Prediction markets went through their Big Bang in 2025—a rapid, chaotic, and uncontrollably rapid expansion. Consolidation and some certainty on legality and regulation are expected in 2026, according to experts.
This year, platforms like as Kalshi and Polymarket received billions of dollars, and contracts for sporting events became the focal point of their operations. The majority of regulators observed from the sidelines, while some responded. In the meantime, the number of participants in the sector grew every month: Everyone wants a piece of the prediction-markets pie, from FanDuel, DraftKings, and Fanatics to Robinhood, PrizePicks, and Underdog. Even his own is being launched by President Trump. (In the meantime, Polymarket and Kalshi both have Donald Trump Jr. as an official advisor.)
Although prediction markets offer more than sports—users can put money on everything from whether it will rain in New York City today to what words President Trump will say in a speech—the allure for sports event contracts is simple: It’s a way for companies to offer what is essentially identical to sports betting in all 50 states, even those where the practice is still prohibited.
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The underpinning claim, which is being argued in multiple legal fights, is that there’s a technical difference between betting and trading. When you place a bet on a prediction-markets site, the companies say, you’re actually investing in a futures contract.
Stephen Piepgrass, a partner at law firm Troutman Pepper Locke, whose practice includes counseling clients in the gaming industry, says the rapid growth of prediction markets can be likened to what happened when alcohol delivery became widely available during the COVID-19 pandemic.
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