Prediction Markets Are Exploding — Here’s Why You Should Pay Attention 💸📈
Now I don’t want to promote gambling: The main reason is to expose the use case of what we are already into and how to turn it into passive income. Using the platforms and tools, instead of the risk of betting.
What does that mean?
Let’s first get into the new wave of prediction markets, similar to sports betting. The new terminology and ways of gambling.
What Are Predictions Markets?
Prediction markets operate a lot like stock markets, except instead of trading company shares, you trade contracts based on the outcome of events. These could include:
- Politics (elections, legislation, etc.)
- Economics (inflation, interest rates, cryptocurrency prices)
- Entertainment (Oscars, award shows)
- Sports (NFL, college football, and more)
The price of a contract reflects the crowd’s probability estimate of an event happening. For example, a contract priced at 70¢ implies the market thinks there’s a 70% chance the event will occur. If it happens, the contract pays $1; if not, it’s worth nothing.
Because prediction markets are treated more like financial trading than gambling, they’re legal across all U.S. states, even where sports betting is restricted (like Utah, Hawaii, and Alaska).
A Quick History
Prediction markets have been around for almost a decade, but they gained mainstream attention in 2024 when Polymarket and Kalshi predicted the U.S. election more accurately than traditional polls.
- Polymarket: Launched as a crypto-based market, it allows decentralized trading using stablecoins. It paused U.S. operations in 2022 after a $1.4M fine to the CFTC, but the Kalshi ruling in 2025 cleared the way for it to return.
- Kalshi: A U.S.-regulated platform licensed by the Commodity Futures Trading Commission (CFTC). It trades contracts in USD, including sports, politics, and more. Its legal victory in 2025 paved the way for broader adoption.
- Robinhood Prediction Markets: Launched in 2025, letting users trade event contracts inside the same app they use for stocks and crypto — no wallets or crypto knowledge required.
📊 2024 Election Accuracy
Platforms like Polymarket and Kalshi drew widespread attention when they predicted U.S. election outcomes faster and often more accurately than polls, planting them in public and financial discourse.
Legal Differences Explained
Prediction markets are legally distinct from typical sports betting in the United States because:
Federally Regulated vs. State Gaming Laws
Regulated platforms like Kalshi are overseen by the CFTC, meaning they’re treated like financial markets, not gambling exchanges. This gives them the ability to operate nationwide in all 50 states, even where traditional betting is illegal.
Unregulated or offshore platforms (like older Polymarket models) were traditionally in a gray zone and faced fines or restrictions — Polymarket paid $1.4M and adjusted its structure.
Whether a platform is CFTC‑regulated defines legal protection, rights to withdraw funds, dispute resolution, and legal status.
Difference from State Sports Betting
Traditional state‑based sports betting licenses are managed separately, typically through state gaming commissions. Prediction markets regulated by the CFTC operate under federal commodities law, which can preempt state gambling rules — though this remains hotly contested in court in places like Massachusetts and Nevada.nd musicians, and an open library where creators can publish their favorite card recipes.
prediction markets are more like trading stocks than betting, which is why they’re legal almost everywhere in the U.S., even where betting normally isn’t allowed. Being regulated federally makes them safer and easier to use than unregulated platforms.
The Recent Sports Betting Twist
Kalshi recently partnered with Robinhood to offer sports-based prediction markets for NFL and college football. FanDuel is jumping in too with its “Futures Day”, offering event-based contracts and partnering with CME Group to expand access.
- This could redefine sports betting in the U.S.:
- Platforms could trade sports contracts like financial instruments.
- High state taxes on traditional sports betting could be avoided because trading fees are taxed like stock trading.
The line between sports betting and prediction markets could blur, potentially opening the door for nationwide legal access.
Prediction markets combine finance, betting, and data-driven insights in a way that’s growing fast. With sports driving volume, legal clarity from the CFTC, and tech-friendly platforms like Robinhood making it accessible, this is an emerging financial playground for both casual traders and pros.
- Fast-growing: Could reach $1 trillion in annual trading volume.
- Legal and regulated: Fully legal nationwide thanks to Kalshi’s CFTC ruling.
- Accessible: Platforms like Robinhood, Polymarket, and Kalshi make trading easy.
Want to Try Prediction Markets?
You can get started today with Robinhood’s Prediction Markets — it’s beginner-friendly and even gives you a free reward to start learning.
👉 Join Robinhood here and earn rewards for signing up & learning about prediction markets:
Whether you’re into sports, politics, or economics, prediction markets are your chance to turn knowledge into profit. Just remember: trade responsibly, research events, and have fun!
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