Editor's Note: In 2025, prediction markets accelerated into the mainstream: brokers, sports platforms, and crypto products entered simultaneously, proving demand is validated. The true watershed is no longer product innovation, but the ability to scale within a regulatory framework.

This article, using global regulatory comparisons, the divergence between on-chain and compliant paths, and the 2026 World Cup as a "system-level stress test," points out that prediction markets are entering an elimination stage centered on compliance, settlement, and distribution. The winners will be platforms that can operate stably under peak load and strong regulation.

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The U.S. event contract market accelerated significantly in 2025, resonating with the approach of a "generational" catalyst.

Kalshi's valuation doubled to $11 billion, and Polymarket is reportedly also seeking a higher valuation; meanwhile, mass-market platforms—including DraftKings, FanDuel, and Robinhood—are launching compliant prediction products ahead of the 2026 FIFA World Cup (to be hosted in North America). Robinhood estimates the events market has brought in approximately $300 million in annualized revenue, becoming its fastest-growing business line, showing that "opinion-based trading" is entering the financial mainstream at scale.

However, this growth is colliding head-on with regulatory reality. As platforms prepare for the participation peak driven by the World Cup, prediction markets are no longer just a product issue but increasingly a problem of "regulatory design." In reality, teams are shifting their focus from simply meeting user demand to legal qualification, jurisdictional boundaries, and the design of settlement terms. The importance of compliance capabilities and distribution partnerships is gradually becoming as crucial as liquidity; the competitive landscape is also shaped more by "who can scale operations within the permitted framework" rather than who can list the most markets.

The Intertwining Forces of Regulation

The U.S. Commodity Futures Trading Commission (CFTC) only allows a narrow category of event contracts tied to economic indicators, while judging other types as unacceptable gambling. In September 2023, the CFTC blocked Kalshi's attempt to list political futures; but a subsequent court challenge granted limited approval for presidential election-related contracts.

At the state level, regulatory attitudes are tougher towards "sports-like" markets. In December 2025, Connecticut's gaming regulator issued cease-and-desist orders to Kalshi, Robinhood, and Crypto.com, determining their sports event contracts constituted unlicensed gambling; Nevada also sought judicial action to halt similar products, forcing relevant platforms to delist in the state.

In response, established giants like FanDuel and DraftKings restrict prediction products to jurisdictions "without legal sports betting," highlighting that distribution strategy is now led by regulatory boundaries rather than user demand. The core implication is clear: scale is determined not by product innovation, but by regulatory tolerance. Contract design, settlement terms, marketing wording, and geographical rollout paths are being systematically engineered to pass legal qualification reviews; platforms that can operate within accepted regulatory frameworks will gain more lasting advantages. In this market, regulatory clarity itself forms a moat, while uncertainty directly limits growth.

Weekly Prediction Market Notional Volume

Weekly Prediction Market Transactions

Global Comparable Cases

Outside the U.S., mature betting platforms and newer licensing regimes indicate that event-based markets can achieve liquidity under gambling regulation, but their economics and product boundaries are significantly constrained. The UK's Betfair Exchange proves market depth is possible within a gambling license framework, though strict consumer protection rules limit profitability. Betting in Asian markets is mostly state-monopolized or handled by offshore platforms, reflecting strong underlying demand but also long accompanied by enforcement and fairness challenges. Latin America is moving towards formalization: Brazil opened a regulated betting market in January 2025, attempting to transform a long-standing gray area into a taxed, regulated activity.

The overall cross-regional trend is consistent: regulation is plugging loopholes. Sweepstakes and social casino models relying on "free tokens + prize mechanisms" have been restricted or banned in multiple jurisdictions, significantly raising the compliance bar for any product skirting the edges of gambling. The global direction is stricter regulation, not tolerance of gray areas.

On-Chain Platforms vs. Compliance

Decentralized prediction markets once traded faster, global access for a lack of compliance. Take crypto platform Polymarket as an example: it was fined $1.4 million by the CFTC in January 2022 for unregistered event swaps and forced to geoblock U.S. users. Polymarket subsequently pivoted: strengthening internal controls (bringing in a former CFTC advisor) and acquiring a licensed entity in 2025, allowing it to return to the U.S. in a test form in November 2025. Its trading volume surged—reportedly reaching $3.6 billion in bets on a single election issue in 2024, with monthly volume hitting $2.6 billion by end-2024; and it attracted blue-chip investors at a valuation of around $12 billion in 2025.

