By Tatiana Martins, journalist at G&M News.
Currently, prediction markets in the United States are entering a new phase of mainstream legitimacy. Once seen as experimental tools used mainly by crypto communities or academic forecasters, they are now evolving into a regulated, high-volume ecosystem attracting major players in both finance and gambling. With platforms expanding into sports, regulators opening new pathways, and industry giants such as Flutter stepping into this space, 2025 is shaping up to be the breakout year for prediction markets in America.
A rapidly expanding segment
The growth of prediction markets in the U.S. has accelerated dramatically over the past two years. What started as a niche corner of the derivatives world is now a fast-scale industry trading billions in contracts tied to real-world events. The appeal is simple: users can buy or sell “shares” tied to the likelihood of an outcome, anything from inflation levels and elections to game results and player performance.
This “price equals probability” model has captured a new generation of users who want more control and transparency than traditional betting formats offer. Instead of odds set by bookmakers, these markets are shaped dynamically by supply, demand, information flow, and user sentiment.
Sports as the new engine of growth
One of the most important trends driving the boom is the rise of sports prediction markets. As regulatory frameworks evolve, platforms that used to focus primarily on economic indicators or political outcomes are now shifting heavily toward sports.
Sports events have several advantages: constant cycles of games and data, large, emotionally invested audiences, abundant public information, and natural volatility and narrative shifts. These characteristics make sports ideal for event-contract trading. Users can speculate not only on match results, but on milestones, seasonal outcomes, and even micro-events that change in real time.
This shift is transforming the gaming industry. Sports trading volume has begun to rival, and in some cases surpass, traditional macroeconomic or political markets, drawing liquidity from everyday fans, sophisticated traders, and crossover bettors seeking new forms of engagement.
Regulatory momentum: the CFTC enters the arena
The expansion of prediction markets has been fueled by clearer regulatory pathways, particularly through the U.S. Commodity Futures Trading Commission (CFTC), which oversees “event contracts.”
This structure allows platforms to operate legally in states where traditional sports betting remains restricted. Instead of framing outcomes as “bets,” they are treated as tradable derivatives tied to measurable events. This regulatory approach is attracting significant institutional interest and giving prediction markets a legitimacy they have never had before.
Kalshi, Polymarket, and the race for leadership
Two platforms have emerged as dominant forces in the U.S. market:
Kalshi: A fully regulated event-contract exchange, Kalshi has expanded aggressively into sports, introducing markets tied to major American leagues. As sports trading continues to grow, Kalshi is evolving from a macro-data exchange into a hybrid platform that blends financial speculation with sports engagement.
Polymarket: Originally a blockchain-based prediction market operating globally, Polymarket has gained new momentum as it builds compliant pathways into the U.S. market. Known for high-volume trading on cultural and political events, the platform is increasingly aligning itself with regulated frameworks that allow expansion into sports, a category that continues to gain user traction.
Together, these companies are shaping a competitive environment defined by liquidity battles, regulatory navigation, and user acquisition in a fast-moving industry.
Flutter enters the game: FanDuel predicts
The clearest sign that prediction markets have gone mainstream is the entrance of Flutter Entertainment, owner of FanDuel, the leading sportsbook in the U.S. Flutter and CME Group, the world’s largest derivatives marketplace, announced a new platform called ‘FanDuel Predicts,’ scheduled to launch in December 2025. The partnership combines:
- FanDuel’s enormous U.S. audience
- CME’s regulatory and infrastructure expertise
- A growing category of users familiar with micro-trading and event speculation
FanDuel Predicts is designed to offer regulated prediction markets, including those tied to sports outcomes, through a structure compliant with the CFTC. This move positions Flutter to reach consumers in states where traditional online sports betting is limited or prohibited, expanding its footprint through a product category outside traditional regulation.
For the U.S. iGaming market, this is a milestone: the largest sportsbook operator in the country is formally embracing prediction-based trading.
A new hybrid between trading and betting
The surge of prediction markets reflects a broader cultural and technological shift. Today’s users are accustomed to real-time data, social-driven narratives, financialized entertainment, and rapid participation in public events.
Prediction markets sit exactly at the intersection of these behaviors. They merge the dynamics of trading with the engagement of sports betting, offering a participatory, transparent, and user-driven way to interpret real-world events.
This hybrid format is likely to influence the entire U.S. betting ecosystem. Sportsbooks, trading firms, and exchanges are already watching closely, as prediction markets begin to blur traditional industry boundaries.
The next phase of the U.S. prediction market explosion
The next chapter of prediction markets in the U.S. is already taking shape, and it’s moving fast. Sports event contracts are on track to become genuinely mainstream, expanding far beyond early adopters and into the daily habits of American fans. At the same time, CFTC-compliant structures are opening doors in states where traditional online betting still faces legal barriers, allowing these platforms to scope audiences previously out of reach.
Competition is intensifying as Kalshi and Polymarket fight for market share, and Flutter steps into the arena with a product built for scale. The entrance of larger players is also beginning to attract institutional liquidity, adding depth, stability and credibility to a segment once dominated by retail speculation.
Perhaps the most defining shift, however, is cultural. Trading behaviors and fans preferences are merging, creating a new kind of user who doesn’t see a strict line between following sports, interpreting data or participating in financialized entertainment. What once lived on the fringes of finance is now becoming a central element of the U.S. wagering landscape, and prediction markets are positioning themselves not just to grow, but to reshape how Americans interact with uncertainty itself.