A fully automated trading bot executed 8,894 trades on short-term crypto prediction contracts and reportedly generated nearly $150,000 without human intervention.

The strategy, described in a recent post circulating on X, exploited brief moments when the combined price of “Yes” and “No” contracts on five-minute bitcoin and ether markets dipped below $1. In theory, those two outcomes should always add up to $1. If they don’t, say they trade at a combined $0.97, a trader can buy both sides and lock in a three-cent profit when the market settles.

That works out to roughly $16.80 in profit per trade — thin enough to be invisible on any single execution, but meaningful at scale. If the bot was deploying around $1,000 per round-trip and clipping a 1.5-to-3% edge each time, it becomes the kind of return profile that looks boring on a per-trade basis but impressive in aggregate. Machines don't need excitement. They need repeatability.

It sounds like free money. In practice, such gaps tend to be fleeting, often lasting milliseconds. But the episode highlights something bigger than a single glitch: crypto’s prediction markets are increasingly becoming arenas for automated, algorithmic trading strategies, and an emerging AI-driven arms race.

As such, typical five-minute bitcoin prediction contracts on Polymarket carry order-book depth of roughly $5,000 to $15,000 per side during active sessions, data shows. That's several orders of magnitude thinner than a BTC perpetual swap book on major exchanges such as Binance or Bybit.

A desk trying to deploy even $100,000 per trade would blow through available liquidity and wipe out whatever edge existed in the spread. The game, for now, belongs to traders comfortable sizing in the low four figures.

When $1 isn’t $1

Prediction markets like Polymarket allow users to trade contracts tied to real-world outcomes, from election results to the price of bitcoin in the next five minutes. Each contract typically settles at either $1 (if the event happens) or $0 (if it doesn’t).

In a perfectly efficient market, the price of “Yes” plus the price of “No” should equal exactly $1 at all times. If “Yes” trades at 48 cents, “No” should trade at 52 cents.

But markets are rarely perfect. Thin liquidity, fast-moving prices in the underlying asset and order-book imbalances can create temporary dislocations. Market makers may pull quotes during volatility. Retail traders may aggressively hit one side of the book. For a split second, the combined price might fall below $1.

For a sufficiently fast system, that’s enough.

These kinds of micro-inefficiencies are not new. Similar short-duration “up/down” contracts were popular on derivatives exchange BitMEX in the late 2010s, before the venue eventually pulled some of them after traders found ways to systematically extract small edges. What’s changed is the tooling.

Early on, retail traders treated these BitMEX contracts as directional punts. But a small cohort of quantitative traders quickly realized the contracts were systematically mispriced relative to the options market — and began extracting edge with automated strategies that the venue's infrastructure wasn't built to defend against.

BitMEX eventually delisted several of the products. The official reasoning was low demand, but traders at the time widely attributed it to the contracts becoming uneconomical for the house once the arb crowd moved in.

Today, much of that activity can be automated and increasingly optimized by AI systems.

Beyond glitches: Extracting probability

The sub-$1 arbitrage is the simplest example. More sophisticated strategies go further, comparing pricing across different markets to identify inconsistencies.

Options markets, for instance, effectively encode traders’ collective expectations about where an asset might trade in the future. The prices of call and put options at various strike prices can be used to derive an implied probability distribution, a market-based estimate of the likelihood of different outcomes.

In simple terms, options markets act as giant probability machines.

If options pricing implies, say, a 62% probability that bitcoin will close above a certain level over a short time window, but a prediction market contract tied to the same outcome suggests only a 55% probability, a discrepancy emerges. One of the markets may be underpricing risk.

Automated traders can monitor both venues simultaneously, compare implied probabilities and buy whichever side appears mispriced.

Such gaps are rarely dramatic. They may amount to a few percentage points, sometimes less. But for algorithmic traders operating at high frequency, small edges can compound over thousands of trades.

The process doesn’t require human intuition once it’s built. Systems can continuously ingest price feeds, recalculate implied probabilities and adjust positions in real time.

Enter the AI agents

What distinguishes today’s trading environment from prior crypto cycles is the growing accessibility of AI tools.

Traders no longer need to hand-code every rule or manually refine parameters. Machine learning systems can be tasked with testing variations of strategies, optimizing thresholds and adjusting to changing volatility regimes. Some setups involve multiple agents that monitor different markets, rebalance exposure and shut down automatically if performance deteriorates.

