The trading volume on the leading prediction markets platforms, Polymarket and Kalshi, has hit a new record high, surpassing the previous peak reached during the US presidential election last year.
The recent jump in trading activity offers one of the clearest indications yet of the growing excitement around the exchanges that allow investors to bet on the likelihood of real-world events, just as financial firms like CME Group Inc. and Intercontinental Exchange Inc. look for a way into these hot markets.
Kalshi and Polymarket saw notional trading volume rise above $2 billion for the first time, during the week ending Oct. 19, according to publicly available data collated by the user dunedata on Dune Analytics. That figure eclipses the frenzied trading seen during last year’s US presidential election, when the two platforms first entered the financial mainstream.
The growth over the past two months has been driven in large part by the popularity of sports betting on the New York-based exchange Kalshi, which has used its financial license to offer gambling nationwide, in defiance of state gaming regulators. But betting on politics, cultural events and economic indicators has also generally been trending up.
These platforms have captured the attention of sports gamblers, retail investors and professional traders by blurring the line between speculation and information.
To their backers, prediction markets are the next step in the democratization of trading — crowdsourced probability engines that reveal sentiment faster than polls or analysts. To critics, they are simply financialized entertainment, built on the same adrenaline loops that have fueled meme stocks and crypto tokens.
Sports-focused bets were the top category on both platforms last week, pulling in $867 million in trading on Kalshi and $415 million on Polymarket, which is not legally available to US customers. The return of college football in August and the NFL season in September prompted a significant uptick in volumes across both platforms, but particularly on Kalshi, where a partnership with trading app Robinhood Markets Inc. has drawn in new users.
In prediction markets, customers purchase contracts that will settle at either zero or $1 after the event in question is resolved. The figures on Dune capture notional volume — a measure that counts one side of each trade — to make volumes on the two exchanges more directly comparable. Polymarket’s data is sourced from its public blockchain, while Kalshi’s comes from exchange disclosures.
A Kalshi spokesperson confirmed the dashboard data for its platform was accurate. A Polymarket spokesperson said the data was the best available publicly, adding that “there are always nuances to it.”
Betting surrounding the US election supercharged growth on Polymarket and Kalshi last year, after Kalshi won a lawsuit against its regulator, the Commodity Futures Trading Commission, that allowed it to legally open trading on who would win the presidential vote.
Traders on both exchanges gave President Donald Trump high odds of winning, and Trump and his family embraced the nascent industry, with Donald Trump Jr. joining both companies as an adviser.
It was previously assumed that sports betting would be prohibited by the CFTC, which oversees Kalshi. But after Trump won the election, another player in these markets, Crypto.com, opened trading on sports, and Kalshi followed suit.
Several state gaming regulators have claimed that Kalshi’s markets run afoul of their laws. But Kalshi has fought back in court and other financial firms are now looking to enter the fray.
The exchange giant CME is planning to introduce contracts tied to sports games, Bloomberg reported last week. The owner of the New York Stock Exchange, ICE, recently announced that it is investing $2 billion for a stake in Polymarket.
Polymarket currently bars US customers after previous legal tangles with US regulators, but it is now planning to re-enter the US and recently purchased a CFTC-regulated derivatives exchange, QCX.
The expansion into sports has hit the shares of online gambling platforms like DraftKings Inc. and FanDuel owner Flutter Entertainment Inc., which generally only operate in states where gaming regulators allow it.
Kalshi made a further push into the business when it recently debuted parlays, low-odds wagers on a series of outcomes bundled together
While Polymarket was the larger of the two rivals, the boost in sports betting pushed Kalshi above Polymarket in overall notional volume in late August, data showed. Polymarket reclaimed the crown last week, with sports volumes more than doubling relative to a month earlier.
Some users reported technical issues when attempting to trade on Kalshi on Oct. 18, during peak hours for Saturday football games. The same Kalshi spokesperson said the exchange had encountered data loading delays “due to extreme demand,” but that its back-end exchange remained online throughout. The issues have since been resolved, they added.
