Kalshi Takes Majority Share of US Prediction Market Volume

Kalshi now controls about 89% of measured US prediction market volume, according to a Bank of America report that showed the market continuing to grow while competition narrowed.  

Total weekly volume rose 4% from last week. Kalshi posted a 6% increase, Crypto.com also grew, and Polymarket fell 16%. That left Polymarket with roughly 7% of the market and Crypto.com with 4%, a sharp gap that suggested trading activity was focusing more on platforms with a clearer regulatory foundation in the US. 

The report tied that shift to the growing divide between federally regulated and crypto-based operators. Kalshi operates as an exchange regulated by the Commodity Futures Trading Commission (CFTC), and presents its contracts as derivatives rather than gambling products.  

That status has helped it pull ahead as the legal fight over prediction market apps moves from theory into courtrooms. 

Polymarket, by contrast, runs on a blockchain and has operated outside the US. It has attracted global liquidity, but its domestic position has remained weaker. As regulators and courts have become more involved, that difference has mattered more. The report suggested the market is not just growing, but consolidating around operators that can defend a regulated US model. 

That legal backdrop has started to shape commercial outcomes. The CFTC has aggressively backed prediction markets, suing states and arguing that federal law overrides state gambling restrictions.  

The agency has also issued guidance clarifying that sports betting is treated as entertainment and that event contracts are financial tools used for hedging. Bank of America's figures suggested that the argument is not staying confined to legal briefs. It is already influencing where trading volume goes. 

Federal appeals court backs Kalshi in New Jersey

The ongoing tension became more concrete this week when a federal appeals court ruled that New Jersey's gaming regulator cannot stop Kalshi from offering sports-related event contracts in the state. 

A 2-1 panel of the Third Circuit held that the CFTC has exclusive jurisdiction over those contracts, marking the first federal appellate decision on the central legal issue surrounding prediction markets. 

The case grew out of New Jersey's effort to block Kalshi after the state argued the company was offering unlicensed sports betting products, including contracts that touched collegiate sports.  

Kalshi responded that its contracts were swaps under the Commodity Exchange Act and therefore subject only to federal oversight. A lower court agreed and issued a preliminary injunction, and the appeals court left that outcome in place. 

The ruling aligned with the CFTC's position in other cases. Last week, the agency sued Arizona, Connecticut, and Illinois, arguing those states were making unlawful attempts to regulate prediction markets.  

New Jersey Attorney General Jennifer Davenport said the office was reviewing its options after the decision and warned that the ruling could allow some firms to offer sports gambling without complying with the rules imposed on licensed operators.