Waterhouse VC: The next era of prediction markets
Summary
Prediction markets — platforms where users buy and sell binary contracts on future events — are accelerating from niche experiment to mainstream wagering channel. Waterhouse VC highlights major funding rounds, broker integrations and AI features that are driving growth.
Key developments include Kalshi raising $185m at a $2bn valuation and Polymarket nearing a $1bn valuation while acquiring QCEX to re-enter the US market. Broker integrations (Robinhood, Webull and potential Coinbase deals) plus market makers such as Susquehanna are delivering liquidity and instant distribution. AI tools (xAI/Grok) are surfacing odds in feeds, increasing engagement. Sports now dominate volume, attracting regulatory scrutiny, but federal CFTC rulings have so far supported exchange operations. Prediction markets excel at customer acquisition but cannot yet replicate high-margin sportsbook products like same-game parlays.
Key Points
- Kalshi raised $185m at a $2bn valuation, enabling broker integrations and expanded “always-on” markets.
- Polymarket is reportedly closing a large round and is acquiring QCEX to provide a compliant US pathway.
- Broker distribution (Robinhood, Webull) instantly exposes tens of millions of funded users to prediction markets.
- Market makers such as Susquehanna provide essential liquidity and higher limits, attracting professional traders.
- AI integrations (xAI/Grok) surface live probabilities and market context across social feeds, boosting visibility and trade flow.
- Sports markets now represent the majority of volume on some platforms, prompting state-level regulatory pushback.
- Federal rulings and CFTC regulation give exchanges a legal advantage versus state gaming laws, but scrutiny continues.
- Prediction markets are strong at acquisition and price discovery but cannot yet replace high-margin sportsbook products; they widen the funnel for traditional operators.
Context and relevance
This piece matters because prediction markets are no longer an experimental corner of crypto or politics — they are being funded, regulated and embedded into mainstream retail brokerages. For wagering operators, fintech firms and investors, the shift changes distribution dynamics: rather than building a customer base from scratch, marketplaces can be plugged into existing brokerage ecosystems and social feeds.
Trends to watch: institutional liquidity provisioning (market makers), regulatory outcomes around sports contracts, broker partnerships (Robinhood/Webull/Coinbase) and AI-driven distribution. These determine whether prediction markets remain a complementary channel or evolve into a direct competitive threat to sportsbooks.
Why should I read this?
Because if you care about where betting and trading are colliding, this is the fastest shortcut to understanding the players, money and tech that could reshuffle the deck. It explains who’s winning, why brokers matter and how AI and liquidity change the game — without making you read a dozen press releases.
Author’s take
Punchy: This feels like an industry inflection point. Big VC cheques, broker distribution and professional market-making mean prediction markets can scale fast. They won’t replace sportsbooks overnight, but they’ll steal customers, broaden the funnel and force incumbents to adapt. Worth watching — and investing behind infrastructure that makes these products smoother and stickier.
Source
Source: https://igamingbusiness.com/strategy/waterhouse-vc-the-next-era-of-prediction-markets/