Author: flowie, ChainCatcher
The 2026 FIFA World Cup may be becoming the largest traffic event in the history of prediction markets. Bernstein calls it an important "watershed" for the industry, estimating the event will bring $5 billion to $10 billion in new trading volume.
However, more notable than the growth in trading volume is the apparent shift in the competitive logic of prediction markets.
Over the past few years, market discussion has primarily focused on whether Polymarket or Kalshi would be the ultimate winner of the prediction market era.
However, Kalshi CEO Tarek Mansour recently gave a thought-provoking answer in an interview with Front Office Sports.
In his view, Polymarket is not Kalshi's primary competitor. The ones to be truly wary of are CME Group, Robinhood, and DraftKings.
Meanwhile, Bernstein also believes that platforms with user gateways and distribution channels like Robinhood and DraftKings will become major beneficiaries of this World Cup.
This indicates that with traditional brokerages and exchanges collectively entering the fray, the competitive logic of prediction markets is being redefined.
The Threat from Traditional Trading Giants
If prediction markets were an independent sector in past years, a noticeable change over the past year is that more traditional financial platforms are starting to incorporate prediction markets as part of their existing business.
Among them, the most aggressive has been internet brokerage Robinhood. Robinhood not only launched its Prediction Markets Hub, but also, on the basis of cooperating with Kalshi, further integrated its own CFTC-regulated exchange, Rothera, formally incorporating event contracts into its platform ecosystem. Users can directly trade contracts on the World Cup, Fed interest rates, economic data, and even political events within their existing accounts without needing to download a new app.
For Robinhood, prediction markets have become one of its fastest-growing business lines. In 2025, the platform accumulated over 12 billion event contracts traded. By May 2026, this number reached approximately 16 billion. In Q1 this year, the company recorded 8.8 billion event contracts traded, driving "other trading revenue" up 320% year-over-year to $147 million.
The World Cup further serves as a significant catalyst for this business. In early June, Robinhood officially launched its World Cup prediction market service, using its proprietary prediction market product, Rothera. Following the announcement, its stock price rose over 5% in a single day.
Bernstein expects Robinhood's prediction market revenue to reach approximately $586 million in 2026, a year-on-year increase of about 286%, already accounting for double digits as a percentage of trading revenue, and is expected to become one of the largest drivers of the company's new revenue growth.
Beyond Robinhood, traditional exchanges and sports betting platforms have also accelerated their entry into prediction markets over the past year.
In May of this year, Interactive Brokers (IBKR) integrated event contracts from Kalshi, CME Group, and ForecastEx into its unified account system. Users can directly participate in prediction markets for economic data, political events, and some sports events while trading stocks, options, and futures, achieving unified access and price comparison across different platforms.
As one of the world's largest derivatives exchanges, CME Group has also entered this market via event contracts. In 2025, CME partnered with sports betting giant FanDuel and launched the prediction market platform FanDuel Predicts by the end of the same year, hoping to leverage the latter's massive user base to bring event contracts to a broader retail market.
On another front, DraftKings officially launched its standalone product DraftKings Predictions in late 2025, entering the CFTC-regulated prediction market, attempting to extend its existing sports betting users into event contract trading and gradually cover more categories including sports, finance, and entertainment.
Simultaneously, Webull has also integrated Kalshi's event contract services. More and more traditional brokerages, exchanges, and betting platforms are viewing prediction markets as part of their existing trading ecosystems, rather than an independent new sector.
This means prediction markets are evolving from a standalone product into a functional module within brokerage, exchange, and betting platforms. Users no longer need to download a dedicated prediction market app. They might open Robinhood to buy stocks and incidentally predict the World Cup champion; open FanDuel or DraftKings to place sports bets and incidentally trade an event contract; or speculate on the next Fed rate cut while managing their portfolio on Interactive Brokers.
For these platforms, prediction markets are not a core business, but they can leverage existing account systems, capital systems, and user bases to expand with extremely low marginal costs. This is changing the competitive boundaries of the prediction market.
How Can Prediction Markets Step Out of the Shadow of Giants?
As traditional trading giants begin to "incorporate" prediction markets into their own systems, the question that follows is: what space remains for the prediction market itself?
Currently, the industry's evolution is not heading towards a singular "breakthrough," but rather multiple paths.
The first path is the continuous expansion of tradable categories. Initially, the core assets of prediction markets primarily revolved around elections and political events. Subsequently, sports events, economic data, interest rate decisions, entertainment events, etc., gradually became new growth drivers. The reason this World Cup is called the industry's "watershed moment" by Bernstein is largely because sports events are expected to help prediction markets break free from dependency on election cycles and enter more mainstream consumer scenarios.
At the same time, prediction markets are also beginning to break trading boundaries, attempting to extend into broader trading markets. For example, both Polymarket and Kalshi began exploring products like perpetual contracts and derivatives this year, hoping to meet users' needs for more continuous trading and reduce the impact of single-event cycles.
However, compared to asset category expansion, another change may be even more noteworthy.
The second path is extending into infrastructure and distribution layers.
Over the past few years, the market primarily viewed Kalshi and Polymarket as direct competitors. But starting from the second half of 2025, their development paths began to diverge. According to Bernstein data cited by The Block, by May 2026, Kalshi's monthly trading volume reached $17.9 billion, capturing about 57% market share, while Polymarket's monthly trading volume fell to about $7.1 billion. Kalshi has already taken the lead in both volume and share.
Behind this reversal, beyond compliance advantages, the expansion of distribution channels is also a significant driving factor. Traditional trading platforms represented by Robinhood, Coinbase, Webull, and Interactive Brokers have successively integrated its event contract capabilities, gradually making it a cross-platform "event liquidity provider," bringing it massive traffic.
The problem is, a key aspect of this previously successful path is now loosening: distributors are starting to absorb infrastructure capabilities in reverse, no longer satisfied with revenue sharing, but building their own products. The aforementioned Robinhood is a case in point; it not only integrates Kalshi but also began building its own prediction market system through Rothera. This means that as more distribution platforms can directly reach end-users, the value boundary of being an "infrastructure provider" is becoming unstable.
Competition among prediction market platforms is gradually extending beyond simply competing for end-users to competing for channels, liquidity, and underlying capabilities.
This competitive dynamic is not unfamiliar from the internet era. For example, the competition between Zoom and Microsoft Teams, Google Meet around the video conferencing scenario.
Zoom once defined the video conferencing category with its excellent professional experience, but Microsoft and Google, with Teams and Meet deeply embedded in the Office 365 and Gmail ecosystems, compressed video calls from "a standalone app to download" into "a tab within a collaboration suite."
The outcome of this competition was not Teams replacing Zoom, but entry-point platforms continuously expanding their coverage based on distribution advantages, and to some extent, redrawing the product's growth boundaries. Zoom still exists, but it was forced to migrate towards higher-level capabilities like enterprise collaboration, AI, and workflow functionalities to counter the growth squeeze from being embedded within other platforms.
Prediction markets are currently at a similar historical intersection. Whether Kalshi and Polymarket can step out of the shadow of the giants remains to be seen over time.
