United States Seeing Domination of a New Kind of Business: Prediction Markets
Prediction markets have quickly risen to prominence in the United States and elsewhere across the globe. They allow people to buy stakes in the likelihood of future events occurring.
These platforms became popular around five years ago but in recent years have taken on a new wave of popularity, with the ability to place predictions on anything from sports to politics, business events or even the weather.
The Expansion of Prediction Markets
To understand how fast prediction markets have grown, most of them didn’t operate in the US before 2025. Now, operators like Kalshi and Polymarket are becoming household brands, with even betting operators like DraftKings opening their own markets.
With so many of them around, this competition is good for those using them, as the best prediction markets available now feature a range of new user promos. These can include credit to be placed in a variety of markets across the globe. Options can include everything from sports, politics, financials, weather, entertainment, and more.
Prediction markets have been compared to gambling activities, but they work in a different way, allowing people to buy a share in the likelihood of an event taking place, much like you would buy a stock or share. This is then sold on when the likelihood rises, for more money. This kind of model is known as a ‘collective intelligence’, where the movements of these markets rely on ‘crowd wisdom’.
How Big Is the Prediction Market Business Becoming?
It’s undeniable that these markets have quickly become big business. With rapid growth, the sector is now considered to have global monthly trading volumes exceeding $24 billion, with growth mainly seen in the United States.
The major platforms, like Polymarket and Kalshi, have achieved large valuations of $9 billion and $22 billion, respectively. These expansions in valuation have caused Wall Street to pay attention, taking these companies from the peripheries into mainstream American media, culture and financial markets.
There has been a large discussion around the regulatory landscape of these businesses, with the formal legal definition of this market set out by federal and state bodies continuing to be debated.
Sara Slane, the head of corporate development for Kalshi, has said that, “We are regulated at the federal level, but of course, given now the popularity of prediction markets, we are doing a lot of educating on the state level.”
What Are the Next Stages of Growth?
Kalish and Polymarket show no sign of slowing down and are now looking to bring in investment financial institutions to facilitate their next stages of growth. This has meant the platforms are being required to address some business concerns, including liquidity concerns, with long-term liquidity concerns raised as an issue facing the businesses. Kalshi has stated that their moves to bring in institutions aim to address these issues of liquidity.
As these businesses continue to expand, it could be that more growth challenges are brought to the fore, but it seems for now that growth remains strong, despite wider debates around the regulatory landscape.