Kalshi’s ascent from niche financial exchange to a top-tier player in the broader U.S. gaming ecosystem is accelerating, with new data showing prediction markets approaching a scale that is already eclipsing several major online sportsbooks.
- Kalshi has surged to what would make it the fourth-largest U.S. sports betting operator by handle-per-adult.
- Prediction markets reached about $2 billion in monthly volume in March and could total $34 billion in 2026, nearing 20% of sportsbook handle.
- Rapid growth is intensifying regulatory scrutiny and competition, with major sportsbooks launching their own prediction market offerings.
In March, U.S. sports prediction market activity reached an estimated $2 billion in monthly handle-equivalent trading volume, representing roughly 11% of the combined total when measured against online sports betting, according to a study conducted by Eilers & Krejcik Gaming. At the center of that growth is Kalshi, which has rapidly climbed the competitive ranks and cemented itself as the highest-grossing prediction market in the U.S.
On an adjusted handle-per-adult basis, Kalshi now stands as the fourth-largest operator in the U.S. market, trailing only DraftKings, FanDuel, and Fanatics.
That positioning marks a sharp rise from just a year ago when Kalshi ranked ninth and operated at a fraction of the scale of leading sportsbooks. It
The growth trajectory underscores a broader shift: Prediction markets are no longer a fringe product but an increasingly material segment of the American wagering landscape. Eilers & Krejcik projects total U.S. prediction market handle-equivalent activity could reach approximately $34 billion in 2026, or about 20% of trailing 12-month sportsbook handle.
Prediction market background
Unlike traditional sportsbooks, Kalshi operates as a federally regulated exchange, allowing users to trade contracts on event outcomes rather than place bets against a house. That distinction has fueled both its expansion and the controversy surrounding the category.
Critics, including a growing number of state lawmakers and gaming regulators, argue prediction markets functionally replicate sports betting without adhering to state-level licensing frameworks. The regulatory tension has intensified as activity concentrates in large states without legalized online sports betting such as California and Texas, where prediction market sites have found a receptive user base; studies indicate the majority of activity comes from that pair and the 17 additional states without legal statewide mobile wagering.
Supporters counter that prediction markets are expanding the overall “speculative wallet” rather than cannibalizing sportsbook revenue. Eilers & Krejcik’s analysis suggests a limited substitution between the two products, indicating incremental growth rather than direct displacement.
Sportsbooks answer back
The category’s momentum has also drawn the attention of major gaming operators.
DraftKings, FanDuel, and Fanatics have all launched prediction markets. Those moves reflect a growing recognition that exchange-based models could complement or, in some cases, challenge traditional sportsbook economics.
At the same time, the operational dynamics differ meaningfully.
Prediction markets rely heavily on liquidity provision and market-making capabilities, creating a competitive environment opeartors maintain is closer to financial trading than conventional sports betting. Partnerships with fintech platforms and third-party operators have further boosted volume, though analysts caution that such activity complicates direct comparisons with standalone sportsbooks.
Regulation remains the key variable. The Commodity Futures Trading Commission is actively shaping the framework governing prediction markets, with rulemaking timelines accelerating amid increased political scrutiny. Several states have also begun exploring legislative responses, ranging from oversight measures to outright bans, as policymakers seek to clarify jurisdictional boundaries.
For now, Kalshi’s rapid rise signals a structural evolution in the U.S. gaming industry. What began as a financial experiment tied to event outcomes is quickly converging with mainstream sports wagering, attracting both users and incumbents.
Whether prediction markets ultimately coexist with, complement, or disrupt traditional sportsbooks will depend largely on what seems like an inevitable Supreme Court ruling. But the current trajectory is clear: The sector is scaling quickly, and Kalshi has established itself as the central player in that expansion.