In theory, a trader might allocate $10,000 to an automated strategy, allowing AI-driven systems to scan exchanges, compare prediction market prices with derivatives data, and execute trades when statistical discrepancies exceed a predefined threshold.

In practice, profitability depends heavily on market conditions and on speed.

Once an inefficiency becomes widely known, competition intensifies. More bots chase the same edge. Spreads tighten. Latency becomes decisive. Eventually, the opportunity shrinks or disappears.

The larger question isn't whether bots can make money on prediction markets. They clearly can, at least until competition erodes the edge. But what happens to the markets themselves is the point.

If a growing share of volume comes from systems that don't hold a view on the outcome — that are simply arbitraging one venue against another — prediction markets risk becoming mirrors of the derivatives market rather than independent signals.

Why big firms aren’t swarming

If prediction markets contain exploitable inefficiencies, why aren’t major trading firms dominating them?

Liquidity is one constraint. Many short-duration prediction contracts remain relatively shallow compared with large crypto derivatives venues. Attempting to deploy significant capital can move prices against the trader, eroding theoretical profits through slippage.

There is also operational complexity. Prediction markets often run on blockchain infrastructure, introducing transaction costs and settlement mechanisms that differ from those of centralized exchanges. For high-frequency strategies, even small frictions matter.

As a result, some of the activity appears concentrated among smaller, nimble traders who can deploy modest size, perhaps $10,000 per trade, without materially moving the market.

That dynamic may not last. If liquidity deepens and venues mature, larger firms could become more active. For now, prediction markets occupy an in-between state: sophisticated enough to attract quant-style strategies, but thin enough to prevent large-scale deployment.

A structural shift

At their core, prediction markets are designed to aggregate beliefs to produce crowd-sourced probabilities about future events.

But as automation increases, a growing share of trading volume may be driven less by human conviction and more by cross-market arbitrage and statistical models.

That doesn’t necessarily undermine their usefulness. Arbitrageurs can improve pricing efficiency by closing gaps and aligning odds across venues. Yet it does change the market's character.

What begins as a venue for expressing views on an election or a price move can evolve into a battleground for latency and microstructure advantages.

In crypto, such evolution tends to be rapid. Inefficiencies are discovered, exploited and competed away. Edges that once yielded consistent returns fade as faster systems emerge.

The reported $150,000 bot haul may represent a clever exploitation of a temporary pricing flaw. It may also signal something broader: prediction markets are no longer just digital betting parlors. They are becoming another frontier for algorithmic finance.

And in an environment where milliseconds matter, the fastest machine usually wins.

Source: https://www.coindesk.com/markets/2026/02/21/how-ai-is-helping-retail-traders-exploit-prediction-market-glitches-to-make-easy-money

Onchain predictions market provider Polymarket has acquired the relatively fresh startup Dome for an undisclosed sum, according to an announcement on Thursday.

Dome, part of startup accelerator Y Combinator’s Fall 2025 cohort, offers a unified API for prediction markets. In other words, it allows developers to build apps, bots, dashboards, or trading tools that work across platforms like Polymarket, Kalshi, and other platforms.

The startup raised $500,000 from YC and a $4.7 million seed, according to the X bio of co-founder Kunal Roy, who was also a founding engineer at Alchemy. Kurush Dubash, the other listed co-founder, is also a founding engineer at Alchemy, according to his YC bio.

"We're excited to bring our focus on speed, reliability, and dev experience to the world’s largest prediction market!" Dome wrote on X. 

Polymarket, last valued at $9 billion, reportedly has plans to raise fresh capital at a higher valuation, but has not made many acquisitions. Its purchase of U.S.-licensed derivatives exchange QCEX spearheaded the firm's reentrance into the United States, after previously being barred by the CFTC.

The firm has signed numerous distribution deals, including sports leagues like Major League Soccer and the National Hockey League, as well as media enterprises, most recently including Substack.

Source: https://www.theblock.co/post/390546/polymarket-buys-fresh-prediction-market-api-startup-dome-marking-second-official-acquisition

Polymarket has announced an exclusive partnership with Substack, allowing newsletter authors to natively integrate live data from what the company describes as the world’s largest prediction market directly into their reporting.

