What is a prediction market?
A prediction market is an exchange where people trade on what will happen. Each contract pays out if an event occurs and expires worthless if it does not, so the price it trades at is the crowd's estimate of the odds.
How the price becomes a probability
Take a contract that pays $1 if a team wins a match. If it trades at 62 cents, the market is saying there is roughly a 62% chance the team wins. Buy at 62 cents and you make 38 cents if you are right and lose 62 cents if you are wrong. Someone on the other side holds the mirror position. When news breaks, traders move the price, and the probability updates with it. That is the whole idea. Prices carry information because people put money behind them.
Where you can trade
Two venues dominate. Kalshi is a US exchange regulated by the Commodity Futures Trading Commission, settles in dollars, and lists everything from interest rate decisions to sports. Polymarket runs onchain, settles in stablecoins, and grew up around politics and crypto before adding sports and a separate US product. Between them they took 91% of notional volume in the second quarter of 2026. Behind them sit Robinhood's Rothera, DraftKings, Hyperliquid, Limitless, ForecastEx and a long tail of onchain venues, plus the brokers and clearing houses that route to them.
How they differ from betting
A sportsbook sets the line and takes the other side of your bet. A prediction market does neither. It matches buyers with sellers, charges a fee on the trade, and lets you sell out before settlement. The house has no view on the outcome, only on volume. That structure is why a bar can hedge a free drinks promotion on the Knicks, and why a football club can hedge relegation. Both happened in 2026.
Why the numbers matter
Prediction markets traded $111 billion in notional volume between April and June 2026, more than 2024 and 2025 combined. Robinhood made more from them than from crypto or stocks in the same quarter. Kalshi raised at a $22 billion valuation. Coinbase, Kraken, Crypto.com, DraftKings and FanDuel all bought or built their way in. Regulators and courts are still deciding how sports contracts fit inside commodities law. That is a market being built in public, which is what makes it worth covering.
How Predicted covers it
Predicted is a free weekly newsletter on the business of prediction markets. Every Monday it covers the data, the deals and the regulation, and each quarter it publishes the State of Prediction Markets report with volumes by venue, fee revenue and every funding round we can find. The reports and the newsletter archive are both free.
Questions.
What is a prediction market?
A prediction market is an exchange where people buy and sell contracts tied to the outcome of a future event. A contract pays a fixed amount, usually one dollar, if the event happens and nothing if it does not. The price it trades at reads as the market's probability that the event happens.
How is a prediction market different from a sportsbook?
A sportsbook sets the odds and takes the other side of your bet. A prediction market matches buyers and sellers against each other and charges a fee on the trade, so the price is set by traders rather than by the house, and you can sell your position before the event settles.
Are prediction markets legal?
It depends on the venue and where you live. In the US, Kalshi operates as an exchange regulated by the Commodity Futures Trading Commission. Polymarket runs onchain and launched a separate US product. State regulators and courts are still contesting how sports contracts fit, and that fight is a recurring subject in Predicted.
