Kalshi's biggest competitor is not Polymarket

Author: flowie, ChainCatcher

The 2026 FIFA World Cup is becoming one of the largest traffic events in the history of prediction markets. Bernstein refers to it as an important "watershed" for the industry, expecting the event to generate an additional trading volume of $5 billion to $10 billion.

However, more noteworthy than the growth in trading volume is the apparent change in the competitive logic of prediction markets.

In recent years, the focus of market discussions has been on Polymarket and Kalshi, and who will emerge as the ultimate winner in the era of prediction markets.

However, Kalshi CEO Tarek Mansour recently provided a thought-provoking answer in an interview with Front Office Sports.

In his view, Polymarket is not Kalshi's main competitor. The real threats come from CME Group, Robinhood, and DraftKings.

At the same time, Bernstein also believes that platforms like Robinhood and DraftKings, which have user entry points and distribution channels, will become significant beneficiaries of this World Cup.

This means that as traditional brokerages and exchanges collectively enter the fray, the competitive logic of prediction markets is being redefined.

Threats from Traditional Trading Giants

If prediction markets were an independent track in the past few years, a clear change in the past year is that more and more traditional financial platforms are beginning to incorporate prediction markets as part of their existing business.

Among them, the most aggressive move has been made by the online brokerage Robinhood. Robinhood not only launched the Prediction Markets Hub but also further integrated its CFTC-regulated proprietary exchange Rothera in collaboration with Kalshi, officially incorporating event contracts into its platform system. Users can trade the World Cup, Federal Reserve rates, economic data, and even political events directly within their existing accounts without needing to download a new app.

For Robinhood, prediction markets have become one of the fastest-growing business lines. In 2025, the Robinhood platform recorded over 12 billion event contracts traded, and by May 2026, this number had reached approximately 16 billion. In the first quarter of this year, the company achieved 8.8 billion event contract trades, driving "other trading revenue" to grow by 320% year-on-year, reaching $147 million.

The World Cup has further become an important catalyst for this business. In early June, Robinhood officially launched its World Cup prediction market service, utilizing its proprietary prediction market product Rothera. Following the announcement, the company's stock price rose by over 5% in a single day.

Bernstein expects that in 2026, Robinhood's prediction market revenue will reach approximately $586 million, a year-on-year increase of about 286%, with its share of trading revenue reaching double digits, likely becoming one of the largest drivers of new revenue for the company.

In addition to Robinhood, traditional exchanges and sports betting platforms have also accelerated their layout in prediction markets over the past year.

In May of this year, Interactive Brokers (IBKR) integrated event contracts from Kalshi, CME Group, and ForecastEx into a unified account system. Users can participate in prediction market trading for economic data, political events, and some sports events while trading stocks, options, and futures, achieving unified access and price comparison across different platforms.

As one of the largest derivatives exchanges in the world, CME Group has also begun to enter this market through event contracts. In 2025, CME partnered with sports betting giant FanDuel and launched the prediction market platform FanDuel Predicts by the end of the year, hoping to leverage FanDuel's large user base to promote event contracts to a broader retail market.

On the other hand, DraftKings also officially launched its independent product DraftKings Predictions at the end of 2025, entering the CFTC-regulated prediction market, attempting to extend its existing sports betting users to event contract trading and gradually covering more categories such as sports, finance, and entertainment.

Meanwhile, Webull has also integrated Kalshi's event contract services. More and more traditional brokerages, exchanges, and betting platforms are beginning to view prediction markets as part of their existing trading ecosystem rather than as an independent new track.

This means that prediction markets are gradually evolving from a standalone product into a functional module within brokerages, exchanges, and betting platforms. Users no longer need to download a dedicated prediction market app. They might just open Robinhood to buy stocks while predicting the World Cup champion; open FanDuel or DraftKings to participate in sports betting while trading an event contract; or configure assets in Interactive Brokers while placing a bet on the next Federal Reserve rate cut.

For these platforms, prediction markets are not the core business, but they can leverage existing account systems, funding systems, and user bases to expand at a very low marginal cost. This also causes the competitive boundaries of prediction markets to begin to change.

How Can Prediction Markets Step Out of the "Giant" Shadow?

As traditional trading giants start to "integrate prediction markets into their systems," the ensuing question is, what space is left for prediction markets themselves?

Currently, the evolution of the industry has not led to a singular "breakthrough," but rather has opened multiple paths.

The first path is the continuous expansion of trading categories. Initially, the core assets of prediction markets mainly revolved around elections and political events. Subsequently, sports events, economic data, interest rate decisions, and entertainment events gradually became new sources of growth. The reason Bernstein refers to this World Cup as a "watershed moment" for the industry is largely because sports events are expected to help prediction markets break free from dependence on election cycles and enter more mainstream consumer scenarios.

At the same time, prediction markets are also beginning to break trading boundaries, attempting to extend into a broader trading market. For example, both Polymarket and Kalshi have begun to explore perpetual contracts and derivatives this year, hoping to meet users' more continuous trading needs and reduce the impact of single event cycles.

However, compared to the expansion of asset categories, another change may be more noteworthy.

The second path is extending towards infrastructure and distribution layers.

In recent years, the market has viewed Kalshi and Polymarket more as direct competitors. However, starting from the second half of 2025, the development paths of the two began to show gradual differentiation. According to data from Bernstein cited by The Block, as of May 2026, Kalshi's monthly trading volume reached $17.9 billion, capturing about 57% of the market share, while Polymarket's monthly trading volume dropped to about $7.1 billion. Kalshi has achieved a lead in trading volume and share.

Behind this turnaround, in addition to compliance advantages, the expansion of differentiated channels is also an important driving factor. Traditional trading platforms represented by Robinhood, Coinbase, Webull, and Interactive Brokers have gradually introduced their event contract capabilities, making them a cross-platform "event liquidity provider," bringing them significant traffic.

However, the problem is that this previously successful path is undergoing a key loosening, as distributors begin to absorb infrastructure capabilities in reverse, not satisfied with revenue sharing but instead building their own products. Robinhood, mentioned earlier, is an example; it not only integrates Kalshi but also begins to build its own prediction market system through Rothera and other means. This means that as more and more distribution platforms can directly reach end users, the value boundaries of "infrastructure providers" are becoming less stable.

The competition between prediction market platforms is shifting from simply competing for end users to gradually extending to competing for channels, liquidity, and underlying capabilities.

This competitive situation is not unfamiliar in the internet era. For example, the competition between Zoom and Microsoft Teams, Google Meet, revolves around the video conferencing scenario.

Zoom once defined the video conferencing category with an extreme professional experience, but Microsoft and Google, through deeply embedding Teams and Meet into the Office 365 and Gmail ecosystems, compressed video calls from "independently downloaded apps" to "a tab within a collaboration suite."

The outcome of this competition is not that Teams replaces Zoom, but that entry-type platforms, leveraging distribution advantages, continue to expand their coverage and, to some extent, rewrite the growth boundaries of products. Zoom still exists, but it is forced to migrate towards higher-level capabilities such as enterprise collaboration, AI, and workflow capabilities to hedge against growth pressure after being embedded in entry points.

Prediction markets currently stand at a similar historical crossroads; whether Kalshi and Polymarket can step out of the shadows of the giants will require time to observe.