Prediction Markets 2026: Who’s Rising Beyond Polymarket

Prediction markets are undergoing a "power shift": beyond Polymarket, the compliant platform Kalshi is capturing market share with explosive growth, while traditional traffic giants like Robinhood and Meta are stepping in, absorbing prediction markets as embedded platform features. The competitive logic in this space has shifted from "who can build a better prediction platform" to "who can stuff prediction functions into bigger entry points."

Kalshi: Explosive Growth on the Compliant Track

The most striking change in prediction markets in 2026 is that Kalshi has surpassed Polymarket in both trading volume and valuation.

Volume overtakes: As of June 2026, Kalshi's monthly trading volume reached $17.9 billion, commanding approximately 57% market share, while Polymarket's monthly volume dropped to roughly $7.1 billion. Kalshi generated $10 billion in volume in just the first two weeks of June 2026, compared to $435 million in the same period last year. Its annualized revenue has surpassed $2 billion, roughly tripling in size since November 2025.

Stunning valuation leap: Kalshi's valuation has jumped from $2 billion → $11 billion → $22 billion → $40 billion within a single year. In May 2026, Kalshi closed a $1 billion funding round (led by Coatue, Sequoia Capital, a16z, Morgan Stanley) at a $22 billion valuation; it immediately began seeking a new round at a $40 billion valuation.

Growth drivers: Sports event contracts currently account for about 65%-70% of Kalshi's volume, with the World Cup and NBA Playoffs serving as key catalysts. Kalshi has partnered with platforms including Robinhood, Coinbase, Webull, and Interactive Brokers, and these distribution channels are delivering enormous traffic.

Polymarket: Spending $112 Million to "Buy a Ticket" Back to the U.S.

Polymarket's strategy is to solve the compliance problem through an acquisition, but at a steep price.

The compliance path: In 2022, Polymarket was forced to block U.S. users after the CFTC charged it with operating an unregistered derivatives platform. In July 2025, Polymarket spent $112 million to acquire QCEX — an exchange and clearinghouse holding CFTC licenses — thereby obtaining DCM (Designated Contract Market) and DCO (Derivatives Clearing Organization) licenses, bypassing years of federal approval processes.

Institutional endorsement: The parent company of the New York Stock Exchange, Intercontinental Exchange (ICE), subsequently committed $2 billion to Polymarket and will integrate its data into ICE's financial terminals. Polymarket has held talks about raising funds at a $15 billion valuation, though its U.S. version remains in an invite-only testing phase.

Market performance: Polymarket still holds advantages in liquidity depth for political and crypto events and leads in cumulative volume, but its user growth is relatively steady (peak monthly active users around 700,000), while Kalshi's monthly actives have surged from 600,000 to over 5.1 million.

Robinhood: Turning Prediction Markets into a "Trading Module"

Robinhood is currently the most successful example of a "traffic platform entrant" — it did not build a standalone prediction platform; instead, it directly embedded event contracts into its existing trading app.

In 2025, the Robinhood platform cumulatively traded over 12 billion event contracts; as of May 2026, that figure reached approximately 16 billion. In Q1 2026, event contract trading drove "other transaction-based revenues" up 320% year-over-year to $147 million. Bernstein estimates that Robinhood's 2026 prediction market revenue will reach roughly $586 million.

More critically, Robinhood is no longer content to be merely a distribution channel for Kalshi. It has launched a proprietary prediction market product, Rothera (a joint venture with Susquehanna International Group), and has started routing some World Cup orders away from Kalshi to its own platform.

The Next Variable: Meta's "Arena" and More Traditional Players

The prediction market app Arena, which Meta is developing, is seen as a potential disruptor of the industry landscape.

Design differences: In its initial phase, Arena will use a "points" mechanism (similar to video games) rather than real-money wagering, primarily targeting young users aged 18-34, with a goal of surpassing 100 million monthly active "forecasters." Meta has not ruled out introducing real money in the future, but adopting a points-based approach first is clearly aimed at avoiding regulatory conflicts.

Other entrants:

• CME Group: Partnered with FanDuel to launch the FanDuel Predicts platform, bringing event contracts to the retail market.

• DraftKings: Launched DraftKings Predictions in late 2025, entering CFTC-regulated prediction markets.

• Interactive Brokers: Integrated event contracts from Kalshi, CME Group, and ForecastEx into a unified account.

• Interactive Brokers (IBKR) has onboarded Kalshi's event contract services.

Regulation: The Biggest Uncertainty

Although Kalshi won a key battle at the federal level (the federal court overturned the CFTC's ban on election contracts in September 2024), the state-level legal war is far from over. Arizona has filed criminal charges against Kalshi, a Massachusetts judge banned its sports markets, and Kentucky sued both Kalshi and Polymarket this month, calling them "illegal sportsbooks."

Meanwhile, the CFTC has sued in federal court over Kalshi's approval of perpetual futures contracts, and CME Group has also filed a lawsuit. A federal judge in Michigan recently ruled that "sports prediction markets are not swaps" — contradicting the CFTC's stance, and the dispute is highly likely to ultimately end up before the Supreme Court.

FAQ

Q: What is the core difference between Polymarket and Kalshi? Polymarket is crypto-based (settled in USDC, operating on the Polygon blockchain). After being pushed out of the U.S. by the CFTC in 2022, it returned with a compliant identity by acquiring QCEX. Kalshi is a CFTC-regulated federal exchange, settled in U.S. dollars, and can connect directly to the American banking system without touching cryptocurrency.

Q: Why is Kalshi growing so fast? Two core reasons: First, the explosion of sports event contracts (accounting for roughly 70% of volume), with the World Cup and NBA Playoffs bringing a flood of new users. Second, distribution channel expansion — platforms like Robinhood, Coinbase, and Webull embed its event contracts, driving massive traffic.

Q: Are these platforms accessible from China? No. Neither Kalshi nor Polymarket is regulated by Chinese authorities, and domestic users cannot access them directly. This article is for industry observation only and does not constitute any investment advice.

Next Steps

If you want to track where prediction market competition is heading, watch three time windows: Q3 2026 — whether Kalshi's new $40 billion valuation funding round materializes; second half of 2026 — whether Meta's Arena officially launches; end of 2026 to 2027 — the potential IPO window for Kalshi (company executives have indicated an IPO as early as late 2027 or 2028).