Kalshi has overtaken prediction market leader Polymarket by registering higher trading volumes for three weeks running.

Last week, Kalshi users traded $728 million worth of bets. That’s almost 60% more than Polymarket, and almost as much as the record $749 million weekly volume Kalshi handled in the lead up to the 2024 US presidential election.

The booming sports betting market is driving the success, according to Dustin Gouker, a sports betting consultant and predictions market analyst.

“Football is now accounting for more than 70% of all of Kalshi’s trading volume,” he told DL News. “It consistently built up the sports betting product for months and then launched National Football League and college football markets.”

Sports betting mania

Sports betting is a relatively new market in the US, but it’s growing fast.

In 2018, the Supreme Court struck down a federal ban on the practice, letting states decide their own laws. Since then, 38 states have legalised sports betting.

Last year, the US sports betting industry posted a record $13.7 billion in revenue. That could soar as high as $39 billion by 2030, according to Flutter Entertainment, owner of FanDuel, one of the biggest sportsbooks in the US.

Prediction markets have been eager to get in on the action.

They rose to prominence during the 2024 US presidential election, and let users bet on the likelihood of future events, ranging from politics to culture — and sports.

“The land grab for sports betting via prediction markets is going to ramp up in the coming months,” Gouker said.

More competition

Kalshi will have to fight to keep its lead.

The firm’s sports-betting success is largely due to it being regulated in the US while its competitors aren’t yet, Prithvir Jhaveri, CEO of TradeFox, a prediction market aggregator, told DL News.

Polymarket also offers sports betting, but without access to the US market, its growth has been limited.

“Sure, some people are betting at Polymarket from the US using a VPN and crypto, but it’s not the same as Kalshi, which is offering it legally in 50 states to everyone over 18, and it’s in the App Store,” Gouker said.

That could soon change.

In July, Polymarket acquired QCX, a Commodity Futures Trading Commission-licensed derivatives exchange, for $112 million. In early September, the regulator granted a no-action letter to the exchange, paving the way for Polymarket to start offering its services in the US.

“Polymarket will certainly contest sports betting with its CFTC-regulated product, when it launches,” Gouker said.

Other players are also getting serious.

Crypto.com, one of the largest crypto exchanges globally, announced on September 2 it will start offering sports event contracts to users through a partnership with Underdog, a sports gaming company.

Robinhood volume

Sport betting isn’t Kalshi’s only edge, however.

In March, stock-trading platform Robinhood launched a prediction markets hub powered by Kalshi, offering contracts on sports and policy outcomes. Users betting on Kalshi through Robinhood now account for a large chunk of Kalshi’s trading volume, Gouker said.

Then there’s proposition betting, placing wagers on in-game events that don’t impact the outcome, such as the first touchdown scorer in football, or the number of fouls or corner kicks in soccer.

Kalshi added prop bets for football in August, a move which is giving the platform a boost over competitors, Jhaveri said.

“This is what drives the volumes and profits for the FanDuels and DraftKings of the world.”