Pew Research: Prediction Market Volume Doubled May-July, Sports Now Largest Category
Pew Research Centre published an analysis on September 23 finding that combined monthly trading volume on Kalshi and Polymarket doubled from $26 billion in May to $53 billion in July 2026, driven by sports contracts. Sports is now the largest category on both platforms. The FIFA World Cup drove Kalshi to $58 billion in monthly sports volume in June-July. Americans wagered roughly $40 billion at licensed sportsbooks in Q1 2026 — roughly matching prediction market sports volume in the same period.
The Pew Research Centre published an analysis on September 23 documenting the acceleration of prediction market trading through summer 2026. Combined monthly global trading volume on Kalshi and Polymarket rose from $26 billion in May to $53 billion in July — a doubling in two months — driven primarily by sports contracts. The FIFA World Cup in June and July generated Kalshi's largest sports volumes to date: $58 billion in monthly sports contract volume in the World Cup months, and Polymarket nearing $22 billion. Pew noted that prediction market volume has quadrupled over the past two years. This is the first major independent research institution to quantify the sector's growth with platform-level data.
For UK readers, the relevant comparison is with the UK's regulated betting exchanges and sports betting market. The UK gambling market — one of the world's largest per capita — processes roughly £12 billion in annual sportsbook gross gaming revenue. Prediction market sports volume, now exceeding $50 billion per month, is a different measure (traded contract value rather than net stakes), but the scale comparison illustrates that the US prediction market sports sector has grown to rival or exceed the largest regulated gambling markets in the world in terms of total financial flow through the system. The Gambling Commission, which does not currently regulate US prediction markets, is monitoring whether EU-accessible platforms create any exposure for UK-licensed operators — a question that has not yet produced enforcement action but is under review.
The comparison with US licensed sportsbooks is the Pew report's most policy-relevant finding. Americans wagered approximately $40 billion at legal sportsbooks in Q1 2026 — roughly matching prediction market sports trading volume in the same period. The two measures are not directly comparable (sportsbook handle is total wagered; prediction market volume is total contract value traded), but the order-of-magnitude similarity supports the state AGs' argument that prediction market sports contracts serve overlapping demand with licensed sports gambling products. For a state AG trying to demonstrate harm to the licensed sports betting industry — which pays significant licensing fees and taxes — the Pew volume data is useful evidence that prediction markets are diverting economically significant activity from the licensed framework.
Pew's separate finding on trader profitability is notable: most prediction market sports traders break even or post small losses across nearly 12,000 accounts analysed. The finding weakens the gambling harm argument (the loss distribution is different from a casino product where most participants lose) and subtly complicates the wisdom-of-crowds claim (if most participants break even, the aggregate probability accuracy may be driven by a small number of sophisticated traders rather than broad-based collective forecasting). Neither finding is dispositive in the legal debate — CFTC's preemption argument does not depend on whether traders profit — but both are useful data points for calibrating the policy discussion in terms of actual economic outcomes rather than theoretical harms.
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Recent updates
Kalshi's Parlays Drive Back-to-Back $5B Days — and Hand Critics Their Strongest Argument
Kalshi traded a record $5.33 billion on November 7 and $5.36 billion on November 8, with multi-leg parlay-style 'combos' making up roughly 75% of both days' volume. Its 30-day volume topped $100 billion. But the parlay dominance cuts against the platform's legal defence: parlays are a quintessential sportsbook product, and the American Gaming Association has told the Second Circuit that parlays make up about two-thirds of Kalshi's volume and should be treated as sports bets. The implied house edge on 10-plus-leg combos is around 25%, undercutting the argument that these are neutral financial instruments rather than gambling.
Cruz Bill Would Require State or Tribal Approval for Sports Contracts — a Bipartisan Legislative Threat Emerges
Senator Ted Cruz, who chairs the Senate Commerce Committee, is preparing a bill that would bar federally regulated prediction markets from offering gambling-tied event contracts, including sports, unless a state or tribal government authorises them. It would not ban the contracts nationwide but would require platforms to obtain approval jurisdiction by jurisdiction, resembling state-by-state sportsbook regulation. The proposal arrives as Democrats take control of both chambers after the midterms, creating a potential bipartisan reckoning for a sector that had relied on federal protection.
CFTC Tells Platforms to Stop Geofencing States — Directly Colliding With State Court Orders
The CFTC issued an interpretation on November 5 of its 'impartial access' core principle, telling regulated exchanges including Kalshi and Polymarket to drop state-by-state geographic blocks within 30 days or explain why they cannot. The demand collides head-on with existing state court orders requiring the platforms to geofence: Washington ordered Kalshi to geofence in August, and Michigan ordered it to use licensed geolocation to block the state in September, with a $500,000 daily fine for violations. Chairman Michael Selig framed the interpretation as a uniformity requirement. The platforms are now caught between a federal demand to unblock states and state court orders to block them.