1. Reflection
For most of the last two years I treated prediction markets as a regulatory curiosity rather than a commercial threat, a clever piece of financial engineering that let a handful of crypto-native platforms dress a bet up as a derivatives contract and argue their way out of state gambling law, and I told anyone who asked that the fight would stay in the courts where it belonged and leave the actual business of sports betting largely untouched.
The World Cup this summer made me admit I had that wrong. Kalshi alone took more than $25 billion in sports wagers during the tournament, against a combined figure of roughly $4 billion that DraftKings and FanDuel were expected to handle across all 104 matches, and H2 Gambling Capital’s estimate that prediction markets reached around 27% of US legal sports betting volume during the World Cup, up from about 9% at the start of the year, is not a rounding error; it is a genuine share shift happening in real time.
What actually moved me was not the volume, which a sceptic can wave away as a one-off tournament spike; it was the pricing. Citizens JMP found Polymarket’s average implied vig at 2.70% and Kalshi’s at 4.71%, against DraftKings at 4.97% and FanDuel at 5.07%, which means the challengers are not winning on marketing spend or a World Cup halo effect; they are winning because they are structurally cheaper for the customer, and that is the kind of advantage that does not evaporate once the tournament ends.
2. Global Connection
This is not a story that stays inside America’s borders, even though the regulatory fight is currently playing out almost entirely in US courts, with at least eight states in active litigation against prediction market platforms and eleven having issued cease and desist orders, and the CFTC itself suing Wisconsin in April to defend its claimed jurisdiction over the product.
What I find more interesting than who wins that argument is how differently the rest of the world is positioning itself while it waits for an answer. The UK Gambling Commission has made clear that a prediction market operator launching in Great Britain could not simply call itself a non-gambling product and would fall under betting intermediary licensing in the same way an exchange like Betfair does, which closes off the regulatory arbitrage that has let Kalshi and Polymarket grow so quickly in parts of the US. Ireland has gone further and started issuing betting licences to prediction market-style products directly, with the first expected by this July, essentially absorbing the format into the existing regulatory perimeter rather than fighting a jurisdictional war over it.
Most of the EU has taken the opposite path and simply banned the platforms outright, France, Portugal, Hungary and several others among them, which tells you a genuine structural pricing advantage is not enough on its own if the regulatory door is closed. Three different answers to the same product, and every one of them is a leadership decision some board had to make with the same limited information mine has.
3. The Case for Moving Now
I do not think the right response is to spend the next eighteen months waiting to see who wins in the American courts, because by the time that is settled, the pricing advantage and the user habits it is already building will be much harder to unwind than they are today. DraftKings did not wait; it bought Railbird Technologies last October, launched its own prediction market product in December, and by March was describing a super app strategy aimed specifically at states where it cannot yet offer a licensed sportsbook, which is a sensible way to compete on the product’s own terms rather than only on the regulatory question of whether it should exist. That approach carries real risk of its own; a BNP Paribas analyst put a rare sell rating on DraftKings in May, citing exactly this exposure, and Bernstein separately argued the World Cup numbers should put feet to the fire for every traditional operator to build something comparable.
My own view, having spent this year watching the numbers move faster than the courts, is that operators who treat this purely as a legal problem to be won or lost by someone else are ceding the pricing argument to a competitor while they wait, and the leaders who come out ahead will be the ones who took the product threat seriously months before the jurisdiction question was ever resolved.
4. Boardroom Questions
1. If a genuine price advantage the size of the one Citizens JMP found in this market opened up against us anywhere else in our business, how quickly would we have responded, and why should this be different?
2. Are we treating prediction markets as a legal question to be resolved by regulators and courts, or as a commercial threat we need a product answer to regardless of how that legal question resolves?
3. Which of our licensed markets would actually permit a prediction market-style product under existing law, and have we asked our own regulators the same question the UK Gambling Commission has already answered?
Sources
1. NPR, Kalshi says it’s not a sportsbook as World Cup bets surge, 17 July 2026, https://www.npr.org/2026/07/17/nx-s1-5884848/kalshi-sports-betting-prediction-markets-draftkings-fanduel-world-cup
2. NEXT.io, Prediction markets seize 27% of World Cup share from sportsbooks, 19 to 20 July 2026, https://next.io/news/betting/prediction-markets-seize-27pc-world-cup-share/
3. Fortune, Prediction markets swell to 27% of sports bets during World Cup, 19 July 2026, https://fortune.com/2026/07/19/prediction-markets-sports-betting-world-cup-kalshi-polymarket-fan-duel-draftkings/
4. Bloomberg, DraftKings (DKNG) Gets Rare Sell Rating as Kalshi, Polymarket Threaten Growth, 14 May 2026, https://www.bloomberg.com/news/articles/2026-05-14/draftkings-dkng-gets-rare-sell-rating-as-kalshi-polymarket-threaten-growth
5. Boston Globe, DraftKings adds prediction market to follow Kalshi, Polymarket, 1 April 2026, https://www.bostonglobe.com/2026/04/01/business/draftkings-kalshi-polymarket-prediction-market/
6. Stateline, Kalshi and Polymarket are skirting laws on sports betting, states say, 6 March 2026, https://stateline.org/2026/03/06/kalshi-and-polymarket-are-skirting-laws-on-sports-betting-states-say/
7. CFTC.gov, CFTC Sues Wisconsin to Reaffirm its Exclusive Jurisdiction Over Prediction Markets, Press Release 9220-26, 28 April 2026, https://www.cftc.gov/PressRoom/PressReleases/9220-26
8. IMGL, Will prediction markets come to Europe, IMGL Magazine Volume 3 No 1, 2026, https://www.imgl.org/publications/imgl-magazine-volume-3-no-1/will-prediction-markets-come-to-europe/