Prediction Markets Could Top $1T in Annual Volume Says New Report

A brand new trade report launched this week by playing trade media and occasions agency NEXT.io suggests prediction markets might develop right into a trillion-dollar buying and selling market, as exercise round sports activities and different occasion contracts accelerates.

The report estimates world prediction market transaction quantity reached $63.5 billion in 2025, up roughly 400% from the earlier 12 months, citing trade analyses from companies together with Eilers & Krejcik Gaming and Citizens Financial Group. It initiatives weekly buying and selling might finally attain $25 billion, implying a possible $1.3 trillion annual market if progress continues. Separate evaluation from Citizens suggests the sector might finally generate greater than $10 billion in annual income by 2030, as buying and selling volumes develop and institutional participation expands.

The 57-page report, titled Prediction Markets and Online Sports Betting: The Winners, the Losers, and How to Navigate a New Frontier, was launched to coincide with NEXT Summit: New York 2026, a playing and sports activities betting trade convention in Manhattan that’s anticipated to attract greater than 1,200 executives, buyers and operators for discussions on rising sectors.

Current market exercise supplies further context for the report’s projections. Data from DeFi Rate’s live prediction market dashboard, which tracks exercise throughout prime platforms together with Kalshi and Polymarket, reveals weekly buying and selling volumes repeatedly topping $5 billion, with peak periods approaching $6 billion.

Sports contracts driving prediction market exercise

Sports markets account for the overwhelming majority of exercise in prediction markets, highlighting why the class has drawn growing consideration from each sportsbooks and regulators. Long-term progress might rely in half on whether or not prediction markets develop past sports activities into different occasion classes and appeal to larger participation from institutional merchants.

Trading class combine

“More than 90% of present quantity in the market is in sports activities, and it’s primarily retail-driven,” mentioned DJ Hennes, advisory managing director on the U.S. arm of world accounting and consulting agency KPMG, in commentary included in the report. “The large questions our shoppers are asking are: What will that blend appear like in 5 years? Will politics, local weather, financials, or company occasions take up extra share? And will establishments begin taking part in a extra significant method? I feel the reply to each is sure.”

For the week of March 2-8, a notably slower week for sports activities, Kalshi‘s sports activities class accounts for 69.7% of its quantity, in response to Dune. That quantity possible undersells the total make-up of sports activities, because the second-highest class “Exotics” (13.4%) consists of combos (parlays) that are primarily sports-related for now. Meanwhile, crypto made up 9% and politics simply 2.0% in the identical week. Lately, Kalshi’s sports activities quantity has been trending round 80% of its weekly complete, our most up-to-date volume reports present.

Polymarket‘s sports activities buying and selling quantity can also be surging, crossing $1B for the primary time final week and accounting for 40.8% of its complete weekly platform quantity. Polymarket runs notably extra diversified — its prime 3 classes are all above 20%, whereas Kalshi outdoors of sports activities drops off sharply. Last week, crypto made up 29.0%, politics 20.4% and Polymarket’s “Trump” class represented 6.3% of complete quantity.

Sports contract progress unattainable to disregard

Analysts cited in the NEXT.io report estimate that between 5% and 10% of U.S. sports activities betting exercise might finally migrate to prediction markets, a shift that would reshape competitors between conventional sportsbooks and occasion contract exchanges. However, the report additionally warns the class’s speedy progress might face important draw back threat if regulators finally prohibit sports activities contracts. In such a situation, buying and selling quantity throughout prediction markets might decline by as a lot as 80%, in response to the evaluation.

The dominance of sports event contracts displays the best way prediction markets have developed over the previous 12 months. Platforms now listing markets on recreation outcomes, participant efficiency and different sports-related occasions, attracting a retail viewers that always overlaps with conventional sports activities bettors.

Industry observers cited in the report say the dominance of sports activities markets has begun drawing curiosity from established playing operators and buyers who see prediction markets as a probably new buying and selling class relatively than merely one other format for sports activities wagering.

“Prediction markets have reached an inflection level,” mentioned Meredith McPherron, CEO and managing associate of DraftKings’ enterprise capital arm, Drive by DraftKings. “Seeing $1.3B+ traded on Super Bowl Sunday alone made it clear that is now not area of interest, it’s changing into an actual, investable class.”

A race to construct the prediction market ecosystem

The report additionally describes the prediction market trade as getting into a aggressive buildout part, with exchanges, sportsbooks and fintech companies racing to ascertain platforms and seize buying and selling exercise.

Analysts cited in the report characterize the present surroundings as a “land seize,” with new entrants searching for to construct infrastructure, appeal to liquidity and safe regulatory positioning earlier than the market matures.

“Our baseline view is that there’s something very actual right here. There’s a real use case, actual demand, and an rising market construction round occasion contracts,” mentioned Shaun Kelley, gaming, lodging and leisure fairness analysis analyst at Bank of America. 

“At the second, this market reveals all of the indicators of an early-stage land seize,” Kelley continued. “That’s sometimes adopted by a shakeout. You have high valuations, unclear unit economics, and intense value competitors. Everyone rushes in, raises capital, and chases progress. Then actuality units in and solely a handful of gamers emerge as long-term winners.”

Kalshi and Polymarket are at present the dominant gamers, in response to the report, which says each corporations helped convey prediction markets into the mainstream by attracting retail merchants and constructing liquidity round main occasions.

At the identical time, the report means that distribution platforms might play an more and more necessary position in shaping the market’s improvement. Brokerage companies with massive retail buying and selling bases, like Robinhood, might finally decide the place buying and selling exercise flows by routing consumer orders to particular exchanges. The report notes that Robinhood funnels a big share of U.S. prediction market quantity to Kalshi, illustrating how dealer platforms can affect liquidity throughout the ecosystem.

Prediction markets face a regulatory crossroads

Consumer curiosity in prediction markets has additionally grown quickly alongside buying and selling exercise, in response to knowledge cited in the report. Search demand for the class rose from roughly 1.7 million queries in early 2025 to greater than 8.6 million by early 2026, reflecting rising public consciousness of occasion contract buying and selling platforms.

The NEXT.io report concludes that if prediction markets proceed to achieve traction, they may reshape the broader U.S. playing panorama in surprising methods. If prediction platforms seize a significant share of sports activities wagering exercise, some states might really feel much less urgency to legalize conventional sportsbooks.

Instead, lawmakers in states that depend on playing taxes might more and more look towards on-line on line casino gaming as a extra predictable income, the report states. Online on line casino merchandise generate steadier returns than sports activities betting, probably permitting states to offset income losses with out instantly competing with federally-regulated occasion markets.

There can also be the opportunity of federal intervention, the report notes, as policymakers take into account whether or not present playing and commodities legal guidelines must be up to date to make clear the authorized standing of prediction markets, a query analysts say might finally decide how the trade develops.

“The actual query, whether or not this can be a bubble or one thing structurally sturdy, comes down nearly completely to regulation,” mentioned Bank of America’s Kelley. “The regulatory backdrop continues to be fluid.”

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