Why Prediction Market Apps Are Gaining Momentum Across Sports and Beyond
This content was produced in partnership with sportsbookreview.com.
Going Large
It is almost impossible to open a news app or service without hearing about prediction markets at the moment. This new form of gambling (not gambling) seems to have exploded out of nowhere and is garnering enormous amounts of attention. The biggest players like Polymarket and Kalshi are on a mission to disrupt the market, but they are not getting everything their own way. We are going to take a look at what they are, how they are legal, and why they are gaining momentum across sports and beyond.
To most people, making a prediction on the outcome of a real-life event and backing that prediction with a real-money transaction would be considered gambling. However, while this might appear to be the case, prediction market apps do not operate in the online gambling space when it comes to regulation. They are, in fact, legally financial derivatives and are subject to CFTC jurisdiction.
What Are Prediction Market Apps?
As the name implies, prediction markets ask users to choose the outcome of a real-world event by buying shares in a YES or NO outcome. It's not a traditional bet, and each contract is tied to a probability.
Take a $0.65 contract. That correlates to a 65 percent chance of that outcome happening. If it is correct and that outcome happens, the contract settles at $1. If it doesn't, it expires at $0, and the user loses the money.
In this way, prediction markets combine financial trading and betting, as prices move based on user demand rather than bookmaker odds.
Neither One Thing Nor The Other, More Of A Cross-Breed
Prediction market apps are a hybrid beast – a cross between a traditional sportsbook and a trading platform. With a traditional sportsbook, you place bets against the house, and the house determines the odds available. Prediction market apps trade YES/NO outcomes for real-life events, and people buy and sell these contracts in the hope of correctly predicting the outcome. Because they are trades, rather than bets, they can be bought and sold at any time before the result is decided. People can also bet to lose. As long as the question of being traded can be answered YES or NO, and as long as there is a buyer and a seller, a trade can take place.
Players are not betting against the house; they are trading with other users. Contracts are directly matched. These trades are not restricted to sports, and you can find political, financial, and entertainment trades, as well as high-profile sporting events. The apps do not make money by calculating house edge but charge fees for transactions. For now, niche sports are not covered, but that could all change rapidly. Everything in this space is evolving rapidly, so it is hard to predict what will happen next.
How Prediction Market Apps Work
Although they may seem complex at first, prediction market apps follow a simple process:
- Select an event, such as a sports result or political outcome.
- Choose a YES or NO position.
- Buy a contract at the current market price.
- Monitor price movements as other users trade.
- Sell early or hold until the event resolves.
This flexibility allows users to react to changing conditions, unlike traditional bets that are locked in once placed.
The Role of Odds and Market Pricing
What is clear, however, is that prices can fluctuate significantly and are often shaped by analysis from external sources that track betting odds and market volume. In some cases, prediction market apps may offer better value than traditional sportsbooks, though the reverse can also be true depending on the event and timing. That uncertainty is why expert review platforms such as these monitor prediction markets in much the same way they evaluate conventional betting sites, helping users compare options and identify value.
At the moment, Kalshi remains the most prominent name in the space, which helps explain why prediction market platforms are generating so much attention. Still, the market now includes a growing number of alternatives, making expert analysis and comparisons increasingly useful when deciding which platform best fits a user’s needs.
Prediction market apps are federally regulated. However, gambling is regulated at the state level, and many state officials are unhappy with the prediction apps gaining a foothold in their markets. On the one hand, you have conservative states like Utah, unhappy that prediction apps offer a legally accessible 'quasi-betting' system for use in the state. On the other hand, you have states with financially lucrative state-sanctioned legal betting markets that are concerned they will lose valuable revenue to the 'new kids on the block'.
