In the past few years, the prediction market has emerged as a dark horse, achieving an astonishing hundredfold growth thanks to the momentum of the US presidential election.

Following the election, sports became the largest sector in the prediction market, competing with traditional betting companies for a share of the lucrative US sports betting market, which is worth over $30 billion.

In an interview, Robinhood CEO Vlad Tenev mentioned that sports betting companies must have realized the severity of the situation and understand that it could completely disrupt their business.

Prediction markets have become a new way for millions of Americans to bet on sports events and elections, leading to speculation about how much of the betting market has been taken over.

This article will analyze publicly available data to try to resolve any doubts you may have.

Predicting market performance

In the months leading up to 2025, Polymarket and Kalshi's monthly trading volume hovered between $800 million and $1.2 billion, before experiencing an explosive surge in October.

Polymarket's monthly trading volume jumped to $3.02 billion, a single-month increase of 110%. Kalshi's volume grew to approximately $4.4 billion, reaching $5.8 billion in November, and then setting a record of $6.38 billion in December.

Kalshi's explosive growth was due to its strategic partnership with Robinhood, which allowed it to be directly embedded into the traditional retail brokerage app with tens of millions of active users, bringing in a massive influx of new funds and novice users from traditional finance. Polymarket also obtained compliance clearance from the U.S. Commodity Futures Trading Commission (CFTC) through acquisition, re-entering the U.S. domestic market.

Another major reason is that October is a super prime time for North American sports, with the NFL, which is Americans' favorite sport, starting its new NBA season, and the MLB playoffs underway.

Based on a combined monthly operating rate of $16.8 billion in February 2026 (Polymarket $7 billion + Kalshi $9.8 billion), the market is projected to achieve an annual transaction volume of over $200 billion. If the growth momentum continues, the market size is projected to reach $1.1 trillion by 2030.

Not bad, right?

The online gambling platforms have been gradually swallowed up?

On the day Kalshi launched "Kalshi Combos" (Parlay), DraftKings (DKNG) stock price plummeted by over 12%, wiping out approximately $2.5 billion in market value in a single day. Flutter (FLUT) stock price also plunged by over 10%, losing approximately $5.5 billion in market value in a single day.

Wall Street analysts point out that the emergence of Kalshi Combos marks the formal entry of the prediction market into the core territory of traditional betting, with Parlays being DraftKings and FanDuel's most profitable and deeply moat-ridden businesses.

In an interview, DraftKings CEO Jason Robins addressed the stock price decline, saying it wasn't just a threat from prediction markets like Kalshi and Polymarket, but that was indeed one of the main reasons.

Fueled by media hype, a narrative has begun to spread: the prediction market is disrupting and devouring the multi-billion dollar empire of traditional sports betting. But what is the truth?

If we compare the actual turnover of compliant sports betting giants like FanDuel and DraftKings, as well as the crypto casino giant Stake that operates outside of regulation, with Polymarket under the same data dimension, we will find that during the period from 2023 to 2025, no real encroachment occurred; instead, both exhibited explosive growth on two parallel tracks.

According to the latest Business Gaming Revenue Tracker report released by the American Gaming Association, the legal sports betting industry in the United States reached record highs in both 2024 and 2025.

In 2025, total commercial gaming revenue in the United States reached $78.72 billion, representing a year-on-year increase of 9.2%.

Legal gaming contributed $18.1 billion in tax revenue to state and local governments, a 15.1% increase year-over-year.

And this does not include data from non-compliant crypto casinos such as Stake.

Although Stake remains private and does not disclose its financial statements, recent disclosures from KuCoin Research, MEXC News, and other sources indicate that its current size is extremely impressive.

Stake processes a stable total of around $10 billion in bets each month, while monthly deposits of pure crypto assets reach as high as $1.1 billion.

In February 2026 alone, the Stake platform recorded a staggering 6.78 billion bets. This means the platform was processing an average of over 2,800 bets per second. This has completely deviated from the pace of traditional gambling and has become a typical example of high-frequency financial activity.

From this perspective, prediction markets have only just begun to enjoy the outermost layer of the cake.

So, is the prediction market still the enemy?

Of course, and it is a rapidly growing enemy.

With the conclusion of major political events, prediction market platforms, in order to maintain massive liquidity, are aggressively seizing the core sports sector of traditional sports lottery.

App Store data from January 2026 shows:

Kalshi App downloads: ~1.9 million per month
FanDuel App downloads: ~475,000 per month
DraftKings App downloads: ~475,000 per month

Furthermore, in states where sports betting is legal, 10% of DraftKings users are also using Kalshi. That's incredible, bro.

Looking at the betting data for this year's Super Bowl, Kalshi's single-day trading volume was $871 million, double that of FanDuel and DraftKings on the same day. Some analysts pointed out that Kalshi accounted for 80% of all the increased betting volume during this year's Super Bowl.

The American Gaming Association specifically noted that prediction markets like Polymarket, which offer contracts for sports events, caused legal sports betting to lose more than $500 million in potential tax revenue by 2025.

Kalshi has now reached seventh place in US sports betting revenue, and the market conservatively estimates that it steals at least $1 billion in profits from the traditional betting market each year.

RedStone Oracle Partners with Kalshi to Bring Prediction Markets On-Chain

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