The rapid rise of sports prediction markets took first place for the biggest story in the U.S. betting industry last year. The momentum hasn’t dropped off in 2026.
Businesses offering contracts on sports events are now being valued in the billions, and with the help of relentless advertising this year, they have familiarized themselves with the American public entering the NFL season.
Proponents of prediction markets, in which people trade contracts tied to the result of future real-world events, describe them as a revolutionary asset class and, in the words of Kalshi CEO Tarek Mansour, a “truth machine.”
They claim the markets are more accurate than polls or other statistical prediction models, while being useful as a tool to hedge against the financial effects of real-world events.
Critics counter that sports futures trading is no different than gambling and must be regulated and taxed as such on a state-by-state basis. In December 2024, sports prediction markets became available in all 50 states, overseen by the federal Commodity Futures Trading Commission (CFTC). But court decisions, such as the 9th Circuit Court of Appeals denying an injunction request from Kalshi, have forced some operators to stop offering sports prediction market wagers in certain states.
