The growth numbers are hard to ignore. Monthly volume went from under $100 million in early 2024 to over $13 billion by the end of 2025. Active users went from around 4,000 to over 600,000 in the same period. That kind of trajectory doesn't happen in a niche; it happens in a category that's finding mainstream traction.
How they actually work
The core mechanic is different from traditional betting. Users don't wager against a house; they trade probability contracts with each other. You buy a YES or NO position on an outcome, and you can exit that position before the event resolves. The platform takes a fee on matched trades and has no exposure to the result. It's structurally closer to a futures exchange than a sportsbook.
What people are betting on
Elections and political events are the obvious use case, but the markets have expanded well beyond that. Active contracts currently exist on AI product releases, entertainment awards, crypto price movements, geopolitical events, and considerably more niche outcomes. The range is partly what makes these platforms interesting from a market design perspective. Price discovery works on almost anything where there's genuine uncertainty and enough participants.
The main platforms
Kalshi is US-regulated and fought a legal battle to offer election contracts, which a federal appeals court cleared in 2024. Polymarket operates on-chain and has attracted significant volume in crypto-native audiences. PredictIt has been running under a CFTC no-action letter for years and remains one of the oldest active platforms. On the institutional side, DraftKings and FanDuel are developing prediction products, with FanDuel working alongside CME Group. Robinhood and Interactive Brokers are also reportedly exploring the space.
Why is this happening now
Regulatory clarity, particularly in the US, is the biggest unlock. Beyond that, the post-COVID retail trading wave brought a large new audience to probabilistic thinking about markets. There's also a structural shift in how younger demographics relate to financial products — peer-driven, transparent, and sceptical of traditional intermediaries.
Where it goes
Some projections put annual volume at $1 trillion by the end of the decade. Whether that materialises depends heavily on how regulators in other jurisdictions respond, and whether platforms can manage the reputational risk that comes with politically sensitive markets.
Have you tried any prediction markets yourself — and did it feel more like gambling or more like trading to you?