On-chain platforms rely on oracles for rapid market creation and settlement but face a speed vs. fairness trade-off: governance and oracle disputes can delay results, and anonymity raises concerns about manipulation or insider trading. Regulators remain vigilant: even if the code is decentralized, organizers and liquidity providers can still be enforcement targets (the Polymarket case is an example). The 2026 challenge is: to combine the innovation of 24/7 global markets and crypto instant settlement with sufficient compliance, without sacrificing openness.

User Behavior & Trading Trends

In 2025, prediction markets surged simultaneously in both sports and non-sports events. Industry estimates show total notional volume expanded more than tenfold compared to 2024, reaching about $13 billion per month by end-2025. Sports markets became the main "trading engine," with frequent events driving continuous small trades; political and macro markets were "capital magnets," with fewer but larger trades.

Structural differences are clear: on Kalshi, sports contracts contribute most cumulative volume, reflecting the repeated participation of entertainment-focused users; but open interest is more concentrated in politics and economics, meaning heavier single positions. On Polymarket, political markets similarly dominate open interest, despite lower trading frequency. Conclusion: sports maximize turnover, non-sports concentrate risk.

This forms two types of participants:

Sports users: More like "flow traders," frequent small amounts, driven by entertainment and habit;

Political/Macro users: More like "capital allocators," few but large trades, seeking information advantage, hedging, or narrative influence.

Platforms thus face a dual optimization:既要维持流量参与,又要为资本驱动型市场提供可信与公正.

This also explains risk concentration points: controversies in 2025 mainly appeared in non-sports, including opposition from U.S. college sports regulators to contracts related to student-athletes. Platforms quickly delisted related contracts, indicating governance risk rises with capital concentration and information sensitivity, not pure volume growth. Long-term growth depends on the ability to operate high-impact non-sports markets without touching regulatory or reputational red lines.

2026 World Cup: System-Level Stress Test

The FIFA World Cup, co-hosted by the United States, Canada, and Mexico, should be seen as a full-stack stress test for event trading and compliant betting infrastructure. Historical analogies show:

The 1994 U.S. World Cup primarily tested physical infrastructure and venues; the 1996 Atlanta Olympics shifted the critical path to communications, information distribution, and emergency response. IBM's "Info '96" centralized timing and results, telecoms expanded cellular networks, Motorola deployed large-scale radio systems; the Centennial Olympic Park bombing on July 27, 1996, highlighted the importance of systems shifting from throughput to integrity and resilience under pressure.

The 2026 pressure points will clearly enter the digital + financial coupling layer: the tournament expands to 48 teams, 104 matches, 16 cities, with multiple concentrated bursts of attention and trading flow over about five weeks. The global betting scale for the 2022 World Cup was widely estimated at hundreds of billions of dollars, with peak windows bringing extreme short-term liquidity and settlement loads.

The North American compliant轨道 will carry a larger proportion of activity—38 U.S. states plus Washington D.C. and Puerto Rico have legalized sports betting to varying degrees, more funds will flow through KYC, payment, and monitoring systems rather than offshore channels. App-based distribution further tightens the coupling: live streaming, real-time contracts, deposits, and withdrawals are often completed within a single mobile session.

For event contracts/prediction markets, observable operational pressure points include: liquidity concentration and volatility during match windows; settlement integrity (data delays, dispute resolution); federal/state product and jurisdictional design; scalability of KYC/AML/responsible gambling/withdrawals under peak demand.

The same regulatory and tech stack will be tested again by the 2028 Los Angeles Olympics, so the 2026 World Cup is more of a screening event: it may trigger regulatory intervention, platform consolidation, or market exits, distinguishing infrastructure built for阶段性峰值 from platforms that are sustainable, compliant, and scalable.