The announcement was first shared via LinkedIn, where Polymarket said that “journalism is better when it’s backed by live markets,” positioning the move as a step toward data-driven independent media.

In an official blog post titled “Polymarket is Doubling Down on Substack”, the company confirmed that Substack writers can now embed live Polymarket markets directly inside the Substack editor without leaving the page. Charts and visualisations will generate automatically, removing the need for screenshots, while authors will also be able to explore trader portfolios and access expanded sports market coverage.

Polymarket launched its Substack publication, The Oracle by Polymarket, just over a year ago, aiming to bring prediction market insights to a broader news audience. The company claims its markets hold a 94.1%+ accuracy track record and highlighted past coverage of elections, US Federal Reserve modelling and political developments.

Under the new integration, Substack creators can:

– Embed any Polymarket market directly inside articles – Display auto-generated charts – Access trader portfolio insights – Integrate sports market data

The tools are live as of February 18, 2026.

Polymarket framed the collaboration as part of a broader push to integrate live market-based forecasting into independent journalism. Substack, which hosts a wide range of political, economic and cultural commentators, is described by Polymarket as “the home of fearlessly independent news and analysis.”

The company noted that further announcements regarding the partnership are expected.

Source: https://tribuna.com/en/casino/news/2026-02-19-polymarket-partners-with-substack-to-add-live-prediction-markets-to-newsletters/

Buterin Questions Short-Term Betting Culture in Crypto Markets

In a recent post published to X, Buterin said prediction markets have reached sufficient scale to support professional traders and contribute meaningfully to public discourse. At the same time, he argued that platforms appear to be “over-converging” on cryptocurrency price speculation, sports wagering, and other high-engagement trades that offer “dopamine value” but limited long-term societal benefit.

He attributed part of this shift to revenue pressures during bear markets, writing that teams may feel compelled to lean into these categories because they generate income when broader conditions are weak. Buterin described the trend as a slide toward “corposlop,” cautioning that overreliance on uninformed traders can create unhealthy product incentives.

Buterin identified three types of participants in prediction markets: “smart traders” who supply information, “naive traders” who lose money on incorrect views, and “hedgers” who accept expected losses to reduce risk. He said current platforms lean heavily on the first two categories.

One X user responded to Buterin’s critique by writing, “The Overton window on gambling has shifted enough where you should realize how off base this now sounds. Like it or not, everyone not extremely wealthy is by default now financially desperate.”

Buterin replied: “Yeah, and encouraging financially desperate people to gamble is bad because the likely outcome is that they become even more financially desperate.”

Beyond criticism, Buterin proposed repositioning prediction markets as tools for hedging. He offered an example of a biotech investor who might bet on an unfavorable election outcome to offset potential portfolio losses. In his illustration, such a trade narrows return ranges and reduces volatility, creating measurable utility even if the expected value of the bet is negative.

He also revisited ideas associated with economist Robin Hanson, noting that so-called “info buyers” who subsidize markets to extract insight face public goods challenges, since the resulting information benefits non-paying observers.

Buterin extended the hedging framework to stablecoins, questioning whether users ultimately want exposure to fiat currency or simply price stability. He suggested that heavy reliance on U.S. dollar-backed stablecoins could constrain decentralization. His criticism follows recent reports that show stablecoins dominate crypto casinos and prediction markets in terms of settlement.

In the broad crypto betting sector, stablecoins had the upper hand in 2025, and analysts expect this trend to continue going forward. As an alternative, Buterin proposed creating price indices for major categories of goods and services, paired with prediction markets tied to those indices. Individuals or businesses could hold personalized baskets representing expected future expenses, rather than a single fiat-pegged token.

Such a system, he wrote, would require markets denominated in assets participants want to hold, instead of non-interest-bearing fiat, which he said carries high opportunity costs. Buterin concluded by urging builders to focus on long-term financial infrastructure rather than short-term speculative volume. 2025 was a big year for prediction markets, and in early 2026, growth is expected to continue.

Source: https://news.bitcoin.com/ethereum-co-founder-vitalik-buterin-calls-for-prediction-market-reset/

Just months ago, Kalshi Inc. lagged far behind FanDuel and DraftKings — the dominant players in US sports betting.

Now, ahead of the Super Bowl, the crown jewel of the gambling calendar, the upstart prediction market has pulled far ahead, at least by one key metric: monthly app downloads.

