Prediction Markets Surge in Popularity as Users Bet on Global Events

The $30,000 Polymarket wager appeared on a brand-new account with a specific premise: Venezuelan President Nicolás Maduro would be removed from office by the end of January. Hours later, the Trump administration conducted the raid that captured Maduro, and the bet paid out $400,000. The timing ignited immediate congressional alarm and transformed a fast-growing corner of financial markets into a Washington flashpoint.

That incident crystallized what regulators had been watching for months: a prediction market industry expanding so rapidly, and touching so many consequential events, that questions about who gets to trade are no longer theoretical.

Kalshi processed $12.35 billion in trading volume in March 2026, an 18.3% increase over its prior all-time high set just the month before. Polymarket crossed $10 billion in the same month. Together, the two platforms anchored an industry that generated roughly $25.7 billion in March volume alone, an almost 13-fold increase from the $2 billion registered in March 2025. Monthly transactions surpassed 192 million in March 2026, an all-time record, as volume and user growth continued to accelerate year over year.

A Bank of America report published April 9 found that prediction markets in the United States are growing, with weekly volume up 4% and federally regulated exchange Kalshi commanding about 89% of the market. Kalshi has operated as a federally regulated exchange since 2020 and won court approval just weeks before the 2024 election to let Americans put money on political races, later expanding into sports trading. Kalshi's valuation doubled to $11 billion as mass-market platforms including DraftKings, FanDuel, and Robinhood rolled out regulated prediction products, with Robinhood estimating event markets already generate $300 million in annual revenue.

The industry's political entanglements run deep. In January 2025, Kalshi named Donald Trump Jr. as a paid adviser, and a few months later Polymarket brought him on as an investor and adviser. Trump Jr. also joined Polymarket's board in August 2025. The venture capital firm 1789 Capital, which lists Trump Jr. as a partner, backed Polymarket only a month after the Department of Justice dropped its investigation into the platform.

Congress responded to the broader ethics crisis with a burst of legislation. On March 25, Representatives Adrian Smith of Nebraska and Nikki Budzinski of Illinois introduced the bipartisan PREDICT Act, barring senior federal officials from trading event contracts. Senator Jeff Merkley of Oregon and Representative Jamie Raskin of Maryland introduced the Stop Corrupt Bets Act the following day, which would ban contracts on elections, sports, government actions, and military moves. The BETS OFF Act, led by Representative Gabe Amo of Rhode Island and Senator Chris Murphy of Connecticut, targets wagering on war, terrorism, and events where a participant controls the outcome.

Senator Murphy identified the structural problem: "There's no getting around the fact that any prediction market where somebody knows or controls the outcome of a bet is ripe for corruption."

Both Kalshi and Polymarket moved to preempt the backlash. On March 23, both platforms publicly outlined new measures to curb insider trading, emphasizing restrictions on participants with potential access to non-public information. Kalshi explicitly endorsed congressional proposals targeting federal officials. The CFTC issued an Advance Notice of Proposed Rulemaking on March 12, with an April 30 public comment deadline.

The White House, announcing its own review in late March, cited growing concerns about potential conflicts of interest and the misuse of non-public information for personal financial gain. At least 20 lawsuits have been filed by states and gaming regulators arguing that prediction markets offer a gambling loophole and should be state-regulated. With industry volume having grown thirteenfold in a single year, enforcement frameworks built for a niche financial instrument are now being stress-tested against a market that has gone fully mainstream.