Payment & Settlement Innovation

Stablecoins are transitioning from speculative assets to operational infrastructure. Most crypto-native prediction markets use USD stablecoins for deposits and settlements, and regulated platforms are also testing similar channels. In December 2025, Visa launched a pilot in the U.S., allowing banks to use Circle's USDC for on-chain settlement 7x24, building on cross-border stablecoin experiments since 2023. In event-driven markets, stablecoins (where allowed) offer instant access, global coverage, and settlement advantages matching continuous trading hours.

In practice, stablecoins act more like settlement middleware: users see them as faster deposit/withdrawal tools; operators benefit from lower failure rates, improved liquidity management, near-instant settlement. Therefore, stablecoin policy has second-order effects on prediction markets: restricting stablecoin channels increases friction, slows withdrawals; regulatory clarity favors deep integration with mainstream betting and brokerage platforms.

But there is resistance. Christine Lagarde warned in 2025 about the monetary stability risks of private stablecoins and reiterated support for a digital euro; the European Central Bank also highlighted in its November 2025 Financial Stability Review that stablecoin expansion could weaken bank funding sources and interfere with policy transmission. 2026 is more likely to see gradual integration: more betting accepts stablecoin deposits, payment institutions bridge cards to crypto, while strengthening licensing, reserve audits, and disclosure, rather than full endorsement of native crypto payment rails.

Macro Liquidity Background

Evaluating the 2025 boom requires skepticism: easy money amplifies speculation. The Fed's shift to end quantitative tightening in late 2025, or a slight improvement in liquidity in 2026, affects risk appetite more than adoption direction. For prediction markets, liquidity affects participation intensity: ample funds → amplified trading; tightening → marginal speculation cools.

But the 2025 growth occurred in a high-interest-rate environment, suggesting prediction markets are not primarily driven by liquidity. A more reasonable framework is to see macro liquidity as an accelerator, not an engine. Long-term factors—mainstream distribution by brokers/betting firms, product simplification, rising cultural acceptance—better explain baseline adoption. Monetary conditions affect amplitude, not occurrence.

"Missing Element": Super App Distribution & Moats

The key悬念 is: Who controls the user interface for integrated trading/betting?

A consensus is forming: distribution is king, the real moat lies in super app-style user relationships.

This drives intense collaboration: exchanges want retail users (e.g., CME Group partnering with FanDuel/DraftKings), consumer platforms want differentiated content (e.g., Robinhood partnering with Kalshi, DraftKings acquiring a small CFTC exchange).

The model resembles comprehensive brokerage: stocks, options, crypto, event contracts listed side-by-side, users don't leave the platform.

Prediction markets are异常 sensitive to liquidity and trust: thin markets fail quickly, depth compounds. Platforms with existing users, low acquisition costs, ready KYC, and funding channels naturally outperform independent venues needing to build depth from scratch. Therefore, it's more like options trading than social networks: depth and reliability trump novelty. This is also why the "feature vs. product" debate is increasingly decided by distribution, not technology.

Robinhood's early success supports this: it launched event trading to some active traders in 2025, volume grew rapidly; ARK Invest estimated its recurring revenue reached $300 million by year-end. The moat comparison is clear: independent prediction markets (however innovative) struggle against incumbent users. For example, FanDuel has 12 million+ users, integrated CME event contracts, and quickly built liquidity and trust in 5 states; DraftKings replicated a similar path in 38 states. In contrast, Kalshi and Polymarket spent years building depth from scratch and are now more actively seeking distribution partnerships (Robinhood, Underdog Fantasy, even UFC).

Possible outcome: a few large aggregation platforms gain network effects and regulatory endorsement; small platforms either specialize (e.g., crypto-only events) or get acquired. Meanwhile, fintech and media super app convergence is approaching: PayPal, Cash App may list prediction markets alongside payments, stocks in the future; Apple, Amazon, ESPN explored sports betting collaborations in 2023–25, potentially evolving into broader event trading. The real "missing element" might be the moment a tech giant fully embeds prediction markets into a super app—combining news, betting, and investment into one, creating a moat few can match.

Until then, the user lock-in race among exchanges, betting companies, and brokers will continue. The key question for 2026 is: Will prediction markets become a feature within large financial apps, or continue to exist as independent verticals? Early evidence points to integration.

But regulators may also be wary of super apps that seamlessly switch between investment and betting. The ultimate winners will be platforms that can convince both users and regulators—their moat comes not just from technology and liquidity, but from compliance, trust, and experience.

