Prediction Markets Could Eclipse Sports Betting by 2030

A Market Growing Faster Than Almost Anyone Expected

When regulators barely blinked, an industry sprinted. Prediction markets, platforms where users stake money on the outcome of real-world events, grew 400% in a single year, jumping from $9 billion in 2024 to a projected $40 billion by the close of 2025. The consensus forecast has the sector hitting $1 trillion by 2030, which would put it well ahead of the entire $300 billion sports betting industry.

That trajectory is hard to ignore. As Neeta Bidwai lays out in this episode, the key catalyst was a quiet but consequential shift at the CFTC, the federal agency that had previously treated these platforms with deep suspicion. Under the prior administration, the CFTC was firmly opposed to unregulated prediction markets. That position has reversed sharply since 2025, with the agency now taking the view that federal preemption of state gambling laws is sufficient cover.

The result: Polymarket and Kalshi together control roughly 90% of trading volume, and the money chasing that position is no longer just retail. Intercontinental Exchange, the parent company of the New York Stock Exchange, recently invested $2 billion in Polymarket at a $9 billion valuation. Kalshi moved differently, integrating with Robinhood to tap into a base of more than 27 million brokerage accounts. Traditional sportsbooks and casino operators are also circling.

The Regulatory Fight That Could Change Everything

The boom has a real ceiling risk, and it lives in the courts. Two federal circuits have now issued conflicting rulings on whether state gambling laws can reach prediction markets: one out of Nevada, another out of New Jersey. A circuit split of that kind is precisely what lands cases at the Supreme Court, and Neeta flags this as a near-certain destination for the regulatory question.

States have significant skin in this game. Gambling has historically been regulated at the state level, with Nevada as the obvious standard-bearer, but also tribal casinos and other licensed operators whose entire business models rest on that jurisdictional authority. A federal preemption ruling could upend decades of precedent and strip states of a lucrative oversight role they have no intention of surrendering quietly.

The Venezuela extradition story adds some texture here. Reports surfaced that someone made a remarkably well-timed wager on prediction markets tied to exactly when a high-profile extradition would occur. It is the kind of anecdote that will energize both proponents of these markets and the regulators who argue they are a vector for information asymmetry at best, and insider trading at worst.

The Supreme Court's Own Credibility Problem

The timing of the prediction markets case arriving at the Supreme Court carries an irony that Neeta does not let pass. A new study from the National Bureau of Economic Research finds that the court has shown a measurable pro-wealth bias in its rulings since 1953, and, critically, that the economic stakes of a case are a better predictor of the outcome than any cultural or overt political consideration.

That finding lands differently when you understand the context. Public approval of the Supreme Court is at an all-time low. The NBER research suggests that what ordinary Americans have been sensing intuitively about the court's alignment has empirical backing. A market structure question worth potentially trillions of dollars, fought between well-funded platforms and entrenched state interests, arriving at a court that the data says tilts toward wealth and power, is not a neutral setting.

What Comes Next

The mechanics of where this lands are straightforward: the Supreme Court either affirms federal preemption and hands prediction markets a national runway, or it restores state authority and fragments the market into a patchwork of local rules. Neither outcome is clean.

If federal preemption holds, expect the institutional money already arriving to accelerate. A lightly regulated, nationally accessible prediction market starts to look less like a novelty and more like a liquid financial instrument, which is exactly how the platforms want to be seen. If states regain authority, the compliance burden rises sharply and the growth curve bends.

What is not in doubt is that the window between now and that ruling is a high-stakes period for everyone involved, from the platforms and their investors to the casinos and sportsbooks that have been watching from the sideline and quietly deciding whether to jump in. The race to scale before the rules are set is already underway.