OK, I’m sorry about the headline. I was just trying to get your attention; I really do love all football.
But if you’ll bear with me for a moment, I’d like to talk to you about how a massive amount of World Cup betting via prediction markets provides the perfect springboard for the exchanges to have an even more massive football season.
- Strong World Cup activity has brought millions of new users to prediction markets, setting them up for another major test during the upcoming college football and NFL seasons.
- Analysts say prediction markets are becoming a growing force in the U.S., which is partly because they often offer competitive odds and near-nationwide access.
- Despite ongoing legal challenges over whether sports event contracts should be offered, prediction markets could well positioned to expand if current trends continue.
I refer, of course, to American football, arguably the first real game of which will kick off Aug. 29 with North Carolina and TCU in Dublin. From there, it's only a stone's throw to wagering on NFL odds, with New England and Seattle beginning the professional season Sept. 9.
So it’s close and getting closer. It’ll be here soon. And when football season arrives, prediction markets will be there, and they’ll be more familiar to bettors than ever before. Millions of new users have gotten a taste of the exchanges during an excellent World Cup. Now they’re standing by for more.
Last football season, prediction markets were still getting their footing on the sports side. However, a breakthrough in parlay production midway through the year, increasing competition and choice for users, and now massive usage during another tentpole sporting event have set the exchanges up for their biggest test yet.
The 2026-27 football season will be a proving ground for prediction markets, and there’s also no guarantee they get another shot.
Kalshi adds 3 million new users as prediction market capitalizes on the World Cup https://t.co/wIA1WMS70b
— CNBC (@CNBC) July 19, 2026
In providing their thoughts about the financial results companies are preparing to report for the quarter that ended June 30, analysts at investment bank Jefferies settled on two key themes.
“1) Prediction markets are becoming an increasingly important strategic consideration across the sector, and 2) the World Cup is driving meaningful engagement,” the Jefferies team wrote on Friday. “As a result, [second quarter] results may reflect decelerating growth trends as operators position themselves to realize returns on recent investments in [the second half of 2026].”
In other words, prediction markets are a big deal for online sports betting in the U.S. Furthermore, there has been big, material spending on building up those exchanges over the past few weeks. A serious payoff could be coming this fall, perhaps at the cost of slower growth.
Gotta spend money to make money
Operators indeed continue to pour resources into building up their prediction market businesses. Underdog, for example, announced Saturday that it launched its own federally regulated exchange, which followed its acquisition of Aristotle Exchange DCM Inc. in March. Prior to the launch, Underdog had been relying on partners to provide its prediction markets.
“Now with our own exchange, we’re going to unlock so much for more sports fans,” Underdog CEO Jeremy Levine said in a press release. “Prediction markets are largely about sports, and Underdog is the best at sports.”
DraftKings Predictions has been approved as a FCM by the NFA, an important step as we continue to expand our federally regulated predictions offering. As always, DraftKings remains focused on operating responsibly and in compliance with applicable regulatory requirements.
— DraftKings News (@DraftKingsNews) July 15, 2026
That said, there was plenty of payoff already for prediction markets during the World Cup. Kalshi told CNBC it had attracted 3 million new users during the tournament, and nearly $1.9 billion in contracts on the winner was traded on the exchange.
Bloomberg also reported that research firm H2 Gambling Capital had roughly estimated that prediction market activity was approximately 27% of all legal U.S. sports betting volume during the World Cup, which was up from 9% at the start of 2026.
On the horizon now is the NFL, on which the American Gaming Association estimated last year that U.S. adults would wager around $30 billion.
Moreover, one investment bank said the World Cup odds offered by prediction markets were better than those provided by state-regulated online sportsbooks. That could carry over into the NFL season, or the price differences may tighten if the exchanges seek to squeeze a bit more fee revenue from customers.
“The World Cup marks the second consecutive major sporting event in which pricing was superior on prediction markets even when including fees, demonstrating market pricing is becoming structurally more competitive as liquidity scales, reinforcing our view that customer economics are likely to improve further as volumes increase,” Citizens analysts Jordan Bender and Isabelle Slavin wrote in a note to clients Monday.
So superior prices could be important again come NFL season. However, how important they are to bettors could depend on how sophisticated those bettors are, Citizens suggested.
Sharper gamblers may appreciate a few basis points in any given direction. More casual bettors may only care that they can bet at all, an area where prediction markets have another edge, as their federal regulation makes them available across most of the U.S.
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Lawsuits loom
The word “most” is important, because there is an ever-expanding universe of litigation involving prediction markets.
State gambling regulators see their sports-related event contracts as sports betting by another name, while the exchanges and their federal watchdog, the Commodity Futures Trading Commission, argue they float above state-level rules.
Those lawsuits continue to move through the courts and may eventually reach the U.S. Supreme Court. If SCOTUS were to rule against prediction markets, it could shut down the main engine of their growth, which is the trading of sports event contracts.
Citizens: World Cup was 2nd consecutive "major sporting event in which pricing was superior on prediction markets [compared to sportsbooks] even when including fees."
— Geoff Zochodne (@GeoffZochodne) July 20, 2026
How important may depend on user, they add. I.E. bigger for sharps, less so for casuals who just want to bet. pic.twitter.com/3rlBvE37gn
However, that has yet to happen and may not ever happen. In the meantime, their broad accessibility and attractive pricing put prediction markets in an advantageous position.
“If these trends continue at the current pace, we would expect the pricing advantage to widen vs. the sports books, attracting liquidity providers and sophisticated users, strengthening the ecosystem over time,” the Citizens analysts wrote. “While trading volumes are likely to moderate during the seasonal lull before the NFL season, we expect the next meaningful test of this pricing advantage to occur as liquidity builds heading into September.”
