Prediction Markets Capture 27% of Sports Bets During World Cup, Threatening Traditional Sportsbooks

Prediction-market trading surged during the World Cup, reaching an estimated 27% of all legal US sports-betting volume, up from 9% at the start of the year, according to H2 Gambling Capital. Kalshi, the largest prediction market platform, repeatedly broke its own trading records and had more daily app users than DraftKings or FanDuel during the tournament. The growth highlights the competitive threat prediction markets pose to traditional sportsbooks, enabled by a friendly federal regulator (CFTC) that allows them to offer innovative betting products, serve customers from states where sports gambling is illegal, and accept users over 18. While gambling companies like DraftKings and FanDuel have launched their own prediction market products, their stocks slumped more than 25% on the year. Analysts are divided on whether prediction markets represent a fundamental shift or cater to a different, less lucrative audience.