The first quarter of 2026 cemented prediction markets as one of the fastest-growing segments in financial services and legal wagering. Total industry volume — combining regulated US exchanges, state-licensed DFS operators, and offshore crypto platforms — grew approximately 200% year-over-year. What was a niche corner of fintech two years ago is now a multi-billion-dollar industry with household-name brands competing for market share. Here is a comprehensive look at where the industry stands as Q1 closes.
Industry Growth by the Numbers
Regulated US prediction market volume exceeded $28 billion in Q1 2026, compared to roughly $9.5 billion in Q1 2025. The growth is not solely attributable to one-off events like the 2024 presidential election. Sports markets, which have no seasonal peak tied to a single event, now account for nearly half of all volume. Economics markets — Fed rate decisions, inflation data, jobs reports — have grown steadily as traders discover the ability to take positions on macroeconomic outcomes.
Globally, the picture is even more striking. Polymarket processed an estimated $7.2 billion in Q1 volume on its crypto-native platform, up from $3.8 billion a year ago. When you add smaller global platforms like Futuur, decentralized protocols like Augur and Azuro, and institutional-facing products like CME Event Contracts and Interactive Brokers ForecastTrader, the total global prediction market volume for Q1 likely exceeded $40 billion.
The growth is being driven by three reinforcing factors: regulatory clarity, platform distribution, and product maturity. Each deserves a closer look.
Major Platform Developments
Kalshi remains the undisputed leader in the US regulated market, holding roughly 66% market share and processing an estimated $18 billion in Q1 volume. Its CFTC-designated contract market license and central limit order book give it structural advantages that newer entrants have not yet matched. Kalshi's partnership with Robinhood continues to be a force multiplier — Robinhood's 24+ million brokerage accounts provide distribution that no standalone exchange can replicate.
Robinhood Sports crossed 5 billion cumulative contracts traded during Q1, making it the single largest source of retail prediction market participation by user count. While Robinhood's contracts settle through Kalshi's infrastructure, the Robinhood interface and user experience are distinct. The seamless integration with stock and crypto portfolios has lowered the barrier to entry for millions of users who would never have sought out a standalone prediction market exchange.
The DFS operator wave — discussed in more detail below — has been the defining story of Q1. FanDuel Predicts, DraftKings Predictions, and Fanatics Markets all made meaningful progress in expanding their prediction market offerings and state-level availability.
On the crypto side, Polymarket continued to dominate global markets that US platforms cannot or choose not to list. Its coverage of international politics, global macro events, and crypto-native markets gives it a unique niche. The platform's UX improvements in early 2026 — including a redesigned portfolio view and push notifications for market movements — have helped retain users who originally arrived during the 2024 election surge.
Manifold Markets and Metaculus continued to serve the play-money and forecasting community, respectively. Both platforms remain important as research tools and training grounds, even as real-money platforms capture the volume headlines.
Regulatory Landscape Changes
The regulatory environment for prediction markets improved meaningfully in Q1 2026. At the federal level, the CFTC finalized rules clarifying the distinction between event contracts and traditional derivatives, providing a clearer path for platforms seeking DCM licenses. The rules explicitly addressed sports event contracts, removing ambiguity that had led to legal challenges in 2024 and 2025.
At the state level, progress has been incremental but steady. DraftKings expanded to 28 states by leveraging its existing DFS licensing infrastructure, while FanDuel Predicts is now live in 31 states. Kalshi's own state-by-state rollout continues, with the platform now accessible in 42 or more states. The patchwork of state regulations remains the industry's biggest operational challenge, but the trend line is clearly toward broader availability.
For a complete guide to where prediction markets are legal and how regulations differ by state, see our legality guide.
One notable development: several states that had previously blocked prediction markets began formal rulemaking processes during Q1 to create licensing frameworks. This signals that even reluctant regulators are recognizing the industry's growth and moving toward regulation rather than prohibition.
The DFS Operator Wave
The entry of daily fantasy sports operators into prediction markets has been the most transformative trend of the past year, and Q1 2026 showed it accelerating.
FanDuel Predicts leveraged its existing sportsbook and DFS user base to build a prediction market product with the best mobile experience in the industry. Its focus on sports markets plays to its core audience, and the ability to toggle between sports betting, DFS, and prediction markets within a single app creates powerful cross-selling opportunities. FanDuel's state licensing advantage — built over a decade of DFS operations — gives it broader geographic reach than any pure-play prediction market platform.
DraftKings Predictions has taken a similar approach, integrating event contracts into its existing DFS and sportsbook app. DraftKings reached 28 states in Q1 and has publicly stated a goal of 32+ by mid-2026. The competition between FanDuel and DraftKings for prediction market users mirrors their rivalry in DFS and sports betting, and it is producing rapid product improvements that benefit traders.
Fanatics Markets is the newest entrant, leveraging the Fanatics sports ecosystem and its growing sportsbook footprint to offer prediction markets. While its volume is still a fraction of the leaders, Fanatics brings a massive customer database of sports fans and a brand that resonates with a younger demographic.
For a direct comparison of these DFS-operator platforms, see FanDuel vs DraftKings Predictions and FanDuel Predicts vs Robinhood.
The net effect of the DFS wave is that prediction markets are being distributed through apps that tens of millions of Americans already have installed on their phones. This is a structural shift that will drive sustained growth regardless of any single news cycle or election.
What to Watch in Q2 2026
Several themes will define the second quarter:
Midterm election markets heat up. Primary season for the 2026 midterms begins in earnest during Q2. Political markets have historically been the highest-volume category during election years, and platforms will be listing new state and district-level markets throughout the quarter.
NBA and NHL playoffs. Playoff sports markets generate significantly higher volume than regular season markets. The combination of higher stakes, more media attention, and concentrated schedules makes Q2 a peak period for sports prediction market volume.
Fed rate decisions. The May and June FOMC meetings will be the most closely watched economic events of the quarter. Rate decision markets on Kalshi have become the benchmark for monetary policy expectations, often moving ahead of traditional fed funds futures.
Platform competition intensifies. With FanDuel, DraftKings, Fanatics, Robinhood, and Kalshi all fighting for market share, expect aggressive user acquisition campaigns, fee reductions, and new market launches. The competitive intensity is good for traders — more platforms and more liquidity mean tighter spreads and better execution.
International expansion. Several platforms have signaled interest in launching or expanding outside the United States. The UK, EU, and parts of Asia-Pacific represent large addressable markets where prediction markets have limited but growing presence.
The prediction market industry enters Q2 2026 with more volume, more platforms, more regulatory clarity, and more mainstream awareness than at any point in its history. Whether you are a first-time trader exploring how prediction markets work or an experienced participant refining your strategies, the opportunities are expanding every quarter. Visit the live odds page to see current pricing across all major platforms.