Opinion Trade (Opinion Labs): A Macro-First On-Chain Challenger

Opinion Trade (launched by Opinion Labs) positions itself as a "macro-first" on-chain prediction trading platform, its market form closer to a dashboard for rates and commodities rather than an entertainment-event-dominated betting product. The platform launched on BNB Chain on October 24, 2025. As of November 17, 2025, cumulative notional volume exceeded $3.1 billion, with an early-stage average daily notional volume of about $132.5 million.
During the period November 11–17, weekly notional volume was about $1.5 billion, ranking among the top prediction market platforms; as of November 17, its open interest reached $60.9 million, still trailing Kalshi and Polymarket at that time.

On the infrastructure front, Opinion Labs announced a partnership with Brevis in December 2025, introducing a zero-knowledge proof verification mechanism into the settlement process, aiming to reduce the trust gap in market outcome determination. The company also disclosed completion of a $5 million seed funding round led by YZi Labs (formerly Binance Labs), with participation from other investors, providing not only financial support but also forming a tight strategic connection with the BNB ecosystem.

Additionally, the platform's explicit geoblocking of the U.S. and other restricted jurisdictions highlights a core trade-off facing on-chain prediction markets in 2025–2026: how to achieve rapid global liquidity aggregation under regulatory boundary constraints.

Consumer Prediction Markets as "ICO 2.0" Distribution Channels

Sport.Fun (formerly Football.Fun) provides a concrete case study of how consumer prediction markets are evolving into a new generation of token distribution infrastructure. This emerging "ICO 2.0" model is directly embedded into consumer applications with real revenue. Sport.Fun launched on Base in August 2025, initially focusing on match trading similar to football fantasy play, later expanding to NFL-related markets.

As of the end of 2025, Sport.Fun disclosed cumulative trading volume exceeding $90 million, with platform revenue over $10 million, showing clear product-market fit was validated before any public token offering.

The company completed a $2 million seed funding round led by 6th Man Ventures, with participation from Zee Prime Capital, Sfermion, and Devmons. This investor structure reflects rising interest in consumer-facing crypto applications—projects combining financial primitives with entertaining participation methods, rather than just betting on underlying infrastructure. More importantly, this funding came after user activity and monetization were proven,颠覆了 early ICO cycles' traditional sequence of "sell token first, find users later."

Sport.Fun's public token offering further confirms this shift.

The $FUN public sale took place from December 16 to 18, 2025, conducted via the Kraken Launch platform, combined with a contribution and seniority-oriented Legion distribution path. The sale attracted over 4,600 participants, with cumulative subscription amounts exceeding $10 million; average participation per wallet was about $2,200. Demand was about 330% oversubscribed relative to the $3 million soft cap.
最终募资 $4.5 million, with tokens priced at $0.06, corresponding to a fully diluted valuation (FDV) of $60 million; after exercising the greenshoe option to expand, a total of 75 million tokens were sold.

The token economic model was designed to balance liquidity and post-listing stability.

According to the安排, 50% of the tokens will be unlocked at the Token Generation Event (TGE) in January 2026, with the remainder released linearly over 6 months. This structure is significantly different from the "immediate full unlock" common in early ICO cycles, reflecting lessons learned and corrections from past volatility-driven price collapses. Functionally, this token offering resembles less a pure speculative fundraising and more a natural extension of an existing consumer market—allowing users already active on the platform to "invest" in the product they are using.

Conclusion

By the end of 2025, prediction markets had moved from marginalized experiments to a credible, mass-market category. Their growth动力 came from mainstream channel distribution, product simplification, and clearly visible user demand. The core constraint is no longer "whether adopted," but how to design within the regulatory framework: legal qualification, settlement integrity, and cross-jurisdictional compliance determine who can achieve scale.

The FIFA World Cup should not be simply understood as a growth narrative, but more as a system-level stress test under peak load—a comprehensive examination of liquidity, operational capability, and regulatory resilience. Platforms that can pass this test without triggering enforcement risks or suffering reputational damage will define the next phase of industry consolidation; those that fail will accelerate the industry's concentration towards higher standards, stronger regulation, and fewer but larger winners.