In January, Kalshi was downloaded 3 million times, more than four times the tally for either DraftKings Inc. or FanDuel, a US unit of Flutter Entertainment Plc — and more than either of those companies even during their fastest periods of growth — according to the data firm Apptopia. FanDuel said it had 3.5 million active monthly users in its most recent earnings report.

“Three million downloads in a single month is a feat that no other sportsbook app, real money gaming app, or fantasy sports app has ever hit in the United States,” said Tom Grant, the vice president of research at Apptopia.

Back in August, at the start of football season, Kalshi registered less than a third as many downloads as those gambling giants, Apptopia data shows.

The snapshot offers only a partial view of a still-forming industry. Kalshi’s growth is accelerating from a modest initial footprint, having only begun taking sports wagers early last year. Kalshi’s main rival, Polymarket has mostly operated overseas and has just recently re-entered the US. It has been running behind both Kalshi and the traditional gambling apps in the Apptopia data.

The download dynamics point to the speed with which Kalshi is disrupting the gambling industry as it uses its federally regulated exchange to offer sports betting nationwide, not just in states where online wagers have been legalized.

The industry anticipates that a record $1.76 billion will be wagered on traditional sportsbooks on the contest this Sunday between the Seattle Seahawks and the New England Patriots — up 29% from last year’s game, according to the American Gaming Association.

But Kalshi and a handful of smaller competitors have been growing much faster. Ed Birkin, a senior analyst at H2 Gambling Capital, said he expects prediction markets will attract $630 million in bets for the Super Bowl and account for 80% of the year-over-year growth in wagering activity for the event.

This has allowed Kalshi to gain not just on gambling apps but also on more mainstream trading and investing companies. Robinhood, for instance, began offering Kalshi event contracts last year, but it grew at only a quarter of Kalshi’s pace in January, according to Apptopia.

On a prediction market exchange like Kalshi, bettors on opposite sides of a wager are paired up against each other, with Kalshi taking a fee from both sides. On gambling apps, the company takes the other side of every bet. Kalshi has been able to expand into states where gambling is not allowed because it is overseen by the Commodity Futures Trading Commission.

The NFL has said that Kalshi and Polymarket cannot advertise during the Super Bowl because they have not met the requirements to be official betting partners of the league.

Last year’s Super Bowl came just a few weeks after Kalshi began offering sports bets for the first time. The total volume of trading on Kalshi in the last week of January this year was about 60 times higher than a year earlier, according to user-compiled data on Dune Analytics.

Several states have taken legal steps to shut this activity down, but prediction market companies have fought back in court and continued to offer the wagers.

DraftKings and FanDuel have responded by creating their own prediction market apps, which are only available in the states where their traditional gambling products are not legal. But according to Sensor Tower, another data firm, DraftKings Predictions only got 81,000 downloads in January, and FanDuel Predictions only 18,000. Both companies have seen their stocks drop sharply in recent months.

Kalshi has been eager to distance itself from conventional gambling — and even the word gambling — emphasizing the more economically consequential areas where people are placing wagers, like elections and central bank rate decisions. But sports have accounted for a vast majority of the activity on the exchange since the beginning of the football season last fall.

Source: https://www.bloomberg.com/news/articles/2026-02-05/kalshi-downloads-zoom-past-gambling-apps-ahead-of-super-bowl

Coinbase Global Inc. announced Monday that it will acquire a derivatives clearinghouse, The Clearing Company, to boost its entry into the growing prediction markets business.

The crypto trading platform said the acquisition would help it expand on its ambitions to become “the Everything Exchange.” It comes just days after Coinbase began rolling out prediction markets and equities trading.

Coinbase already has its own derivatives exchange approved by the Commodity Futures Trading Commission.

Clearinghouses operate critical market plumbing for predictions markets, despite being less visible to the public than exchanges.

The Clearing Company is not yet operational but applied in November for approval from the Commodity Futures Trading Commission to operate a registered clearinghouse.

The startup is notable for using digital ledger technology to clear and settle trades in stablecoins, which can allow for instant settlement.

Its founder, Toni Gemayel, as well as many of The Clearing Company’s executives, are veterans of both Kalshi Inc. and Polymarket, the two dominant players in predictions markets in the US.

