Prediction markets built an audience on everything from Fed calls to celebrity moments, but this season football is the star attraction. Over last weekend's NFL and college slates, Kalshi and Polymarket notched consecutive daily volume records that combined for $8.56 billion, lifting their weekly total to a new high of $22.2 billion, according to Dune Analytics. A Bloomberg review of Kalshi and Polymarket International figures using Dune and Polymarket's US daily reports shows how quickly the mix has shifted. In the NFL's opening month, more than 80% of Kalshi's September volume came from sports.
Kalshi is exploring a possible IPO following a funding round that pegged the platform's value at about $40 billion. "It's the same playbook we saw five years ago with online betting apps," said Jordan Bender, an analyst at Citizens Financial Group. "It looks no different."
Platforms are riding the season with "combos" - a parlay-style product that groups several results into a single position. In the past week, combos accounted for 65% of Kalshi's trading and 53% of Polymarket's US activity, with the majority tied to sports. Elisabeth Diana, the company's communications lead, noted that no less than 96% of Kalshi's combos related to sports.
On heavy NFL and college days, Kalshi's combo traffic averages about $1.36 billion, Piper Sandler estimates - more than double non-football days - versus roughly $900 million in total combo volume across the entire previous NFL regular season.
The ad tactics look familiar, too. In Week 1 of the NFL regular season, Novig Betting Inc. - a prediction market focused solely on sports - launched a campaign starring Sydney Sweeney wearing nothing but shoulder pads, football in hand. Polymarket launched a multimillion-dollar campaign featuring LeBron James, the new Philadelphia 76ers player, alongside Eli Manning and Richard Sherman. Neither Polymarket nor Novig responded to requests for comment.
Sports betting volume is pulling prediction markets into the mainstream. Market Briefs covers that growth free every morning.
Because prediction markets are treated as exchanges at the federal level, they can avoid state gambling taxes such as New York's 51% rate, and they aren't bound by the age and location limits sportsbooks face. That gap has DraftKings and FanDuel building prediction-style products to reach users where their books can't operate, yet, by both trading volume and user uptake, they remain behind Kalshi and Polymarket.
Kalshi argues its products aren't gambling because it matches buyers and sellers and refrains from taking the other side of trades. As Diana put it, "Sports trading on regulated prediction markets offer a fairer choice to consumers, with no 'house' that restricts winners and hooks people the more they lose."
Lawmakers are turning up the heat. They further flagged connections to President Donald Trump's family, noting that Donald Trump Jr. advises Kalshi and that a venture firm he runs is heading a funding round in Polymarket. The CFTC did not respond to requests for comment.
States argue these platforms are gambling in exchange clothing. In total, no fewer than 44 states, among them New York, Arizona and Connecticut, assert that these sports contracts violate their anti-gambling laws. Unusually, the CFTC has filed lawsuits against states attempting to enforce those laws on federally regulated exchanges.
With federal appeals courts split, the justices are more likely to weigh in. If the states prevail, expect licensing, taxes and local gambling restrictions; a decision backing Kalshi and the federal framework would preserve national operation under CFTC oversight. Indiana University associate professor of business law John Holden said, "If prediction markets are successful at the Supreme Court, then basically the sports betting regulatory regime as it exists could basically cease to exist."
Football is proving these platforms can pull in staggering volume fast, with combos doing much of the heavy lifting. The same wave has sparked splashy ads, new products and a sky-high valuation talk track - and drawn sharp scrutiny from states, the NFL and Congress. If regulation tilts toward the states, expect more friction from taxes, licenses and location rules.
If it goes the other way, nationwide access under the CFTC stays intact. Either way, the odds on these markets are changing as much in courtrooms as on the field.
Where the volume comes from shapes how regulators respond. Get the free Market Briefs daily newsletter and follow it.
