Prediction markets are going mainstream in 2026, with billions in trading volume and a growing base of regular users. If before it was driven only by elections, now sports, crypto, macroeconomic events, tech and pop culture generate steady activity.
According to Pew Research Center analysis of The Block data, Polymarket and Kalshi experienced a rise in trading volume from below $5 billion in September 2025 to nearly $24 billion by April 2026.
This number is double the $14 billion average monthly turnover among legal US sportsbooks. Sports, politics and cryptocurrency are the most popular areas of trading in both platforms, but the respective volume shares of these categories differ. On Kalshi, for instance, sports accounts for 80% of trading volume, while on Polymarket sports accounts for 39%, with cryptocurrency mixed with politics taking 52% of the volume on Polymarket.
In the article, we will examine the key trends influencing the prediction markets rise, the prospects of its growth and what’s coming next in 2026.
What are prediction markets: Quick refresher
Prediction markets allow to trade contracts relating to the results of upcoming events. The value of contracts in these markets reflects the opinion of the market players about the event’s chances of occurrence. For instance, if a market is valued at $0.78, it indicates a 78% probability of the specified event occurring. If the event does happen, then participants would receive a payout of $1. And if it does not happen, the stake would be forfeited.
Currently, Polymarket is one of the most popular prediction markets for predicting different events, one of the major features of the platform being availability of trading via mobile phone, using a crypto wallet. The platform has already set the record for transaction volume in a single day, amounting to $425 million.
Are prediction markets gambling or not?
This is the question that has sparked a major cultural and legal controversy lately. Prediction markets are not considered as gambling in United States. They are under CFTC regulation and are treated as financial markets offering so-called ”event contracts”.
However, this interpretation is far from being settled. Opponents of these schemes, which include almost all states, assert that the sports markets on such platforms are not much different from gambling, while New York and Wisconsin have already made their first attempts to prove prediction markets unlawful under state law.
The courts are still divided over this matter and there is no clear solution expected anytime soon.
The uncertainty is not limited just to the United States. Regulators in other countries seem to be classifying prediction markets as gambling products instead of financial instruments. For instance, in South Korea, law enforcement authorities have started looking into users of Polymarket for allegations of illegal gambling, making clear that the risk of being penalized is not only typified by the platforms but also those trading. Meanwhile, in the Netherlands, regulators are already taking concrete measures against the platform, with Polymarket having to pay a €420,000 fine to the Dutch regulators for not leaving the market in time, suggesting that in Europe the authorities are going to impose similar compliance measures on prediction markets, like those imposed on gambling institutions.
With courts and regulators both within the United States and abroad divided in opinions, it seems that the question of whether prediction markets are gambling or trading will lead to extensive judicial proceedings, possibly reaching the Supreme Court.
Prediction markets are going mainstream: What’s happening so far?
As of 2026, the momentum for prediction markets keeps on increasing at an astonishing rate as seen in the first week of January with the volume reaching $5.4 billion while in the first week of April 2026 the trading reached an all-time high of $6.5 billion. It is likely that the volume of the market is going to increase five times in 2026 in comparison to 2025 with a weekly value of $25 billion among all categories and platforms.
Due to its origin as an election forecasting tool, prediction markets are frequently cited these days as new honest machines and regarded as one of the most accurate forecasting systems available on the market.
According to Brier probability scores, prediction markets are at about 0.09 meaning that it is possible to consider them much more accurate in comparison with polls, expert opinions or models of weather forecasting. Prediction markets are gaining popularity as an accurate forecasting tool among experts in politics, business, finance and media.
Prediction market platforms are penetrating into the traditional financial markets with Kalshi seeing its market valuation doubling and growing from $11 billion in late 2025 up to $22 billion of the completion of the fundraising round of $1 billion in March 2026 and Polymarket observing its value moving to $15 billion instead of $9 billion in late 2025.
Analyzing prediction markets for 2026, it is already becoming obvious that this will be a long-term trend, not just a passing phenomenon. Aside from figures, it is important that more and more people are describing different reasons for the increasing number of people who keep coming back to prediction markets. The platform’s credibility has already been tested from the inside: a group of traders filed a lawsuit against Polymarket over a contentious settlement in the Bitcoin market, raising questions about how disputes are resolved. In politics, prediction markets remain very popular. In sports, the markets can be an entry point. In the case of crypto, macro, AI and pop culture, there has been a much higher flow in the market calendar.
