Prediction Market Wars: $4B Weekly Volume as DraftKings, FanDuel, Coinbase Battle for $40B Industry

The prediction market industry just crossed a historic milestone: over $4 billion in weekly trading volume. But as Kalshi and Polymarket celebrate record numbers—amid recent controversy over potential insider trading—a wave of heavyweight challengers including DraftKings, FanDuel, Fanatics, Coinbase, and potentially Robinhood are storming the gates of what’s quickly becoming a $40 billion industry.

The $4 Billion Week

For the week ending December 21, 2025, prediction markets hit unprecedented numbers. Kalshi alone recorded $2.3 billion in trading volume—its first week ever above the $2 billion mark and nearly double Polymarket’s $1.2 billion for the same period.

The growth is staggering. Kalshi’s trading volumes have grown 1,000% since 2024, with the platform now on an annualized pace exceeding $50 billion. Combined, Polymarket and Kalshi reported nearly $40 billion in cumulative trading volume for 2025.

“Trading volume should meaningfully increase several times over current, as long as sports betting continues to be legal.”
— Industry analyst on prediction market growth potential

Sports contracts have emerged as the dominant driver, now accounting for 75% of Kalshi’s trading activity. Trades tied to the Super Bowl alone have already cleared $65.8 million—a sign that prediction markets are competing directly with traditional sports betting for market share.

The New Challengers

December 2025 saw an unprecedented influx of major players launching prediction market platforms. The sports betting giants have arrived—and they’re not here to play small.

DraftKings made the biggest splash, launching in 38 states on December 19—significantly broader than the 30 states where DraftKings Sportsbook currently operates. Crucially, this includes sports event contracts in California, Texas, Florida, and Georgia, massive markets that have yet to legalize online sports betting.

Fanatics became the first major sportsbook operator to launch a prediction market when Fanatics Markets went live on December 3. The platform quickly expanded from 10 states to 24 within days, partnering with Crypto.com Derivatives as its CFTC-registered exchange.

FanDuel took a more measured approach, launching FanDuel Predicts in just five states (Alabama, Alaska, North Dakota, South Carolina, and South Dakota) on December 22. However, the company has signaled aggressive expansion plans for early 2026, with the goal of reaching all 50 states.

The Incumbent Response

Facing this onslaught of competition, Kalshi and Polymarket haven’t been standing still. Both platforms secured massive funding rounds that signal institutional confidence in their market positions.

Kalshi’s $1 billion Series E round in December, led by Paradigm with participation from Sequoia, Andreessen Horowitz, and ARK Invest, valued the company at $11 billion—more than doubling its $5 billion valuation from just two months prior. The company told investors it’s on pace for $600-700 million in annualized net revenue.

Polymarket secured an even more strategic partnership in October when Intercontinental Exchange (ICE), the parent company of the New York Stock Exchange, invested up to $2 billion for approximately 20% of the company. Beyond capital, ICE will become a global distributor of Polymarket’s event-driven data, providing institutional customers with sentiment indicators on market-relevant topics.

The Robinhood Wild Card

Perhaps the most dramatic development threatening to reshape the competitive landscape is Robinhood’s move to build its own prediction market exchange.

Robinhood and quant trading firm Susquehanna have formed a joint venture to acquire MIAXdx, a CFTC-licensed designated contract market (DCM) and derivatives clearing organization (DCO). This acquisition will allow Robinhood to operate its own prediction market exchange and clearinghouse—just like Kalshi does—potentially as early as 2026.

Currently, Robinhood operates as an introducing broker for Kalshi, routing its users’ prediction market trades to Kalshi’s exchange. But with its own exchange, Robinhood could keep all that volume in-house.

“When you build something as successful as Kalshi has, it’s no surprise that everyone and their mum wants a piece of it. It’s the ultimate compliment that companies like CME and Robinhood are validating the industry we created.”
— Jack Such, Growth Executive at Kalshi

A Robinhood spokesperson noted that “there will be no changes in the short term” to its Kalshi relationship. But with more than five CFTC-registered prediction market exchanges expected to be fully operational by mid-2026, the competitive pressure is only intensifying.

Geographic Disruption

One of the most significant developments is the geographic expansion of prediction markets into states without legal sports betting. This represents a massive regulatory arbitrage opportunity, allowing bettors to wager on over/under outcomes and other sports contracts where traditional sportsbooks can’t operate.

DraftKings Predictions now offers full sports event contracts in 17 states, including California, Texas, Florida, and Georgia—four of the largest U.S. markets that have yet to authorize online sports betting. In the 21 states (plus Washington D.C.) where DraftKings Sportsbook already operates, DraftKings Predictions offers only non-sports contracts to avoid regulatory conflicts.

The regulatory framework is key: prediction markets operate under CFTC oversight as derivatives products, not under state gaming commissions as sports betting. This allows platforms to offer sports-related contracts in states that haven’t legalized traditional sports betting—a distinction that gaming regulators are increasingly challenging.

What’s Coming in 2026

If 2025 was the year prediction markets went mainstream—with even Google Finance integrating prediction market data—2026 will determine whether they can maintain their explosive growth trajectory while fending off heavyweight competitors.

Analysts at Piper Sandler project that prediction market industry revenue could climb to $8 billion by 2030 as the sector takes market share from traditional sports gambling. With sports contracts already dominating platform activity and major sportsbook operators now entering the space, that timeline could accelerate significantly.

The battle lines are drawn: incumbents Kalshi and Polymarket, backed by billions in fresh capital and institutional partnerships, versus the sports betting giants and fintech platforms with massive existing user bases. The winner will control one of the fastest-growing segments of the financial markets.

Sources

• Kalshi Reaches $11 Billion Valuation — Kalshi
• ICE Announces Strategic Investment in Polymarket — Intercontinental Exchange
• DraftKings Debuts Predictions App — DraftKings
• FanDuel and CME Group Launch FanDuel Predicts — FanDuel
• Kalshi Prediction Markets Powered by USDC — Coinbase