An Operator’s Guide to the Prediction Market Boom Copy

Prediction markets are a new trend in global iGaming and future options industries. Platforms that let you bet on the likelihood of any event, or even create your own, have been around for a long time. One of the leaders in this space, Polymarket, launched in 2020, but they are clearly in their “prime era” right now.

Trading volumes on Polymarket and Kalshi skyrocketed from $500 million to $6 billion between June 2025 and January 2026, even as the broader crypto market was taking a hit.

Users no longer want to guess all by themselves whether we have entered a “bear crypto market” or if this is just a temporary dip; instead, they are downloading prediction market apps faster than ever. Over the past year, Polymarket downloads jumped from 30,000 to over 400,000, while Kalshi went from 80,000 to 1.3 million. Meanwhile, downloads of the Binance crypto exchange app dropped by more than half during that same time.

The market is growing at a massive rate, overshadowing traditional sportsbooks. More and more people want to bet on anything and everything without needing to understand sports rules like offsides or game sets. Operators like Underdog are already carrying out large-scale layoffs as part of a strategic shift toward prediction markets.

It feels like the tectonic plates are shifting: the kind of change where the world won’t be the same afterward. In many ways, this situation mirrors the sweepstakes casino craze of 2024–2025, when legal regulations couldn’t keep up with the hype.

We created this prediction market review so you can get your piece of this brand-new pie. Inside, you will find a detailed breakdown of the current trends, legal requirements, restrictions, and the specific risks and opportunities that matter in 2026.

What are Prediction Markets

Prediction markets are platforms that let anonymous users gamble on uncertainty and place “predictions” rather than bets.

The events can be anything. These might be the outcome of elections in any country, the passing of laws, referendums, the resignation of politicians, the results of sports matches, inflation rates, hurricanes, release dates for TV shows, epidemics, wars, and even the existence of aliens and their upcoming visit to Earth. This is a new “stock market for trends” that is evolving in the “attention economy.”

It seems this is exactly what users want because geopolitical events in the Middle East sparked a huge amount of trading on Polymarket, totaling $529 million within a few days.

Prediction market platforms are similar to futures markets, where traders bid up and down the price of a future contract based on their expectation of what the future price of the asset will be. 

In prediction markets, traders bid on the outcome of a specific event or create their own. One way or another, participants buy "yes" or "no" contracts that pay $1 if correct. 

Picture this: there is a market on "Will Team A win the Super Bowl?" You can buy "yes" shares for 60 cents each. If Team A wins, each share pays $1, which means your profit is 40 cents per share. If they lose, it’s worth $0. The 60-cent price means the crowd sees a 60% chance of victory, which is cheaper than $1 because it's not a sure thing. 

Anyone can buy or sell anytime, so the market prices self-correct as traders bet based on new info, balancing optimism and pessimism.