MW In 2024, prediction markets called the presidential election before the polls could. Now, they're mostly betting on sports.
By Gordon Gottsegen
Prediction markets saw exponential growth in 2025 - and things are just getting started
About 90% of Kalshi's volume has come from sports contracts in recent months.
In late 2024, prediction markets seemed poised to take over the world. Thanks to a big win in a court case against the Commodity Futures Trading Commission, prediction-market company Kalshi was able to offer event contracts that allowed its users to wager money on the U.S. election.
Soon after, prediction-market competitors and online brokerages began offering their own election markets too. Kalshi began taking out digital ads to show how its election markets were moving in real-time. High-profile and politically motivated celebrities began citing prediction markets' odds. Billions of dollars were bet on the election, and the companies hosting these markets walked away with millions. Thomas Peterffy, the founder of Interactive Brokers $(IBKR)$, said that prediction markets would be bigger than the stock market within 15 years.
"I expected [prediction markets] to overtake the [stock] market in 15 years, but now my expectations have come down by half," Peterffy told MarketWatch last year - saying he had moved that forecast up to within five to seven years. "I always thought that it would grow quickly, but I didn't expect it to grow this quickly."
In 2025, prediction markets saw exponential growth, and Petterffy's forecast came closer to becoming a reality. However, while prediction markets allowed people to bet on anything and provided valuable insight into unknown future events, they became more and more about one thing: sports.
Sports-related prediction markets have been the fastest-growing vertical for many prediction-market companies. While the markets tied to the 2024 presidential election garnered huge volumes, sports prediction markets have blown those numbers out of the water. And the growth goes beyond sheer volume: Prediction-market operators have prioritized sports via partnerships and product expansions.
That could keep the ball rolling for future growth for these companies - or it could pose an existential risk.
By the numbers
Kalshi's "Who will win the Presidential Election?" market is still the platform's largest prediction market by volume, with almost $536 million traded. Other markets tied to the 2024 election drew huge numbers. For example, the "Popular vote margin of victory?" market saw almost $135 million in volume, making it Kalshi's second-largest market by volume to date.
Overall, Kalshi's total volume hit $1.27 billion in November 2024, according to data compiled on Dune by datadashboards based on official Kalshi numbers. (Kalshi confirmed to MarketWatch that this data was accurate.) Of that $1.27 billion in volume, $1.13 billion (roughly 89%) came from markets tied to politics and elections. Breaking down that month by transactions instead of volume, November 2024 saw 2.7 million monthly transactions, with 1.8 million (roughly 67%) coming from politics and elections markets.
November 2024 was a huge month for Kalshi, but that volume spike was somewhat temporary. Kalshi saw $280 million in volume in October 2024; volume then jumped to $1.27 billion that November, before it came back down to $226 million last December. While this represents the sheer amount of dollars trading on the Kalshi platform, the number of transactions tells a somewhat different story: Kalshi saw 460,388 transactions in October 2024, 2.7 million in November, and then about 1 million transactions in December. This shows that people kept trading on the Kalshi platform after the election - just not as much, and with less money.
Kalshi's monthly volume stagnated for a bit after the election, while transactions dipped immediately but grew steadily over the following months. However, growth started to pick up when Kalshi began rolling out sports markets.
When breaking down Kalshi's monthly volume by category, sports are the largest driver.
Kalshi launched prediction markets tied to the NFL's Super Bowl in January 2025. It then rolled out markets for college basketball's March Madness tournament. In February 2025, sports-related prediction markets generated about $37 million in volume, barely beating out crypto markets to become the second-largest category by volume, behind politics.
However, sports blew the other categories out of the water in March 2025. Thanks in part to March Madness, sports-related prediction markets generated about $406 million in volume that month. That was more than 10 times the previous month, and accounted for roughly 78% of Kalshi's total volume. The sports category's dominance continued for the next few months, as sports-related prediction markets generated an average of roughly $525 million in monthly volume over the next five months. Other categories never exceeded $100 million in monthly volume during that time.
