State of Prediction Markets, Q3 2026
Published 2026-11-09
Prediction markets traded $194.1 billion in notional volume between July and September 2026, up 75% on Q2 and the biggest quarter ever. US-regulated exchanges took 89% of it, parlays overtook sports, and card spending data from American Spend shows where the money comes from.
01 $194.1 billion in three months
Prediction markets traded $194.1 billion in notional volume in Q3 2026, up 75% on Q2 and the biggest quarter the sector has ever had. Open interest hit a record, peaking at $2.32 billion. US-regulated exchanges took 89% of notional volume, up from 69% in Q2. Five new US exchanges accounted for $9.1 billion. Exchanges charged an estimated $1.40 billion in trading fees, and parlays were 41% of notional volume but only 20% of fees.
02 Kalshi, Polymarket and the challengers
Kalshi and Polymarket accounted for 91% of Q3 notional volume between them. Kalshi more than doubled to $141.9 billion, driven by parlays. Polymarket US grew 2.4x to $17.3 billion and overtook Polymarket International, which fell 36% to $17.1 billion. The nine US challengers together took 6.8%. Novig was the biggest independent challenger, with $2.08 billion of notional volume from its first 58 days of trading.
03 Search demand
According to Blask, Polymarket and Kalshi each drove more US search demand than any betting brand in Q3, with 8.23 million and 4.77 million searches against Bovada's 3.49 million. Notional volume rose 75% while prediction-market search demand fell 41%. Kalshi's share of US prediction-market search demand rose from 23% to 34% in one quarter, and rose in all 50 states. Polymarket still leads in 43 states, but Kalshi took the lead in its first seven. Novig went from 1% to 12% of brand demand after its Sydney Sweeney ad.
04 Card spending
According to data from American Spend, the 11 states without legal sports betting are home to a third of US adults but accounted for 55% of Kalshi's card deposits in September 2026. 18 to 24 year olds account for 30% of Kalshi's card deposits, about twice their share at DraftKings and FanDuel. Kalshi and Polymarket US took 11% of card deposits into the eight apps we track, up from 3% in Q1 2026. 7 in 8 people depositing into Kalshi by card did not deposit by card into a big sportsbook. Kalshi led card deposits in 16 states in Q3, up from 3 in Q1. Petrit Berisha, editor of Predicted, is an investor in American Spend.
05 What people trade
Sports and parlays made up 83% of US notional volume, and parlays (44%) overtook sports single events (39%). Parlays drove 58% of the growth in US notional volume. In sports, MLB had the most notional volume at $14.3 billion, and Sunday 27 September was the biggest day ever, with $4.27 billion of notional sports volume on an NFL Sunday. Tennis was 30% of US sports notional volume. Kalshi's perps traded $49.3 billion of notional volume in Q3, 5x Polymarket's, including $27.1 billion in September. Kalshi's 15-minute markets traded $19.9 billion, 4.3x Q2. Price markets on commodities, indices and currencies grew about 7x to $1.57 billion. Politics was 0.4% of notional volume but 26% of open interest.
06 Incumbents and giants
Prediction markets became Robinhood's second-biggest trading business. Robinhood customers traded a record 16.4 billion contracts in Q3, 21% of them on Rothera. Coinbase's prediction markets passed $200 million of annualised revenue. 75% of DraftKings' annualised volume came from market makers. FanDuel Predicts doubled its volume to $119 million with 66,000 monthly players, though Flutter says its revenue was not material.
07 Capital
Venture funding was $62 million across nine rounds in Q3, and ProphetX's $35 million round was over half of it. M&A reached up to $1.3 billion, mostly IG Group's agreement to buy Underdog, which had not closed by 30 September. Fanatics bought its own exchange and clearing house from BGC. Kalshi's last closed round valued it at $22 billion and Polymarket's at about $14 billion. SPVs raised $27.8 million for prediction-market equity, a record $20.9 million of it for Kalshi. The number of prediction-market indices rose from 12 to 106.
08 Regulation
Prediction markets were in 122 court cases by 30 September 2026. Courts ruled against prediction markets in 12 states in Q3, and only Minnesota's ban was blocked. The Third Circuit ruled for Kalshi and the Ninth and Sixth Circuits ruled against, so the Supreme Court is next. Rule filings to the CFTC reached 180 in Q3, 1.8x Q2. The CFTC granted three licences, and eleven filings from eight firms are still waiting. 92 SEC filings a month now mention prediction markets.
Questions.
How much was traded on prediction markets in Q3 2026?
Prediction markets traded $194.1 billion in notional volume in Q3 2026, up 75% on Q2 and the biggest quarter ever. US-regulated exchanges took 89% of it.
What share of prediction-market volume do Kalshi and Polymarket have?
Kalshi and Polymarket accounted for 91% of Q3 2026 notional volume between them. Kalshi traded $141.9 billion, Polymarket US $17.3 billion and Polymarket International $17.1 billion.
Where do Kalshi's card deposits come from?
According to data from American Spend, the 11 states without legal sports betting accounted for 55% of Kalshi's card deposits in September 2026, while being home to a third of US adults. 18 to 24 year olds account for 30% of Kalshi's card deposits.
Are parlays bigger than sports on prediction markets?
Yes. In Q3 2026 parlays were 44% of US notional volume and sports single events 39%. Parlays drove 58% of the growth in US notional volume.
How many court cases involve prediction markets?
Prediction markets were in 122 court cases by 30 September 2026. The Third Circuit ruled for Kalshi and the Ninth and Sixth Circuits ruled against, so the question is likely to reach the Supreme Court.
Sources: The Prediction, Artemis, American Spend, Blask, US Census Bureau, Kalshi and Polymarket APIs, Robinhood, Coinbase, DraftKings and Flutter quarterly results, CFTC, SEC EDGAR. Methodology and per-venue tables are in the full report.