Coinbase said the acquisition “adds the specialized talent needed to take this category further.”

Coinbase is currently routing trades through Kalshi, which runs its own clearinghouse. A Coinbase spokesperson said the acquisition doesn’t change any plans with Kalshi.

The Clearing Company recently announced a $15 million seed round led by Union Square Ventures along with Coinbase Ventures and many other investors.

Source: https://www.bloomberg.com/news/articles/2025-12-22/coinbase-acquires-the-clearing-company-in-prediction-market-push

Robinhood Markets Inc. and Susquehanna International Group are taking over a regulated exchange that was tied to the now-defunct crypto business FTX, giving them a powerful new foothold in the fast-growing world of prediction markets.

The two firms are buying a majority stake in LedgerX, a US-based derivatives exchange once owned by FTX and now run by Miami International Holdings Inc.

The buyers already have strong ties to prediction markets. Susquehanna has said it serves as a market maker on Kalshi, the leading US prediction market exchange. Robinhood offers Kalshi’s event contracts to its retail investing clients.

The new deal will give Robinhood and Susquehanna direct control of the infrastructure needed to list and clear event contracts on their own terms, at a moment when Wall Street, sports leagues, and crypto firms are racing to shape the future of regulated speculation.

“Robinhood is seeing strong customer demand for prediction markets,” JB Mackenzie, vice president and general manager of futures and international at Robinhood, said in a statement. “Our investment in infrastructure will position us to deliver an even better experience and more innovative products for customers.”

Financial details of the transaction were not disclosed, but MIAX said it is selling 90% of the exchange to the Robinhood-led group. Robinhood said it would be the “controlling partner” in the new venture, with Susquehanna serving as a “day-one liquidity provider” so that customers have a counterparty for trading.

The move could represent a challenge for Kalshi because it has used its partnership with Robinhood to get its contracts in front of a broad audience. More than half of Kalshi’s business in recent months has come from Robinhood, according to an analysis from Bloomberg Intelligence.

In its most recent earnings release, Robinhood said that its customers traded 2.3 billion event contracts in the third quarter, more than double the quarter before.

“I’m sure Kalshi is counting the activity that we send to them, which is quite substantial,” Robinhood’s chief financial officer, Jason Warnick, said on a call with analysts this month.

Kalshi declined to comment on the MIAX deal.

Kalshi was one of the first companies to get approval from the Commodity Futures Trading Commission to open an exchange for listing financial contracts tied to the outcome of events. The business has exploded this year since Kalshi used its exchange to begin offering trading on sports games.

There is still significant legal uncertainty around the business. A federal judge in Nevada ruled this week that Kalshi is subject to gaming regulators who have told the company to stop offering sports contracts in the state.

The same judge also declined on Tuesday to grant Robinhood a temporary restraining order to prevent Nevada’s gaming regulator from taking enforcement action against the brokerage. Robinhood said it would appeal the decision.

In the meantime, several companies interested in prediction markets have acquired US-regulated derivatives exchanges to begin offering contracts to compete with Kalshi.

DraftKings, the sports gambling company, purchased its own exchange and FanDuel, a unit of Flutter Entertainment Plc, has a partnership with the CME Group Inc. to create a new platform for wagering on sports and other events. Polymarket, which has offered prediction markets overseas, said on Tuesday that it received a new approval to enter the US through QCX, a regulated exchange it recently acquired.

LedgerX, which began as a platform for crypto-related derivatives, was one of the few solvent pieces of FTX when it went bankrupt. It was an important part of Sam Bankman-Fried’s push to gain power and influence in Washington. After FTX collapsed in 2022, MIAX bought the platform for $50 million as a way to expand its presence in the crypto industry.

MIAX said on Tuesday that it is keeping a 10% stake in the new business to gain exposure to prediction markets.

Source: https://www.bloomberg.com/news/articles/2025-11-26/miax-sells-ledgerx-exchange-once-owned-by-ftx-to-susquehanna-and-robinhood

The intimate meal, 60 floors above New York’s financial district, brought together a pillar of the Wall Street establishment and a young crypto upstart.

The host, billionaire septuagenarian Jeffrey Sprecher, CEO of Intercontinental Exchange Inc., the owner of the New York Stock Exchange, arrived in a suit. His guest, 27-year-old Polymarket founder Shayne Coplan, walked in wearing a T-shirt, carrying a disposable water bottle and a paper bag from a bakery.

