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- A new SportsBoom analysis shows that prediction markets like Kalshi and Polymarket captured approximately 27% of legal U.S. sports betting volume during the World Cup, a sharp increase from 9% earlier in the year.
- While traditional sportsbooks—many of which operate alongside the leading online casinos in the US—are still seeing handle growth, bettors are increasingly drawn to prediction platforms due to their lower costs and exchange-style structures that do not limit winning accounts.
Prediction markets captured roughly 27% of legal U.S. sports betting volume during the World Cup, according to a new analysis that argues exchanges led by Kalshi and Polymarket are becoming a more serious competitive threat to sportsbooks.
That share was up from about 9% at the start of 2026, according to the SportsBoom report by Louis Hobbs. The article said Kalshi and Polymarket combined for $33.18 billion in August 2026 volume, versus $1.98 billion in August 2025, though August volume also fell 30.3% after the World Cup ended.
The mix suggests the surge was partly tied to a major event, but not entirely temporary. João Mourato of VIP-Grinders told SportsBoom that the correct answer is “Both, and the distinction matters.” He said the post-World Cup drop shows “a good part” of the spike was tournament-driven, but argued the broader shift is still real because prediction markets offer lower visible costs and exchange-style trading.
Why lower costs and exchange structure matter
Mourato said bettors have become more sensitive to pricing, especially in straight two-way markets where prediction markets can charge less than sportsbooks build into their odds.
He also pointed to a structural difference that could matter to sharp bettors: exchange-style platforms do not limit or close winning accounts the way some sportsbooks can. “The bigger draw, speaking as someone who bet professionally, is that an exchange can’t close a winning account,” Mourato said, adding that Betfair had already proved the model worked.
The SportsBoom piece also highlighted parlay-style contracts, where the economics appear less favorable than straight markets but still cheaper than traditional sportsbook parlays. It cited Gambling Insider benchmarking that put the blended loss on Kalshi combinations at 8 to 9 cents per dollar, compared with roughly 19 cents on a typical sportsbook parlay. Bloomberg, according to the article, found retail traders lost a net $294 million on Kalshi combinations in 2026 at an average implied probability of 9%.
Sportsbooks still growing, but hold tells a different story
The report stops short of saying sportsbooks are already losing outright on volume. Mourato told SportsBoom he would not read too much into a single month of handle decline cited by the American Gaming Association.
He pointed instead to June data showing sportsbook handle rose 26% year over year to $12.59 billion while revenue fell 18.3% because hold dropped from 12.5% to 8.1%. For January through May, sports betting revenue was still up 8.5% year over year.
That makes the substitution question less straightforward. Handle increased, but sportsbook margins weakened during the same period in which prediction markets reportedly took significant share.
Another point to watch is concentration. The article said Kalshi and Polymarket grew from 63% of market volume in December to 94.6% by August, while sport-related trading accounted for 69.6% of total trading volume.
What to watch next
Mourato said the more important signal is not raw volume but open interest, because volume can be inflated by market making and arbitrage while open interest reflects money actually committed.
Regulation is another key variable. SportsBoom noted ongoing uncertainty around sports-related prediction contracts, which remain the area most directly overlapping with licensed and taxed U.S. sports betting.
Source: As reported by Louis Hobbs.
