As Super Bowl LX approaches this Sunday, trading activity on prediction markets has surged compared to the build-up to last year's game. By Tuesday afternoon, Kalshi reported over $161.4 million in trading volume for Super Bowl event contracts, marking a significant increase from its debut in 2025. This year, the excitement surrounding the match between the New England Patriots and Seattle Seahawks is paralleled by a growing discussion about prediction markets, which are seen as a competitive alternative to traditional sportsbooks.
Last year, when the Philadelphia Eagles defeated the Kansas City Chiefs, Kalshi noted $27 million in trading on a contract that allowed users to predict the winner. This marked the first time Kalshi offered Super Bowl contracts following its expansion into NFL derivatives, and the current activity far surpasses last year’s figures.
During last month’s ICE Conference in Barcelona, various stakeholders discussed the commercial and regulatory challenges facing this emerging asset class. The NFL also announced that eight games will be held outside the United States during the 2026-27 regular season, mostly in Europe. This international expansion could facilitate the growth of prediction markets in Europe, where operators face several regulatory obstacles.
At the ICE conference, several leading US gaming executives participated in discussions, including a panel on the legal defenses that states and tribal nations have put forth against prediction markets. The American Gaming Association (AGA) highlighted its alliance with the Indian Gaming Association to combat what they consider unregulated, illegal sports betting. "The legal, commercial and tribal gaming industry will fight this battle until the end to prevent attempts to infringe on states’ rights, tribal sovereignty, and consumer protections," said Tres York, the AGA's vice president of government relations.
In recent weeks, major sportsbooks DraftKings and FanDuel have distanced themselves from the AGA by launching their own prediction market products. Advocates for prediction markets argue that sports event contracts are not governed by state regulations but fall under the federal jurisdiction of the US Commodity Futures Trading Commission.
At a separate ICE panel dubbed "Future Insight: Driving Sports Predictions Growth," exchange wagering entrepreneurs discussed the evolution of the industry. Beyond DraftKings, firms like CME Group, Robinhood, and Crypto.com have introduced prediction markets in the past year. Cboe Global Markets is reportedly considering entering this space with contracts offering option-style payouts, as per the Wall Street Journal.
The rising interest prompted WagerWire co-founder Travis Geiger to declare that the industry is experiencing the "financialisation of sports betting." He noted that leading prediction markets have successfully attracted external investment, such as Polymarket, which aims to raise capital at a valuation between $12 billion and $15 billion. Will Martin, founder of LiveDuel.com in Ireland, referred to this blending of finance and sports betting as the "gamification of finance."
Jesse May, head of strategy for Matchbook, expressed that more sportsbooks should consider adding a prediction market feature, as it could complement rather than undermine their traditional offerings. He asserted that the growth of prediction markets would enhance liquidity and ensure consistent pricing in the industry. Most sportsbooks, he noted, are insular, which can stifle trading activity due to limited participant engagement. He advocated for prediction markets as a means to democratize participation, eliminating the low bet limits imposed by regulated sportsbooks.
Several EU nations currently prohibit prediction markets. Portugal's gambling authority recently demanded Polymarket cease operations amid a trading surge related to the nation's elections. Hungary's Supervisory Authority for Regulated Activities took similar action against Polymarket due to unlicensed gambling concerns. However, prediction market operations are still legal in key EU countries, including Spain and Germany.
While different countries have varied regulations regarding gambling, AGA's York emphasized that many nations view prediction markets as violations of their laws, leading to bans. Martin suggested that regulatory agencies worldwide should adopt frameworks similar to those established by the CFTC. After the conference, CFTC Chair Michael Selig announced plans to clarify prediction market regulations, including the withdrawal of a proposed rule intended to ban sports-related event contracts.
The Super Bowl may serve as a significant test for trading volume in California, where sports betting remains illegal. In the state, Indian Gaming Association Chair Victor Rocha has vowed to challenge these markets, arguing they infringe on tribal and state sovereignty. According to the wagering-tracking app Juice Reel, California ranks high in prediction market adoption, with an analysis estimating that around 5% of the handled volume in regulated sports betting may shift to prediction markets, potentially translating to nearly $100 million from the upcoming Super Bowl.