Over dinner at Manhatta, a high-end Danny Meyer restaurant, Sprecher admitted he’d never used Coplan’s crypto-powered prediction market — it was still closed to US customers at the time. But Coplan’s pitch stuck: a new kind of exchange that makes it possible to bet on politics, sports, culture and just about anything else.

“In 20 minutes, I realized they were onto something,” Sprecher said in an interview. “What they had designed was very profound.”

The investment — of as much as $2 billion — that ICE committed to after that meal was one in a dizzying frenzy of deals that has been announced over the past two months, turning prediction markets from fringe experiment into one of the hottest trends in both Silicon Valley and Wall Street.

Participants are betting that “event contracts” — financial instruments that allow wagers on outcomes in politics, sports and more — can sidestep decades-old rules separating gambling from finance. Proponents promote them as a new way to forecast the future and potentially reshape markets themselves.

The opportunity — and the risk — took center stage this week in Chicago, where Sprecher and other executives gathered for a major trading and derivatives conference. Tarek Mansour, the CEO of Polymarket’s main rival, Kalshi Inc., made an appearance in which he teased several upcoming deals and boasted that prediction markets would become a “trillion-dollar” industry competing with the biggest asset classes.

The scramble to secure investments and strike alliances includes some of the world’s biggest exchanges, gambling giants, trading platforms, VC firms, crypto outfits, pro sports leagues — even the Trump family’s media company. All are trying to stake a claim in a highly contested legal gray zone.

In one case, Polymarket and Kalshi entered into a bidding war to win a partnership with the National Hockey League when it was considering becoming the first professional sports league to officially cooperate with prediction markets, according to people familiar with the negotiations. Eventually, both exchanges paid up to secure the deal.

The NHL declined to comment on the details of the talks. Representatives for Polymarket and Kalshi declined to comment for this story.

Regulatory opening

The recent agreements have helped Kalshi field offers to boost its valuation to more than $10 billion, from $2 billion in June, Bloomberg has reported. Polymarket has followed a similar parabolic ascent and it is now looking to raise additional funds at a valuation over $12 billion — more than 10 times what it was worth just months ago.

Even before the Polymarket investment was announced, ICE and Kalshi had held informal talks, but they never resulted in a deal, people familiar with the matter said. A representative for ICE declined to comment.

Both Kalshi and Polymarket are racing to gain legitimacy and scale, moving quickly into a regulatory opening created by the Trump administration, a sharp shift after years of legal crackdowns on prediction markets. But the backlash is building. Critics warn that embedding gambling into ever more corners of American life could have broad unintended consequences.

“This is a mess for so many reasons,” said Melinda Roth, a visiting associate professor of law at Washington & Lee University, who has written about the legal landscape surrounding event contracts. “We have people taking money they often don’t have and not investing in the stock market or retirement savings.”

WATCH: Trading activity is booming as a new wave of apps strike new partnerships, blending brokerage, betting and social media. George Pyne, CEO of Bruin Capital, former executive at IMG Sports shared his thought on this topic on “Bloomberg Market.”

State gaming agencies and Native American tribes are in their own race to make legal filings arguing that the nascent industry is steamrolling rules meant to protect bettors and gaming integrity.

Privately, though, two state regulators who requested anonymity to speak candidly about ongoing legal struggles, expressed concern about the wealth and power that are increasingly backing prediction markets. One wondered whether the phenomenon of wagering on sports using prediction markets could become too pervasive to rein in. In industry circles too, there is a sense that the fast action by the industry may overpower the legal doubts.

“If there’s enough institutional support and political support, everyone has just sort of spoken about the way they want the world to be,” according to Chris Grove, co-founder of Acies Investments, which backs gaming companies. “It’s what the relevant economic actors and the relevant political figures say.”

Sports betting

The actual trading on prediction markets today is still a tiny fraction of the existing business at traditional exchanges and gambling companies, but momentum is building, and many of the established players are jumping in.

Terry Duffy, the CEO of CME Group Inc., said that he went to the New York offices of the gambling company Flutter Entertainment Plc early this year to personally pitch the company’s CEO on a partnership, which they announced over the summer.

