Kalshi Hits $22 Billion, Polymarket $15 Billion as 17 States Challenge Prediction Markets
Updated
Updated · CNBC · May 22
Kalshi Hits $22 Billion, Polymarket $15 Billion as 17 States Challenge Prediction Markets
6 articles · Updated · CNBC · May 22
Kalshi said its valuation doubled to $22 billion from $11 billion in December, while Polymarket reportedly reached $15 billion from $9 billion in October despite escalating regulatory fights.
Seventeen states are challenging prediction-market operators including Kalshi, Polymarket, Coinbase and Robinhood, arguing sports event contracts amount to gambling; one state has moved to ban them entirely.
The CFTC says those contracts fall under its authority over swaps and derivatives, setting up a jurisdiction battle with states that executives expect could take years and possibly reach the Supreme Court.
Flutter and DraftKings said they will keep investing in prediction-market businesses, while CME's Terrence Duffy said growth is increasingly coming from politics, economics and financial contracts under less scrutiny.
Congress is also stepping in: House Oversight Chairman James Comer said he is seeking information from Kalshi and Polymarket on their internal controls against insider trading.
As billions flow into prediction markets, will they be treated as financial tools or as high-stakes digital gambling?
How can insider trading be stopped in markets where secret information itself is the prize?
Beyond profits and losses, what are the unseen societal costs of betting on the future?
Prediction Markets at a Crossroads: $1 Trillion Industry Faces Supreme Court Showdown and Regulatory Reckoning
Overview
Prediction markets like Kalshi and Polymarket have seen explosive growth and rising popularity since April–May 2026, allowing users to buy event contracts that pay out for accurate predictions. These platforms, offering nearly identical products and marketing themselves as both 'truth machines' and sports betting sites, have attracted strong investor interest. However, their rapid expansion has led to mounting legal and regulatory challenges, including state-level cease-and-desist orders and federal intervention. The resulting uncertainty has caused a divergence in their valuations and intensified competition, highlighting the high stakes for platforms, users, and investors as the industry navigates a complex regulatory landscape.