Tug-of-war
It is all getting quite heated. CFTC Chair Michael Zelig has pushed back against Arizona's attempts to apply state criminal and gambling laws against CFTC-regulated prediction markets. In a press statement, he said:
Arizona's decision to weaponize preempted state criminal law against companies that comply with a comprehensive federal regime sets a dangerous precedent. The CFTC is committed to vigorously defending its exclusive authority over prediction markets. We are asking the court to send a clear message that intimidation is not an acceptable tactic to circumvent federal law.
Truth be told, there is a huge amount of money in the market. States like New Jersey and Nevada are heavily dependent on income derived from legal gambling. While casino gambling is probably less threatened by prediction markets, sportsbooks and predicting outcomes of sporting events are pretty similar markets. While experts can tell the difference, for many punters, a bet and a prediction are one and the same thing. Players considering predicting the outcome of a sports event might be hard-pressed to tell the difference.
National Coverage
However, there are some quite considerable differences between the two. One of the main reasons prediction apps are gaining momentum is that they are legally available in populous states like California and Texas, where sports betting for real money is not currently allowed. Prediction market apps offer them an opportunity that they could not have had before. While these apps do not have the same depth of sports events as traditional sports books (and are largely devoid of niche sports), they have a wide range of opportunities, including entertainment, economics, politics, and, controversially, wars, ceasefires, and other news events.
Why Prediction Market Apps Are Gaining Momentum
Let's explore the factors behind prediction markets' rapid growth across sports and other sectors:
Accessibility
Prediction markets are presently available in states that have banned traditional sports betting, so they give millions of users a real-money option for predicting outcomes.
Market-driven pricing
Prediction markets are driven by user activity, unlike sportsbooks. This can foster opportunities for better value.
Flexibility
In prediction markets, users can exit positions at any time, where as they need to wait for a final result in traditional sports betting.
Broader markets
Prediction apps are not limited to sports and include politics, finance, and global events.
Technology and crypto integration
Blockchain and digital payment systems allow faster transactions and global participation, increasing liquidity and efficiency.
Sportsbooks Fight Back
State regulators are not the only ones challenging big-name prediction market apps. FanDuel, DraftKings, and other sportsbook operators have spent millions building the sports betting markets that they now dominate. Many international betting companies have left the U.S. market, so now major U.S. sportsbooks are taking on the likes of Kalshi, Underdog, Polymarket, and Crypto.com.
Rather than pursuing a legal battle, they have launched their own prediction market apps but are not offering sports prediction in states where they operate licensed sportsbooks. They are the underdogs in the prediction market space, but they are adept at bringing new players on board. It would not be wise to rule them out.
Prediction market apps tend to be much lighter-weight than traditional sportsbook and casino apps. They don't focus much on entertainment, adopting a more serious "trader" atmosphere, so they likely will appeal to a very different market with some crossover. Prediction market apps do not offer chat features or live sports streams, but they are entertaining in a different way.
Pros and Cons of Prediction Market Apps
Prediction market apps offer new and interesting alternatives to traditional betting, but they have some key downsides for some users.
Pros:
- Widely accessible across the US
- Market-driven pricing with potential value opportunities
- Ability to trade positions in real time
- Coverage beyond sports, such as politics and international news events
Cons:
- Limited sports markets compared to sportsbooks
- Less entertainment-focused (no streaming or chats)
- Sometimes confusing for new users
- Ongoing regulatory uncertainty in some states
Conclusion
Prediction market apps are quickly shaping how users consider sports and news events, attracting a whole population based on their key differences.
Sportsbook operators set the fixed odds, while prediction markets have dynamic pricing determined by supply and demand.In sportsbooks, users bet against the house and expect a strong entertainment element like live betting. In prediction markets, users trade against each other and focus more on strategy.
Prediction markets are growing quickly, largely because of their novelty and ability to operate in states that have banned online gambling. However, competition from established sportsbooks and ongoing regulatory challenges mean the space is still evolving.
Whether prediction markets ultimately become a dominant force will depend on how well they balance usability, regulation, and long-term trust.
If you or anyone you know has a gambling problem, call 1-800-GAMBLER.
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