Prediction markets operate like financial exchanges, with binary contracts paying $1 or $0 and real-time probability pricing that some say reflects collective forecasts more accurately than polls.

Investment and valuation milestones included Kalshi’s $1 billion Series E and Polymarket’s ICE-backed up to $2 billion investment, with ICE distributing Polymarket data to institutions.

Platform-specific moves included Limitless raising $10 million, Myriad’s 10x trading volume growth and Trust Wallet partnership, Polymarket’s exclusive deals with UFC and Yahoo Finance, and expanded media collaborations.

Non-crypto players and media embraced the trend, with Robinhood partnering with Kalshi for March Madness markets, South Park referencing prediction markets, and traditional firms like DraftKings and FanDuel entering the space.

Mainstream media adoption intensified as CNN and CNBC integrated live market data into broadcasts, with outlets increasingly using forecast data alongside traditional polling.

Concerns grew around hyper-commodification, gambling-like incentives, and risks of insider trading and manipulation, highlighted by incidents involving a Polymarket trader profiting from Google Year in Search data and a demonstration of market manipulation by the Coinbase CEO.

Industry outlook remains cautiously optimistic, viewed as the early stage of a broader ecosystem with ongoing growth potential amid regulatory and competitive challenges.

Prediction markets surged to a multibillion-dollar industry in 2025, with Polymarket and Kalshi handling combined wagers surpassing $37 billion for the year, and weekly volume exceeding $2 billion across platforms signaling mainstream adoption.

Regulatory and legal developments shaped the year, including a CFTC roundtable, Acting Chairman Pham criticizing prior policy as a 'sinkhole of legal uncertainty,' and the CFTC dropping an appeal that aided Kalshi’s ability to offer election-related contracts.

Expansion beyond crypto-native platforms continued with mainstream distribution deals and licensing, as Kalshi and Polymarket partnered with CNN, CNBC, Google, and the NHL.

EU regulatory landscape stayed fragmented and strict, with several countries banning or restricting Polymarket while others like Germany and Spain allow access; MiCA looms with a July 2026 grandfathering deadline for Crypto-Asset Service Provider licenses and potential market-abuse regime tightening.

State-level pushback on gambling regulation affected Polymarket and Kalshi, while Gemini gained CFTC approval to offer prediction markets, signaling ongoing regulatory evolution.