“I had been watching the retail revolution for years and was particularly interested in its evolution into sports,” Duffy said. “The intersection of sports and trading is powerful.”

The two companies are working on a consumer app, FanDuel Predicts, that is set to be released by the end of the year.

The CEO of DraftKings, Jason Robins, questioned whether event contracts could compete with traditional sports gambling at a recent industry conference. But his company also hedged its bet by purchasing a small regulated financial exchange, Railbird, that is set to allow DraftKings to offer event contracts itself.

Jay Snowden, CEO of the casino operator Penn Entertainment Inc., said on a Nov. 6 earnings call that prediction markets are a “major threat to the industry.”

“We’ve got to play some offense here,” he said.

Trump’s Embrace

When Kalshi initially began offering contracts tied to sports games early in the year, just months after it won a court battle to open trading on election results, it was not clear if regulators would allow them to move ahead.

A number of gaming regulators said the activity violated state laws governing sports gambling. Kalshi countered that its products were financial instruments, regulated by the Commodity Futures Trading Commission — not subject to state oversight. It has said that unlike a sportsbook, which sits on the other side of every bet, it offers an exchange where traders with different views can meet.

Kalshi Co-founder Tarek Mansour during an event at Securities and Exchange Commission headquarters on Sept. 29.Photographer: Kent Nishimura/Bloomberg

The CFTC hasn’t intervened. Meanwhile, the Trump family has increasingly aligned itself with the industry. Donald Trump Jr. became an advisor to both Kalshi and Polymarket. And Trump Media & Technology Group took part in a blitz of negotiations this fall with one of Kalshi’s competitors, Crypto.com, ultimately announcing its own marketplace, Truth Predict.

Devin Nunes, who has served as an adviser to President Donald Trump and is the CEO of Trump Media, was a key part of the agreement, which came together in a matter of weeks, according to people familiar with the discussions who asked not to be named because the talks were private.

Polymarket started from behind. It had been closed to US customers since a 2022 settlement with the CFTC. But in July, the CFTC and Justice Department told Polymarket they were ending their investigations of the company. In order to open in the US and offer CFTC-regulated contracts, Polymarket paid $112 million for a little-known derivatives exchange, QCX, which was in the process of gaining regulatory approval.

Marketing Deals

Many of the recent deals are partnerships that will get the big prediction markets exchanges in front of a broader audience.

Kalshi and Polymarket both reached agreements to offer their contracts through PrizePicks, a fantasy sports app. And Polymarket is collaborating with the mixed martial arts company Ultimate Fighting Championship, to display a scoreboard with fan predictions during broadcasts. At the industry conference this week, Mansour said he expects to announce more sports deals soon, as well as “very large news network partnerships,” though he declined to provide details.

Ultimate Fighting Championship President Dana White, left, and Coplan on the floor of the New York Stock Exchange on Nov. 13.Photographer: Michael Nagle/Bloomberg

It is still possible that the surge will hit a legal wall. A federal judge in Nevada recently expressed skepticism about the legality of Kalshi’s sports contracts and academics have flagged examples of “artificial trading” on Polymarket.

When Cboe Global Markets Inc. announced its own prediction markets product, it said it would steer clear of sports.

“We can jump on any trend or fad, and I suppose we could make a lot of money, but that’s not really what we’re interested in doing,” Cboe CEO Craig Donohue said in an interview.

The sports leagues have approached all this with caution, especially after the Department of Justice announced the latest sports gambling indictments. But while the NHL became the first major US sports league to publicly announce a deal with both Kalshi and Polymarket, other leagues have held conversations with the exchanges to determine how they can cooperate, according to people familiar with the matter.

This month, to mark the UFC tie-up, Coplan joined Sprecher on the floor of the New York Stock Exchange to ring the opening bell — the crypto founder in a crewneck, the exchange chief in a suit.

Source: https://www.bloomberg.com/news/articles/2025-11-20/kalshi-and-polymarket-battle-gambling-companies-in-prediction-market-frenzy

Prediction markets just got a fresh sell-side stamp of legitimacy. In a new report, Bernstein calls them a viable asset class — arguing that what once looked like novelty bets are now being built into the foundations of mainstream finance, backed by real capital, real users and regulatory approval.

The report pushes back on skepticism that prediction markets are too niche to scale. In the US, Bernstein argues, the landscape looks different: regulation is loosening, and platforms are moving closer to the mainstream through major partnerships and retail integrations.

