Legacy sportsbooks are chasing prediction markets that already trade billions each month

DraftKings informed buyers on June 9 that its prediction markets enterprise is scaling quick, and the market preferred what it noticed. The corporate’s Form 8-K reported that Might 2026 annualized client quantity in its Predictions providing rose 24% month over month to $1.3 billion, whereas annualized complete quantity traded climbed 34% to $3.1 billion. Shares of DraftKings jumped roughly 10% in early trading on the information.

These figures are monumental for a product line that is barely six months previous, since DraftKings solely launched Predictions in December 2025. Seen in opposition to the broader class, although, they present an organization that is arriving late to a market prediction-native platforms have already constructed into one thing far bigger.

That $3.1 billion is an annualized run fee, which interprets to roughly $258 million in precise quantity in Might. Kalshi, by comparability, processed $17.9 billion in Might alone.

The hole between DraftKings $258 million and prediction markets’ $24 billion

Prediction markets let individuals commerce contracts tied to the end result of future occasions, something from elections and inflation information to sports activities outcomes and crypto costs. Every contract pays out $1 if the occasion occurs and $0 if it would not, and the worth in between works like a reside chance gauge: a contract buying and selling at 65 cents means merchants collectively give the end result a 65% likelihood.

You possibly can maintain till the occasion resolves or promote early on the going worth, simply as you’ll with a inventory. That construction basically makes these platforms behave like monetary exchanges, with order books and always transferring costs, which is a big a part of why so many corporations are speeding in.

It additionally helps to decode one piece of accounting within the DraftKings announcement. “Annualized” means the corporate took one month of exercise and multiplied it by 12, which is a normal method to present momentum however makes the headline quantity 12 instances greater than what really occurred.

Strip that out, and DraftKings dealt with about $258 million of buying and selling in Might. The established platforms function on a special scale completely. Mixed month-to-month buying and selling quantity on Kalshi and Polymarket, the 2 largest names, climbed from underneath $5 billion in September 2025 to about $24 billion in April 2026, in accordance with a Pew Research Center analysis.

Might information, launched after the Pew research, confirmed the 2 platforms transferring in reverse instructions: Kalshi notched its ninth straight monthly record at $17.91 billion, whereas Polymarket fell to $7.08 billion, its second consecutive month-to-month decline.

For perspective, all authorized US sportsbooks mixed took in round $14 billion in wagers per thirty days throughout 2025. The prediction markets class DraftKings simply entered already strikes more cash than the business DraftKings got here from.

Nonetheless, it is essential to notice that each platform measures quantity in a different way. Robinhood skips {dollars} altogether and experiences the variety of contracts traded, a determine that sounds astronomical as a result of contracts virtually all the time price lower than a greenback every.

Its CEO, Vlad Tenev, mentioned over 12 billion contracts have been traded on the platform in 2025 and predicted the enterprise may finally drive “trillions” in annual quantity, whereas Deutsche Financial institution counted more than 16 billion contracts to this point in 2026. The measures range, however each model of the mathematics results in the identical place: DraftKings’ Might quantity is roughly what Kalshi strikes in per week.

Sports activities are the engine pulling all of this ahead, which explains why a sportsbook felt compelled to indicate up. Sports activities alone account for roughly 80% of Kalshi’s quantity, and along with politics and crypto, it has pushed about 91% of Kalshi’s exercise and 90% of Polymarket’s since July 2024, as CryptoSlate has reported.

DraftKings timed its disclosure properly, touchdown days into the 2026 World Cup and simply after the NBA Finals, and one estimate put potential World Cup prediction market exercise as excessive as $2.5 billion.

What the sportsbooks are actually chasing

Either side of this struggle has weapons that the opposite lacks. Sportsbooks convey thousands and thousands of present prospects, well-known manufacturers, fee infrastructure, enormous advertising and marketing budgets, and years of expertise in pricing reside odds.

