Prediction markets are exchanges where participants buy and sell contracts on the outcomes of real-world events: elections, sports matches, and economic indicators. The price of a contract reflects the collective assessment of the probability of an event.
This is neither a casino nor a traditional exchange — the platform does not set prices and has no stake in the outcome.
This is neither a casino nor a traditional exchange — the platform does not set prices and has no stake in the outcome.
How It Works
🔵 Each contract has a nominal value of $ 1 and settles at $ 1 (event occurs) or $ 0 (does not occur)
🔵 Contract price = probability of the event. A contract priced at $ 0.80 implies an 80% probability
🔵 Buying 1,000 contracts at $ 0.25 costs $ 250 — if the prediction is correct, the payout is $ 1,000 (4x)
🔵 After the event occurs, an independent oracle confirms the outcome and triggers payouts
Market Growth
🔴 Trading volume: from less than $ 100M in early 2024 to $ 13B by the end of 2025
🔴 Number of users: from 4,000 to 600,000
🔴 ICE (the parent company of the New York Stock Exchange) invested up to $ 2B in Polymarket
🔴 Robinhood, Coinbase, DraftKings, FanDuel, CNN, and Google entered the market
Key Platforms
🔵 Polymarket — the largest decentralized platform. At the end of 2025, it returned to the U.S. market as a regulated entity
🔵 Kalshi — the first platform licensed by the CFTC, trading contracts in USD
🔵 PredictIt — a non-profit political platform focused on U.S. elections
🔵 Robinhood — added event contracts through a partnership with Kalshi
Regulation
🔴 In the U.S., Kalshi operates under CFTC oversight — providing federal coverage across all states
🔴 In March 2026, the CFTC issued a preliminary notice on developing unified rules
🔴 Kalshi is involved in more than 30 legal disputes with states that classify these contracts as gambling
🔴 In the EU, most countries classify prediction markets as gambling. The United Kingdom, Germany, and the Netherlands have introduced restrictions for unlicensed platforms
Taxation & Monetization
🔵 Platforms generate revenue from transaction fees on each trade and from the sale of aggregated data
🔵 For traders in the U.S., profits may be taxed either as investment income or as gambling winnings — the IRS has not yet made a final decision
🔵 In most countries, platforms do not automatically generate tax reports — traders must declare their income independently
Summary
Prediction markets have evolved from a niche tool into a multi-billion-dollar segment in just two years. Exchanges, brokers, and major financial companies have entered the space, the user base has grown 150 times, and platforms have obtained their first federal licenses.
However, the regulatory landscape remains fragmented: dozens of legal disputes are ongoing in the U.S., while in Europe most countries classify this instrument as gambling. There are no unified rules in either region.
🔵 Each contract has a nominal value of $ 1 and settles at $ 1 (event occurs) or $ 0 (does not occur)
🔵 Contract price = probability of the event. A contract priced at $ 0.80 implies an 80% probability
🔵 Buying 1,000 contracts at $ 0.25 costs $ 250 — if the prediction is correct, the payout is $ 1,000 (4x)
🔵 After the event occurs, an independent oracle confirms the outcome and triggers payouts
Market Growth
🔴 Trading volume: from less than $ 100M in early 2024 to $ 13B by the end of 2025
🔴 Number of users: from 4,000 to 600,000
🔴 ICE (the parent company of the New York Stock Exchange) invested up to $ 2B in Polymarket
🔴 Robinhood, Coinbase, DraftKings, FanDuel, CNN, and Google entered the market
Key Platforms
🔵 Polymarket — the largest decentralized platform. At the end of 2025, it returned to the U.S. market as a regulated entity
🔵 Kalshi — the first platform licensed by the CFTC, trading contracts in USD
🔵 PredictIt — a non-profit political platform focused on U.S. elections
🔵 Robinhood — added event contracts through a partnership with Kalshi
Regulation
🔴 In the U.S., Kalshi operates under CFTC oversight — providing federal coverage across all states
🔴 In March 2026, the CFTC issued a preliminary notice on developing unified rules
🔴 Kalshi is involved in more than 30 legal disputes with states that classify these contracts as gambling
🔴 In the EU, most countries classify prediction markets as gambling. The United Kingdom, Germany, and the Netherlands have introduced restrictions for unlicensed platforms
Taxation & Monetization
🔵 Platforms generate revenue from transaction fees on each trade and from the sale of aggregated data
🔵 For traders in the U.S., profits may be taxed either as investment income or as gambling winnings — the IRS has not yet made a final decision
🔵 In most countries, platforms do not automatically generate tax reports — traders must declare their income independently
Summary
Prediction markets have evolved from a niche tool into a multi-billion-dollar segment in just two years. Exchanges, brokers, and major financial companies have entered the space, the user base has grown 150 times, and platforms have obtained their first federal licenses.
However, the regulatory landscape remains fragmented: dozens of legal disputes are ongoing in the U.S., while in Europe most countries classify this instrument as gambling. There are no unified rules in either region.