Prediction markets are here to stay – the biggest stories of 2025

As 2025 draws to a close, the expansion of prediction markets, propelled into mainstream attention during the 2024 US presidential election and subsequently targeted by regulatory pushback, has not slowed. Every week still brings a fresh development, but a handful of stories have defined the vertical. You may have caught the headlines, but now it’s time for the full story.

Valuations shoot up in 2025, with Polymarket and Kalshi leading the way

Kalshi and Polymarket have both closed multi-billion-dollar funding rounds throughout the year, increasing their value significantly. Kalshi has been a clear leader in this, with the company reaching $2 billion in value by closing a $185-million funding round in July 2025.

The company commented at the time, hailing 2025 as its "breakout year" and promising more significant developments to come. Kalshi did not lie because, after that, the company closed a $300 million Series D funding round amid its international expansion, throwing its hat in the ring against its larger competitor, Polymarket, and hitting $5 billion.

By early December, Kalshi had reached a valuation of $11 billion, with the company reporting $1 billion traded every week, and the company experiencing an eightfold growth in volume since July. Kalshi also reported hundreds of thousands of active users.

Rival Polymarket has also experienced a growth of its overall valuation, with the company said to be in "early talks" with investors that could possibly shoot up its valuation to anything between $12 billion and $15 billion.

Polymarket has also been able to obtain a license from the Commodity Futures Trading Commission, allowing the platform to relaunch in the United States, and, notably, it secured a $2 billion funding round from Intercontinental Exchange, the New York Stock Exchange, sending the company’s valuation to around $9 billion or $10 billion at the time.

Getting a foothold in the mainstream with TV network partnerships

Another major surprise in 2025 came when Kalshi, over the course of just a few days, announced two prominent partnerships with TV networks in the United States, with both CNN and CNBC partnering with the prediction markets platform.

Kalshi approached both arrangements similarly. The platform said that it is bringing its prediction data to help spearhead quality journalism, inform audiences, and give journalists early leads into emerging trends.

Commenting on the partnership with CNBC specifically, Kalshi CEO Tarek Mansour said:

"The world of finance depends on real-world outcomes; Kalshi predicts those outcomes. Together with CNBC, we’ll bring accurate, market-driven predictions to financial reporting. It’s the next evolution: moving from data about what’s happening now, to real-time forecasts about what’s happening next."

Far more importantly, having dedicated tickers displaying Kalshi data to hundreds of millions of Americans is a significant milestone in helping the company solidify its mainstream appeal and reach.

Regulators are up in arms

Gambling regulators have not sat quietly either, with the Nevada Gaming Control Board issuing a warning that prediction markets may not be limited to sports event contracts only.

During the State Bar of Nevada’s annual Gaming Law Conference held at the Suncoast Hotel & Casino, NGCB Chairman Mike Dreitzer suggested that prediction markets could also introduce "prediction casinos."

The NGCB has been attacking Kalshi in the state and ordered the platform to cease offering sports event contracts. Kalshi won a temporary stay, but this has now been overturned by federal judge Andrew Gordon, an important win for the regulator.

However, the NGCB is not an outlier. On December 4, the Connecticut Department of Consumer Protection sent a cease-and-desist letter to Kalshi, ordering it to stop offering event-based contracts, and running the popular argument that the products offered by the platforms constituted a form of unlicensed sports wagering.

In April, a court sided with Kalshi in New Jersey, following up on a cease-and-desist letter from the New Jersey Division of Gaming Enforcement. Kalshi won a preliminary injunction, allowing it to continue operating its sports event contracts in the state, although the litigation has not ended.

In September, Massachusetts Attorney General Andrea Joy Campbellfiled a lawsuit in Suffolk Superior Court against Kalshi, alleging that the company was promoting and accepting illegal online sports wagers.

Sports betting companies defy watchdogs, embrace prediction markets

One of the biggest surprises this year has not been so much the prediction markets’ determination to continue pushing into the vertical and fight back legal challenges as it has been mainstream sports betting and gaming companies’ decision to break ranks from gaming regulators and push boldly into the sector.

Virtually every company has done it. DraftKings acquired Railbird in October, securing the CFTC-licensed exchange to get skin in the prediction markets game, but there have been bigger surprises still.

FanDuel launched its eponymous FanDuel Predicts standalone app on December 1, spearheading a multi-jurisdictional effort and establishing its presence clearly in the ambitious if somewhat challenged vertical.

Perhaps the biggest surprise of all has been Fanatics, which announced overnight that it is launching in 24 states, offering sports event contracts as well as politics and culture markets. The sportsbook made an abrupt announcement that it is rolling out in the market.

Underdog, another mainstream betting company, pulled the plug on its Missouri launch only days before the official market launch – a decision most likely linked to the state’s opposition towards prediction markets.

DraftKings and FanDuel both tendered their license resignations in November and walked away from Nevada, citing the state’s gung-ho approach to prediction markets. The companies also abruptly quit the American Gaming Association, most likely over disagreement as to whether prediction markets should be embraced.

Prediction markets: it has been a wild ride

What we can reasonably conclude now is that 2025 has been a breakout year for prediction markets. Kalshi and Polymarket soared in value, broke records in trading volume, and pushed into mainstream awareness with TV partnerships and gung-ho market moves.

Regulators have fought back, but the platforms and established sportsbooks have pressed on, swimming against the tide. Legal battles, record growth, and expanding influence show one thing: prediction markets aren’t just here to stay; they are redefining what we experience as "gambling" today and casting it into a new mold.

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