are no longer just viewers but "virtual participants" in the form of predictors.
For top sports leagues like the NFL, Premier League, and LPL, embracing or even leading prediction markets is not just about following the trend but a business decision with profound strategic value. Firstly, it is an unprecedented user engagement engine, transforming millions of viewers from passive "watchers" into active "stakeholders," significantly enhancing game stickiness and buzz. Secondly, market prices themselves serve as a highly sensitive real-time polling tool, allowing leagues to gain insights into fan sentiment, assess player popularity, and even test the popularity of new rules - their value far exceeds traditional surveys. Finally, it's a brand-new commercialization channel. Through official licensing, data API partnerships, or sharing transaction fees, leagues can tap into a potentially huge digital-native revenue stream independent of broadcasting rights and ticket sales.
Case 3: 2025 "League of Legends" S15 World Championship Prediction Market
On November 2, 2025, the night of the Shanghai final, Polymarket and Azuro jointly launched the S15 fully on-chain prediction ecosystem. This system marked the first global implementation of multi-layered on-chain prediction trading for esports events.
At the macro level, markets like "Will T1 win the championship?" peaked at $18.7M in trading volume and achieved automatic on-chain settlement within 3 seconds.
At the micro level, markets like "Who gets the next Dragon?" averaged $420k per wave, updating continuously in real-time rolling fashion.
In player prop markets, "Will Faker's KDA exceed 10 this game?" reached $1.2M in volume, with efficient clearing achieved through API.
This signifies the deep integration of esports and blockchain prediction markets, forming a real-time, transparent, and globally participatory fully on-chain sports prediction ecosystem.
Regulation and Ethics: The "On-Chain Referee" for Sports
Similar to the news industry, regulation remains a key challenge for sports prediction.
Regulatory Gray Areas: The CFTC and US gambling commissions have not unified the definition of "event contracts."
Manipulation Risks: When player actions can influence market prices, could incentives for "fake plays" emerge?
Settlement Standards: Ambiguous events (e.g., "Did the player appear?") might trigger oracle disputes.
Potential solutions include: Using multi-layered oracle mechanisms (e.g., Chainlink + UMA) to verify results; Introducing reputation staking models to penalize manipulation; Implementing AI anomaly detection to identify suspicious trading and outcome deviations.
In summary, the goal of these mechanisms is consistent: to make prediction markets the "on-chain referee" in the sports world - fair, transparent, and verifiable.
Within the next three years, we might witness an ecological landscape like this:
Media Integration: Mainstream outlets like ESPN and CBS have started embedding on-chain odds, making prediction data a standard element of sports reporting.
Platform Transformation: Traditional betting platforms like DraftKings are exploring on-chain settlement mechanisms, signaling a migration of the traditional betting system towards decentralization.
AI Market Making Realm: AI Agents can automatically generate and balance markets, providing 24/7 liquidity, making prices more accurately reflect real-time information.
League Token Trend: Entities like the NBA and Premier League launch prediction index tokens, gradually forming a decentralized sports ETF ecosystem.
By then, sports will no longer be just entertainment, but a financial experiment in collective intelligence. People won't just be betting on outcomes; they'll be trading consensus, trust, and truth.
When the game is priced, the truth doesn't end with the whistle; it continues to ferment in the prices of the market.
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About Cryptogram Venture (CGV):
CGV (Cryptogram Venture) is a crypto investment institution headquartered in Tokyo, Japan. Since 2017, its fund and predecessor funds have participated in investments in over 200 projects. Since 2022, CGV has invested in and incubated the licensed Japanese yen stablecoin JPYW, making an early move in the crypto stablecoin sector. Starting in 2024, CGV has expanded into the tokenized equity and RWA markets, participating in private placements of projects such as Nabate (NA) and Victory Securities (8540.HK). Currently, CGV also has branches in locations such as Hong Kong and Silicon Valley.
Disclaimer:
The information and materials introduced in this article are sourced from public channels, and our company does not guarantee their accuracy or completeness. Descriptions or predictions involving future situations are forward-looking statements, and any advice and opinions provided are for reference only and do not constitute investment advice or implications for anyone. The strategies our company may adopt could be the same, opposite, or unrelated to the strategies readers might speculate based on this article.
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