Prediction markets growth moved from a niche market story to a core gambling-industry issue during 2025 and 2026. The available research points to a sharp increase in trading volume, wider platform participation, and closer federal attention from the Commodity Futures Trading Commission. For sports-betting analysts, the key question is not whether these products look like sportsbooks. It is how their structure, liquidity, oversight, and consumer-risk profile should be evaluated against regulated wagering products.
The numbers cited in recent market research were unusually large. KPMG reported that combined trading volume across Kalshi and Polymarket exceeded US$40 billion in 2025, up from roughly US$9 billion in 2024, and that Kalshi reported US$22.9 billion in 2025 trading volume with US$263.5 million in fee revenue KPMG market analysis. That does not make every contract comparable to a sportsbook market, but it does show why operators, regulators, and bettors have been paying closer attention.
Why Prediction Markets Growth Became A Gambling Issue
Prediction Markets Growth And Sports Liquidity
Sports activity has been central to the market shift. Research cited in the user-provided material stated that sports accounted for about 80% of Kalshi trading volume since July 2024 and about 39% of Polymarket volume. Those figures matter because sports contracts can resemble betting markets in how users think about teams, outcomes, pricing, and event timing, even though the legal and market structure can differ from state-regulated sports wagering.
That prediction markets growth also raised comparison questions. A sportsbook usually lists odds, markets, payment rules, account controls, and state licensing disclosures inside a betting framework. A prediction market is built around event contracts, market participants, order books, market-maker activity, and exchange-style pricing. The user experience can feel familiar to a sports bettor, but the mechanics are not identical.
Market depth is one useful lens. A liquid market can support tighter pricing and more efficient entry or exit for participants. A thinner market may show wider spreads, fewer available counterparties, or pricing that moves sharply on limited activity. Those are analytical factors, not signals to trade or bet. They are points readers should review before treating a contract price as comparable to a sportsbook line.
How Volume Changed The Comparison With Sportsbooks
The scale of activity made the comparison harder to ignore. The research notes said that event-contract trading volumes in the United States had expanded sharply by March 2026, with some peak months reaching or exceeding US$25 billion in total volume. Monthly volumes across prediction-market event contracts also reportedly increased from about US$2.4 billion in late 2025 to more than US$9 billion by November 2025.
Those figures should be read with caution. Trading volume is not the same as sportsbook handle, and fee revenue is not the same as gross gaming revenue. A trade can be opened, closed, hedged, or crossed in ways that differ from a standard wager. Still, high volume suggests that event contracts had become a meaningful adjacent product for gambling-market analysts, especially where sports outcomes were a major share of activity.
For readers comparing regulated betting products, related gambling research resources such as a related site in the same network can help organize topics, but the stronger standard is still source quality. Regulatory documents, official operator disclosures, and well-sourced business analysis carry more weight than promotional claims.
CFTC Clarifications And Market Infrastructure
Federal Oversight Signals In 2026
The CFTC took several public steps in 2026 that shaped the discussion. On February 17, 2026, the agency reaffirmed its view of exclusive federal jurisdiction over prediction-market event contracts in a Ninth Circuit amicus brief tied to North American Derivatives Exchange, Inc. and others v. The State of Nevada, according to the research notes. On March 16, 2026, the CFTC issued an Advance Notice of Proposed Rulemaking seeking comment on event-contract derivatives, including core principles, public-interest determinations, and cost-benefit questions.
The agency’s 2026 rulemaking materials addressed event-contract regulation and public-interest review, which placed prediction markets under a more formal policy process CFTC rulemaking document. That did not settle every legal question for every state-linked dispute, and laws vary by jurisdiction. It did, however, give the market a clearer federal reference point than existed before the 2025-2026 expansion.
On August 12, 2026, CFTC Letter No. 26-23 was issued by the Division of Market Oversight, according to the research notes. The letter reminded Designated Contract Markets about regulatory obligations tied to incentive programs, including liquidity, trading, and market-maker programs. That detail matters because market incentives can affect depth, price formation, and participant behavior.
DCM Applications And Entry Strategy
Infrastructure expanded as volume increased. KPMG reported that, since early 2025, the number of applications to the CFTC for Designated Contract Market status had more than doubled, and that seven new DCMs had been approved by August 2026. The same research noted Polymarket’s U.S. re-entry and Gemini’s first prediction-market license in that context.
For sportsbook operators, exchanges, and technology firms, DCM status can be viewed as a market-access pathway rather than a simple product launch. It involves federal oversight, compliance obligations, surveillance expectations, and operational controls. That differs from a sportsbook model in which state licensing, geolocation, responsible-gambling rules, and operator-specific terms are usually the front-line framework for consumers.
