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

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

Those figures are monumental for a product line that’s barely six months outdated, since DraftKings solely launched Predictions in December 2025. Seen towards the broader class, although, they present an organization that’s 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 May. Kalshi, by comparability, processed $17.9 billion in May alone.

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

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

You can maintain till the occasion resolves or promote early on the going value, simply as you’d with a inventory. That construction primarily makes these platforms behave like monetary exchanges, with order books and continuously transferring costs, which is a big a part of why so many corporations are rushing 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 larger than what truly occurred.

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

May 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 month throughout 2025. The prediction markets class DraftKings simply entered already strikes more cash than the trade DraftKings got here from.

However, it is vital to notice that each platform measures quantity in another way. Robinhood skips {dollars} altogether and reviews the variety of contracts traded, a determine that sounds astronomical as a result of contracts nearly at all times value lower than a greenback each.

Its CEO, Vlad Tenev, stated over 12 billion contracts had been traded on the platform in 2025 and predicted the enterprise might finally drive “trillions” in annual quantity, whereas Deutsche Bank counted more than 16 billion contracts up to now in 2026. The measures fluctuate, however each model of the mathematics results in the identical place: DraftKings’ May quantity is roughly what Kalshi strikes in per week.

Sports are the engine pulling all of this ahead, which explains why a sportsbook felt compelled to point out up. Sports 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 nicely, touchdown days into the 2026 World Cup and simply after the NBA Finals, and one estimate put potential World Cup prediction market exercise as high as $2.5 billion.

What the sportsbooks are actually chasing

Each aspect of this battle has weapons that the opposite lacks. Sportsbooks deliver hundreds of thousands of present clients, well-known manufacturers, cost infrastructure, enormous advertising and marketing budgets, and years of expertise in pricing dwell odds.

The prediction-native platforms deliver 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 traders 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 full market it might tackle to between $55 billion and $80 billion.

That authorized construction is the entire motive this class exists. Sports betting in America is ruled state by state, and each sportsbook wants a license in each state the place it operates. Event contracts take a distinct authorized route: they’re categorized 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’s how DraftKings launched Predictions in 38 states, together with a number of the place on-line sports activities betting stays unlawful.

Whether that route survives is now the central authorized battle in American playing. A federal appeals court docket dominated on April 6 that Kalshi’s sports activities contracts seemingly fall beneath unique federal jurisdiction, shielding them from New Jersey’s playing enforcement.

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

Meanwhile, 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 stress spreading abroad, from consumer probes in South Korea to platform blocks in Brazil.

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

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

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

The break up additionally runs by means of the sportsbook trade itself. DraftKings and FanDuel quit the AGA in November 2025, days earlier than DraftKings launched Predictions, after the trade group moved to bar members that function prediction markets. The similar affiliation is now arguing in court docket that the product DraftKings simply constructed is prohibited playing.

There’s yet another factor value understanding earlier than taking any of those numbers at face worth: quantity is how a lot cash modifications arms, 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 just a few 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 stated 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. But the extra vital 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 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 a fantastic deal about whether or not the sportsbook mannequin absorbs prediction markets or will get absorbed by them.

The publish Legacy sportsbooks are chasing prediction markets that already trade billions each month appeared first on CryptoSlate.