Thanks to several influencing factors, particularly the kickoff of the World Cup, the volume in prediction markets soared past $50 billion last month, as reported by Macquarie.
Kalshi, the foremost provider of all-or-nothing contracts, accounted for $33 billion of that total turnover, marking its market share rise to 65%, a notable increase from 57% in May. In a recent report, Macquarie analyst Chad Beynon highlighted that strategic collaborations, such as Kalshi’s arrangement with ADI Predictstreet, are driving momentum for the growth of prediction market turnover.
“When annualized, June’s volume suggests a market poised at over $500 billion yearly, emphasizing the rapid expansion of this sector and confirming sports as the premier application for prediction markets (~50%),” remarks Beynon. “Kalshi remained the undisputed leader in volume.”
The World Cup is also enhancing prediction markets in various ways. A recent YouGov study revealed that the tournament is boosting recognition for Kalshi’s brand, placing it among industry giants like Coke, Pepsi, and Visa.
Financial Implications
The rising volume in prediction markets is significant from a financial standpoint, as it generates interest (and readiness to invest) among institutional investors regarding private companies like Kalshi and Polymarket.
Furthermore, favorable updates in prediction markets have, at times, acted as catalysts for the stock performance of companies such as DraftKings (NASDAQ: DKNG) and Robinhood Markets (NASDAQ: HOOD).
“Reports suggest Kalshi is considering another funding round at a valuation near $40 billion, double its recent $22 billion Series F valuation,” adds Beynon. “Increasing institutional trading activity and skyrocketing volumes are amplifying interest. Key takeaway: Private-market investors are increasingly recognizing PM as a new category in exchange and fintech infrastructure.”
Last month, it was reported that Kalshi is exploring additional capital raises that could elevate its valuation to $40 billion. CEO and co-founder Tarek Mansour has indicated that the company is also contemplating an initial public offering (IPO), although that event is not expected to happen this year.
The essential point is, as prediction volume grows and proves resilient, generating increased interest beyond the realm of sports, professional investors may show a willingness to invest in these companies.
June Brings Continued Excitement for Prediction Markets
While Kalshi’s growth in market share and volume is impressive, it wasn’t alone in the prediction markets spotlight in June. DraftKings joined the fray by launching its DKeX exchange, allowing it to better navigate its economic prospects in this emerging industry.
“DKeX signifies a further step towards the integration of sportsbooks and PM, with DKNG increasingly regarding PM as a strategic long-term product extension rather than merely a countermeasure to Kalshi,” comments Beynon.
The Macquarie analyst also highlighted emerging rumors from late June indicating that Meta Platforms (NASDAQ: META), the parent company of Facebook, is developing its prediction market, showcasing the industry’s journey into mainstream acceptance.