Odaily Planet News: Analysis points out that the prosperity of the U.S. prediction market is built on an unstable foundation, mainly benefiting from regulatory arbitrage opportunities. For example, currently, there is no more complete system in U.S. states to regulate users participating in sports betting through prediction market forms. Dune Analytics data shows that in 2025, sports-related transactions account for about 85% of Kalshi's trading volume, and Polymarket accounts for about 39%. Devin Ryan, head of financial technology research at Citizens Bank, believes the market needs to establish sound integrity rules, and the trading volume of non-sports markets needs to be increased. Currently, the market size for predicting January CPI inflation data on Kalshi is less than $1 million, and the market size for predicting core inflation is less than $30,000. Such liquidity is insufficient to attract institutional participation.
In addition, the current U.S. prediction market exhibits characteristics of a "fragile boom," with growth mainly relying on regulatory gray areas and heavy marketing investments. Once regulation tightens or user interest declines, growth may face pressure. There is also some regulatory bargaining; for example, the U.S. prediction market usually claims that it belongs to event contract trading regulated by the Commodity Futures Trading Commission (CFTC), but state-level regulators take a more cautious stance, and the relevant legal disputes may ultimately be decided by the Supreme Court. (BusinessInsider)