The prediction-native platforms convey deep swimming pools of merchants able to take the opposite aspect of any contract, a a lot wider menu of occasions, and, crucially, a authorized construction that lets them function the place sportsbooks cannot.

DraftKings CEO Jason Robins informed buyers the corporate intends to establish a leadership position in sports activities predictions earlier than year-end, and the corporate has raised its estimate of the overall market it may handle to between $55 billion and $80 billion.

That authorized construction is the entire motive this class exists. Sports activities betting in America is ruled state by state, and every sportsbook wants a license in each state the place it operates. Occasion contracts take a special authorized route: they’re labeled as derivatives, monetary devices overseen solely by the CFTC, the identical regulator that watches over futures on oil and corn. A federal license means one approval covers the entire nation. It is how DraftKings launched Predictions in 38 states, together with a number of the place on-line sports activities betting stays unlawful.

Whether or not that route survives is now the central authorized struggle in American playing. A federal appeals courtroom dominated on April 6 that Kalshi’s sports activities contracts seemingly fall underneath unique federal jurisdiction, shielding them from New Jersey’s playing enforcement.

Ten days later, a special appeals courtroom, listening to Nevada’s case, appeared inclined to rule the other means. If the courts break up, the Supreme Court docket often has to settle it, and prediction market merchants themselves worth a 64% chance the excessive courtroom takes a case by year-end.

In the meantime, the enforcement retains escalating in each instructions: the CFTC sued Arizona, Connecticut, and Illinois in April to cease them from going after Kalshi and Polymarket, courts in Maryland and Massachusetts have sided with state regulators, Kalshi faces more than a dozen federal lawsuits, and CryptoSlate’s reporting reveals the identical pressure spreading overseas, from person probes in South Korea to platform blocks in Brazil.

The following ruling to look at comes from the Sixth Circuit, the place Kalshi is interesting an Ohio choice that went in opposition to it, and the coalition lining up in opposition to the corporate there simply elevated.

Former CFTC Chairman Gary Gensler, who ran the company when Dodd-Frank was applied in 2010, filed an amicus brief on June 11 arguing Congress by no means meant his company to change into a nationwide sports-betting regulator, and that sports activities bets usually are not swaps underneath the legislation he helped write.

He filed alongside the American Gaming Affiliation, 30 Native American tribes, the Indian Gaming Affiliation, and Higher Markets. In a parallel Massachusetts case, 38 state attorneys basic have already lined up behind the state.

The break up additionally runs by the sportsbook business itself. DraftKings and FanDuel quit the AGA in November 2025, days earlier than DraftKings launched Predictions, after the commerce group moved to bar members that function prediction markets. The identical affiliation is now arguing in courtroom that the product DraftKings simply constructed is unlawful playing.

There’s another factor price understanding earlier than taking any of those numbers at face worth: quantity is how a lot cash modifications fingers, however income is the small slice the platform retains. The slice comes from charges of some cents per contract, so a billion {dollars} in buying and selling may produce only some million in precise earnings.

The entire sector generated about $31 million in charges in April, and Polymarket collected $29 million of it regardless of trailing Kalshi badly on quantity, as a result of its merchants place bigger bets. DraftKings hasn’t mentioned how a lot its Predictions quantity earns, so its $3.1 billion run-rate solely measures traction, and the revenue query stays open.

DraftKings’ prediction markets progress is large, and the 34% month-to-month bounce is the sort of quantity that strikes a inventory. However the extra essential level is that legacy sportsbooks are following a class they did not invent, one the place Kalshi, Polymarket, and Robinhood have already proven that occasion contracts can generate billions in month-to-month quantity and have spent years constructing each the buying and selling depth and the authorized arguments to defend it.

Whether or not DraftKings can flip its sports activities viewers into exchange-style merchants earlier than these platforms develop too liquid to catch is the open query, and the reply will say an excellent deal about whether or not the sportsbook mannequin absorbs prediction markets or will get absorbed by them.