Mario, a 22-year-old consultant in New York City, first used Kalshi around six months ago when his friend recommended the platform, joining the “good amount” of his friends—predominantly men in their 20s—who use prediction markets. Mario (who only wanted to be referred to by his first name) said he is a responsible user: He risks only $10–50 on most trades, and his biggest loss was $100, betting on an underdog in a football game. 

Like the sportsbooks FanDuel and DraftKings, prediction markets such as Kalshi and Polymarket have attracted a younger, male demographic to make or lose money from betting. The platforms offer event contracts where you can take the “yes” or “no” position on whether that event will occur. The difference between them and sportsbooks or casinos is that regulatory bodies consider them “markets,” not gambling venues with “houses” to bet against. Rather, traders on prediction markets try to best other traders. 

This means that the markets are regulated by the federal Commodity Futures Trading Commission (CFTC) rather than by the states in which they operate. That means that unlike sports betting and online gaming, states can’t collect taxes on the trades placed on prediction markets. In contrast, New York State took in over $1.3 billion in tax revenue from mobile sports betting in the 2025-26 fiscal year. Almost all of that money went to funding public schools. 

The wealth-management and research firm Bernstein has forecasted that the volume of money traded on prediction markets will reach $1 trillion by 2030. Just in the month of April, Kalshi and Polymarket (which includes trades placed internationally) had a combined trading volume of $16.7 billion.

While Kalshi has been operating in the U.S. since 2020, Polymarket had been operating solely off-shore until last year. The platforms make money from collecting fees on some trades. Kalshi made $263.5 million in fee revenue in 2025, 89% of which was from sports contracts. In the ten weeks after Polymarket began charging fees in January, it collected over $11.2 million. After it expanded its fees on March 30, its daily revenue from them is surpassed $1 million.

Kalshi and Polymarket have been thrust into the spotlight for offering trades on non-sporting events, like elections and “mention markets” (such as whether Trump would say “Iran” in a speech). Mario said he found it appealing to bet on things other than sports, specifically events where he might have more knowledge than the average trader.

“You never know what someone is going to say during a meeting, but you could look at the price, and be like ‘I think he’s going to say Iran,’ and they say it’s only a 13% chance, I think it’s higher, and you end up taking it,” Mario said about mention markets. “I have a little bit of a background in government and politics, and there were markets for how long the government shutdown would last. That’s the kind of thing you could only find on there.”

Mario said being able to sell his position when he no longer feels confident in it is why he prefers betting on sports contracts on Kalshi to FanDuel or DraftKings. Sports contracts make up 60% of the trades placed on prediction markets. 

In October 2025, the New York State Gaming Commission sent Kalshi a cease-and-desist letter demanding that it stop offering sports contracts, accusing it of operating as an unlicensed sportsbook. After Kalshi sought a preliminary injunction blocking the state from enforcing that, the Gaming Commission agreed to a temporary restraining order halting enforcement until the courts rule on the preliminary injunction, commission spokesperson Lee Park told the Indypendent. State Attorney General Letitia James also issued a warning against prediction markets in February, a few days before the Super Bowl. 

In March, Senators Adam Schiff (D-Calif.) and John Curtis (R-Utah) introduced a bill that would prohibit prediction market companies from offering sports contracts. 

The CFTC, however, is fighting for regulatory control over prediction markets, which are being advised and invested in by Donald Trump, Jr. On Apr. 2, it sued Illinois, Arizona, and Connecticut for sending cease-and-desist letters to prediction markets, claiming they were overstepping their regulatory authority. In a Washington Post op-ed in January, CFTC chairperson Michael Selig wrote that the commission should not enforce “legacy rules” on digital financial products, arguing that its approach “should be to deliver the minimum effective dose of regulation—nothing more and nothing less.” 

Prediction markets have also been making headlines for being the sites of likely insider trading schemes, like the nearly $1 million in bets placed by 16 anonymous accounts on Polymarket the day before the U.S. attacked Iran on Feb. 28, and for Kalshi’s refusal to pay out bets that Iranian leader Ali Khamenei would be ousted by March 1 after he was killed. Bills related to both insider trading and “death bets” on war, assassination, or death have been introduced in Congress this year. 

A novel trading landscape

The rise in the use of prediction markets also points to growing social acceptance of a newer, “gamblified” financial trading landscape.

Max Griffin, 22, of Brooklyn, a senior at Tulane University who plans to move back to the city to work at an investment firm when he graduates, doesn’t use prediction markets, but calls them “a really fascinating new space, and the frontier of what’s going on in trading right now.” 

He’s president of an algorithmic trading club at the New Orleans university, and said its members of his club are excited about prediction markets. Their newness, he explained, offers appealing opportunities for arbitrage—the act of noting discrepancies in prices across almost identical contracts and buying in one market at a lower price and selling in another at a higher price to make a profit.

In established financial markets, Griffin said, “there are so many players in them, so many really smart hedge funds working for these small arbitrage opportunities,” that “we have very efficient markets, and it’s increasingly difficult to find arbitrage opportunities.” 

Some established wealth-management firms have found prediction markets helpful, using their data for their own risk analysis and hedging. And Kalshi has scored collaboration deals with CNN and CNBC. 

“This data has been very useful for people. It’s a really good gauge of public sentiment,” Griffin said.  

Problem gambling concerns

Problem gambling treatment professionals worry about the way the platforms walk the line between trading and gambling. 

In March, DraftKings announced the launch of a “super app” that includes prediction markets alongside online casino games and sports betting. And in online trading apps like Robinhood, you can use the money in your investment accounts to buy an event contract on a prediction market. 

Mario said the prediction market platforms are “equivalent to a sportsbook.”

“If you’re betting on things that you think you know more information than the average user, then it can feel like an investment,” Mario said. “If you’re betting on a sports game, it could feel like gambling.”

According to Jessica Steinmetz, clinical director of the SAFE Foundation in Brooklyn, financial investment has already been on the radar of problem gambling prevention organizations, such as the high-frequency buying and selling of stocks in day trading. But, she said, prediction markets are blurring this line between trading and gambling further. 

“They’re basically betting markets dressed up as information tools,” Steinmetz said. “They look like betting, but they’re usually not going to be framed in that way. They’re usually framed as information and using your thoughts, as opposed to just pure gambling entertainment.” 

She said certain features of prediction market trades make them more addictive than other types of financial trading: They “have a clear end date when the event resolves, so it creates a faster feedback loop, which is likely going to increase problems in people. There’s more frequent wins and losses, which will encourage more of the desire for it.” 

Steinmetz also mentioned that the SAFE Foundation has recently gotten calls from people worried that their usual tools to prevent problem gambling—like self-exclusion lists and other blocking apps—won’t work against prediction markets due to a lack of regulation. 

Both Kalshi and Polymarket have age verification, and Kalshi checks a watchlist for members of Congress or people banned from trading for other reasons. But they are not required to follow the hefty regulations laid out for sportsbooks and casinos. 

“It’s pretty easy to get going. They have a lot of different methods of payment. It’s pretty easy to make an account, pretty easy and intuitive to trade,” Mario said. 

Robin Singh, the team leader for the Queens Problem Gambling Resource Center, said organizations like his and regulatory bodies have struggled to stay on top of the rising popularity of prediction markets. 

The way to do so is to educate people, Singh said. “When people don’t feel like they’re betting, they tend to bet more. We need to spread the education as much as we possibly can. That’s the way to address it the best until the legislature catches up.”

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