Kalshi now controls 89% of the U.S. prediction market as regulated trading takes over
As Kalshi captures a dominant 89% of the market, a high-stakes legal battle between federal regulators and individual states will determine if these platforms are treated as sophisticated financial tools or just another form of gambling.
What to know:
- Prediction markets in the United States are growing, with weekly volume up 4% and federally regulated exchange Kalshi now commanding about 89% of the market, a Bank of America report finds.
- A widening regulatory divide is emerging as Kalshi operates under CFTC oversight while crypto-native rival Polymarket faces tighter U.S. restrictions despite strong global activity.
- Ongoing legal battles between the CFTC and states over whether event contracts are financial instruments or gambling could determine whether the industry scales under a single federal framework or fragments into a state-by-state regime.
Kalshi now controls roughly 89% of measured U.S. prediction market volume, far ahead of Polymarket at 7% and Crypto.com at 4%, according to BofA estimates. The shift points to a market consolidating around platforms with clearer regulatory standing.
That divide reflects a deeper tension. At the center is whether prediction markets should be treated as financial instruments or as gambling. Kalshi operates under oversight from the Commodity Futures Trading Commission (CFTC), framing its contracts — including those tied to political or sports outcomes — as derivatives.
Polymarket runs on blockchain rails and has historically operated outside U.S. regulatory boundaries. It allows users to trade on event outcomes using crypto, often attracting global liquidity but facing restrictions domestically.