Then, in September 2025, the training wheels came off. Thanks to the start of the NFL season, Kalshi saw $2.86 billion in monthly volume, with $2.56 billion coming from sports alone. Monthly volume grew to $4.4 billion in October 2025, and $5.8 billion in November 2025. Again, most of this came from sports, with $5.26 billion of November's volume (about 91%) tied to sports contracts.
Sports pushed Kalshi to overtake its competitor Polymarket as the largest prediction-market operator by volume in the third quarter of 2025. But in 2024, Polymarket's volume around the U.S. election far outpaced Kalshi. In November 2024, Polymarket saw $1.31 billion in monthly volume, according to datadashboards on Dune, slightly higher than Kalshi's volume that month. Polymarket's monthly volume dipped after the election, but it picked back up to $1.51 billion in October 2025 and $1.88 billion in November 2025.
Polymarket did not respond to a request for comment.
Polymarket also saw a spike in volume tied to the 2024 election, which tapered off before rebounding a few months later.
Although Polymarket and Kalshi are competing prediction markets, there are some differences between the two. For one, Kalshi worked to get CFTC certification early in its existence, which allowed the company to offer its event contracts to traders in the U.S. from the beginning. Polymarket, on the other hand, did not start with CFTC permission, which caused it to get banned from operating in the U.S. in 2022.
This has resulted in different customer demographics for the two operators. Kalshi is mostly used by traders in the U.S. because it wasn't available internationally until somewhat recently. Meanwhile, Polymarket's user base is mostly international, with the company's U.S. offering currently rolling out to customers on its wait list.
Read: Polymarket authorized for U.S. return just days after Donald Trump Jr. joins as adviser
Also, the politics category is still Polymarket's most active; crypto-related prediction markets come in second, and sports-related prediction markets are third. But Polymarket seems to be aware of the potential for growth via sports: The company has signed a partnership with the NHL, and used sports as a focal point in advertising its U.S. launch. Sports may allow Polymarket to catch up after it lost its lead to Kalshi.
As volumes have grown for these two companies, so have their valuations. Kalshi raised $1 billion in funding at a $11 billion valuation in December, just a month after the company raised $300 million at a $5 billion valuation. In January 2025, Polymarket raised $150 million at a $1.2 billion valuation, and in October, it raised $2 billion at an $8 billion valuation. Polymarket is also reportedly looking for more funding at a valuation up to $15 billion.
New entrants
Although Kalshi and Polymarket are two of the largest prediction markets, other institutions have expanded into the space - including Interactive Brokers and Robinhood Markets (HOOD).
Interactive Brokers launched its dedicated prediction-markets platform ForecastEx in the summer of 2024, and saw its volume take off around the 2024 election, with over 305 million contracts traded in its presidential election market. Interactive Brokers told MarketWatch that its total prediction-markets volume dropped off after the election and remained muted for months. However, volume has picked up in the past two months, and the company said it now sees roughly 3 million contracts traded a day.
Robinhood launched its first prediction-market product for the 2024 presidential election; in just a week, it saw over 200 million contracts exchange hands. Since then, prediction markets have become Robinhood's fastest-growing product line by revenue, with Robinhood customers trading 11 billion contracts since the launch, according to numbers shared by the company on Dec. 16. That's a lot - but still less than the 14 billion Polymarket has seen in all-time cumulative volume, and the roughly 22 billion contracts for Kalshi as of Dec. 19. Granted, both Polymarket and Kalshi have been offering prediction markets for longer than Robinhood.
Still, Robinhood's prediction-markets business is larger than that of Interactive Brokers. Part of this has to do with the fact that Robinhood has more users - about 26.9 million funded customers versus 4.3 million for Interactive Brokers, as of this month.
But another part of this difference has to do with the fact that Robinhood has embraced sports contracts. After the election, Robinhood's second prediction-markets offering was tied to the Super Bowl; then came its March Madness contracts. Although Robinhood would not share how much of its volume comes from sports, the company has leaned into sports with several new product launches. These include a recently announced "combo" feature that allows users to combine sports wagers - similar to a parlay - and a live-sports contract hub.
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December 20, 2025 07:30 ET (12:30 GMT)
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