Readers tracking the policy side can compare this issue with prediction market regulation signals, especially where state sports-betting agencies and federal derivatives oversight appear to overlap. The status of specific products can change, and access should not be assumed across jurisdictions.
Sports Contracts, Non-Sports Categories, And Market Depth
Sports Still Drove A Large Share
Sports contracts have received much of the public attention because they sit closest to traditional betting behavior. Team outcomes, season awards, game results, and tournament-linked questions can be easy for sports bettors to understand. That familiarity can support adoption, but it can also create confusion if users assume that exchange-traded event contracts follow the same protections, dispute process, or promotional rules as a licensed sportsbook.
A careful comparison should separate odds availability from contract availability. Sportsbooks can offer pregame, live, prop, futures, same-game, and parlay products depending on state approval and operator policy. Prediction markets may offer binary or otherwise structured event contracts, with price discovery shaped by participants and liquidity providers. Those differences affect how users interpret price, probability, spread, and exit options.
Non-Sports Categories Added Breadth
The research notes also stated that non-sports categories, including crypto events, economic releases, and culture-related markets, were growing faster than the broader market, even though sports contracts still dominated total volume. That is a significant market-depth signal. A product category that expands beyond sports can attract different participants, different information sources, and different trading patterns.
For gambling-sector analysis, the distinction matters. Sports betting demand is tied to calendars, leagues, player availability, and event schedules. Non-sports event contracts may respond to macroeconomic releases, digital-asset activity, political developments, or media cycles. That can change peak-volume timing and reduce direct comparability with sportsbook handle. It can also create new consumer-protection questions if users do not understand the subject matter behind a contract.
| Review Area | Why It Matters | What Readers Should Check |
|---|---|---|
| Liquidity | Shapes spreads and exit flexibility | Order-book depth, recent activity, and price movement |
| Regulation | Defines oversight and dispute channels | DCM status, CFTC materials, and jurisdiction limits |
| Sports Exposure | Affects similarity to betting products | Contract type, settlement rules, and event source |
| Incentives | Can influence trading behavior | Market-maker programs and disclosed liquidity terms |
| Responsible Use | Supports informed account control | Limits, records, support access, and risk warnings |
Responsible Gambling Context For Event Contracts
Why Similar Products Can Carry Different Risks
Prediction markets growth has created a consumer-education challenge. A user familiar with point spreads or futures odds may see a contract price and interpret it as an implied probability. That can be analytically useful, but it can also hide differences in settlement, liquidity, fees, and exit timing. A contract that looks simple at the surface can carry operational details that deserve review.
Responsible gambling analysis should not stop at slogans. Users should be able to find account history, transaction data, market rules, settlement criteria, fees, and support resources before committing funds. If an event contract is sports-linked, the user should also understand whether the product is overseen as a derivatives contract, a state wagering product, or another regulated structure. That answer can depend on the product and location.
- Check whether the platform clearly explains contract settlement, fees, market rules, and account controls.
- Compare market depth and spread behavior rather than treating volume alone as a quality measure.
- Review responsible-use tools, support access, and records before relying on promotional material.
What Bettors Should Evaluate Without Treating This As Advice
For bettors who study markets, the right frame is evaluation, not encouragement. No contract, sportsbook line, or market structure removes risk. Prices can move quickly, liquidity can change, and regulatory access can vary. A platform with high volume may still have a contract that is thin, volatile, or hard to exit at a preferred price.
The same caution applies to bonuses or trading incentives. The CFTC’s August 2026 advisory focus on incentive programs, as reflected in the research notes, shows why promotional mechanics deserve scrutiny. Incentives can support liquidity, but they can also affect how markets behave. A user-facing review should ask who benefits, how the program is disclosed, and whether the market remains understandable to ordinary participants.
Prediction Markets Growth And Sports-Betting Risk Review
Prediction markets growth after the CFTC’s 2025-2026 posture shift was supported by large reported volume, more DCM interest, sports-heavy usage, and expanding non-sports categories. The evidence available through August 2026 showed a market gaining scale and institutional structure, not a product class with settled consumer questions.
The most useful analysis treats these markets as adjacent to sports betting but not interchangeable with it. Sportsbooks, exchanges, and event-contract platforms can all express views on outcomes, yet they differ in pricing mechanics, legal oversight, liquidity, settlement, and user protections. For gambling-industry readers, that difference is the core analytical point.
Prediction markets growth is best read as a signal to examine regulation, market depth, odds-like pricing, and responsible-use controls with more care. The reported US$40 billion-plus combined 2025 volume across Kalshi and Polymarket showed scale. The CFTC’s 2026 actions showed active oversight. The remaining task for analysts is to separate measurable market development from promotional claims, especially where sports contracts sit close to traditional betting behavior.