The industry finds itself in a very good position. It is presently situated at the crossroads of gambling, finance, media and public opinion. This creates many business opportunities, but at the same time, it brings regulation, ethics and platform trust to the front of interpretation.
What is next: Prediction market trends for 2026
In the last 12 months, the prediction markets have transformed from a specialist application in the cryptocurrency sector into a full-fledged financial ecosystem responsible for more than $20 billion in trading volume each month.
With on point regulations in place, institutional investments are entering the field. The development of more sophisticated platforms for institutional investors is attracting more institutional money into the field. The development of AI technologies is speeding up the price discovery process. At the same time, decentralization is making these markets accessible to everyone around the world.
- Fast institutional cash: When it comes to institutional cash, this has potentially been the biggest game changer. Now, major players are more than happy to use event contracts to hedge their risks on the real market: Kalshi’s yearly revenue has been tripling every year since last November, reaching almost two billion at a present time! The experts from Wall Street are even more optimistic about the future as Bernstein states, the prediction market volume could amount to $1 trillion by 2030, surging from around $51 billion from last year’s results to an anticipated $240 billion by the end of this year.
- AI trading: Artificial Intelligence is increasingly being implemented in the functioning of the platforms rather than affecting the trading process. Kalshi has obtained an AI agent to process certain elements of its market, including the wording of its predictions. Meta is taking things a step further with the development of the “Arena” app that will possibly employ its recently developed Llama model for generating the markets based on the latest trends and processing them.
- Involvement of big companies: Meta’s entry means something greater. By making a move, large technological companies have switched from being mere observers to direct participants in this game. It’s been reported that Meta is working on creating a separate application that will directly compete with Kalshi and Polymarket and will employ gaming money rather than real funds avoiding some laws.
- Sports overtaken politics: Sports have surpassed politics as far as being the major contributor to trading volume is concerned. For example, Kalshi saw that 87% of its $11.39 billion trading volume for March 2022 came from trades based on sports events. Similarly, Polymarket’s World Cup markets ranked among the biggest producers of spikes of the year in terms of trading volume.
- Regulatory clarity: Recently, Kalshi requested to prevent New York’s regulators from enforcing gambling laws for sports-related contracts, which was rejected by New York court. Michigan courts have similarly moved against the platform, temporarily blocking Kalshi from operating in the state. This shows that regulation is becoming bold rather than more stringent. For example, this year Polymarket received CFTC approval allowing it to onboard American brokers directly which gave it the capability to achieve rapid growth. Polymarket still sues some states for gambling laws against its platform, but this is also big point on how the regulatory changes are in the process. Internationally, the picture is similarly mixed.
- New categories: At the same time, the emergence of new categories also contributes to the completion of the picture. Various technology and science-related markets are becoming really popular this year, whereas culture-related markets are also developing fast.
FAQs about prediction markets
What’s the difference between prediction market and sports betting?
Prediction markets and sports betting are two models for different types of players. If you love sports and the adrenaline rush from live betting, traditional sports betting is for you. If you want to bet outside of the sports and leave the game at any time, prediction markets are for you.
Are prediction markets legal?
In the USA prediction markets are legal and the CFTC oversees them as financial event contracts. Unfortunately, different states have changed the legality of prediction markets, which results in a situation whereby Kalshi and Polymarket have engaged in legal battles against state regulators, asserting that the federal law supersedes state gambling laws. Kalshi cannot operate in Michigan, meanwhile, Polymarket has decided to sue the state of New Mexico based on its regulation of prediction markets. Globally the situation is less optimistc. In fact, Kalshi has exited India comprehensively as Europe continues the pursuit against prediction markets.
Which is the best prediction market?
Kalshi is seen as the most reliable prediction market among users in the United States since it helps them abide by regulatory standards, has efficient fiat-to-USD banking processes and offers a good combination of predictions covering a broad range of industries including finance, weather and political forecasts. However, for worldwide participants involved in cryptocurrency, Polymarket stands out as the leader of transaction volume and liquidity around the globe while its operations are obviously decentralized with all transactions settled competitively in USDC on Polygon blockchain.