Robinhood Markets Inc., for instance, clocked around $2.3 billion in prediction-markets volume for the third quarter and $2.5 billion in in October alone, roughly equivalent to $300 million in annual revenue run rate for the online brokerage, according to the analysts. Meanwhile, Coinbase Global Inc. has announced plans to launch prediction markets as part of its “Everything Exchange” vision, encompassing crypto, tokenized equities, stablecoins and prediction markets. Ahead, the Bernstein analysts expect the largest cryptocurrency exchange in the US to announce prediction markets as a key product by the end of the year.

Bernstein also highlights Kalshi and Polymarket as central players in the shift, each helping move prediction markets from the margins into more regulated and accessible territory.

“By letting markets decide probabilities for key events, more mainstream investors can factor these information signals in their portfolios,” wrote Bernstein analysts including Gautam Chhugani. “Increasing political polarity in media and the growing AI slop in content has further blurred signal from noise.”

The analysts see prediction markets emerging as a potential growth driver for Robinhood and Coinbase, citing their large active-trader bases and deep platform liquidity. Bernstein rates both stocks outperform with price targets of $160 for Robinhood and $510 for Coinbase — implying upside of roughly 24% and 70%, respectively, from Thursday’s prices.

Other firms are also building out their prediction-market offerings. Interactive Brokers Group Inc. launched its own prediction market, ForecastEx, in November 2024 thanks to the “enormous” growth potential of the space. Even Donald Trump’s social-media company is pushing into the area, with plans to launch Truth Predict “in the near future.”

Traders are already betting on market events including inflation prints and Federal Reserve rate cuts, using simple contracts that let them trade on clear yes-or-no outcomes. But it’s not just access that’s shifting — Bernstein argues the market forces are, too. These aren’t fringe bets anymore; they’re fast becoming financial infrastructure, tradable signals that could sit alongside options or ETFs as ways to express macro views.

To be sure, volumes remain modest and the vast majority of bets tend to be sports-related. The industry is nascent and some of its key players have histories with legal and regulatory issues.

But while liquidity remains thin and political contracts are still a regulatory minefield, the core infrastructure is now in place, according to Bernstein, as the total addressable market beyond state-regulated betting platforms continues to expand. At the same time, the Trump administration’s digital-asset push is helping crypto markets supply deep global liquidity to the platforms.

Source: https://www.bloomberg.com/news/articles/2025-11-06/bernstein-sees-prediction-markets-entering-mainstream-finance

Gambling’s reach is extending deeper into the investment ecosystem as Google strikes a deal to pipe prediction market data from Kalshi Inc. and Polymarket into its finance platform.

In the partnership announced Thursday, Google Finance said it will offer up the changing odds from the prediction market exchanges when users ask for information about future events. Financial terms of the deal with the Alphabet Inc. unit weren’t disclosed.

Kalshi and Polymarket are getting the valuable imprimatur of Google as they seek to legitimize a product that has been derided, in some circles, as nothing more than gambling.

The exchanges have experienced record volumes, due in large part to the popularity of their sports betting products, which offer a federally regulated way to wager on the outcome of sports events of all sorts, despite significant legal pushback from state gaming regulators.

But the companies have been eager to present the trading on their exchanges as a better way to understand the probabilities around a wide array of global issues — from economic data to weather events.

Kalshi and Polymarket both hosted significant trading around the recent US elections, and the odds on the exchanges were cited by many news organizations, in part because they were updated in real time, unlike the more irregular results of polls.

Google said Thursday that the deal with allow its users to “harness the wisdom of the crowds.” As an example, it said that a user asking about future GDP growth will be offered the odds reflected on the exchanges.

Representatives for Kalshi and Polymarket declined to comment.

The integration marks another step in the merging of speculative and informational markets. Prediction data — once confined to niche crypto platforms — has increasingly been used by traders and analysts as an alternative signal for economic or political risk, even though volumes and liquidity have been patchy.

For Google, the move fits into a broader effort to enrich search results with probabilistic and real-time data, as artificial intelligence-powered tools offer new ways to forecast trends.

Source: https://www.bloomberg.com/news/articles/2025-11-06/google-to-offer-kalshi-and-polymarket-data-on-finance-searches