TLDR
- Prediction markets could grow into a $1 trillion industry by 2030, according to a Bernstein estimate.
- Kalshi currently leads the prediction market space, with Polymarket as its main rival.
- ProphetX was approved last month as a Designated Contract Market and Derivatives Clearing Organization.
- 365Prediction has a similar application pending with the Commodity Futures Trading Commission.
- Lawmakers and courts are still working out rules for the industry, including sports-related contracts.
Prediction markets are drawing new competitors even as the rules around them stay unsettled. Two newer companies, ProphetX and 365Prediction, are trying to carve out space in a market currently led by Kalshi and Polymarket.
Analysts at Bernstein project the prediction market industry could reach $1 trillion in trading volume by 2030. That number has attracted attention from companies both inside and outside the gambling world.
Dean Sisun, co-founder and CEO of ProphetX, compared the growth potential to the size of assets held at major brokerages. He pointed to a figure of $145 trillion in assets under management across those firms.
“If we turn prediction markets on across all those assets, how much is gonna get turned over year over year?” Sisun said. He believes even a small share of that activity could support a large company.
Two Companies, Two Different Paths to Approval
ProphetX received approval last month to operate as a Designated Contract Market and a Derivatives Clearing Organization. Those approvals allow the company to list and settle event contracts directly.
365Prediction, led by founder and CEO Laila Mintas, has a similar application still under review by the Commodity Futures Trading Commission. Mintas said building a better product matters more than being first to market.
She pointed to companies like Google and Netflix as examples of businesses that succeeded without being the first in their industry. Mintas argued the same pattern could play out in prediction markets.
ProphetX plans to focus on business-to-business partnerships rather than competing directly for individual customers. Sisun said the company expects five or six partnerships to be active by football season.
Those partnerships will start with independent software vendors. Sisun said deals with Futures Commission Merchants are also planned once CFTC approval comes through.
Sports Betting Companies Are Entering the Space
Sisun and Mintas both have backgrounds in sports betting. They said current prediction market platforms are built more for traders than for sports fans.
Mintas described most existing products as resembling order books rather than fan-friendly apps. She said 365Prediction is designed to be more social and sports-focused.
Sisun said ProphetX is updating its user interface ahead of football season. The goal is to combine a sportsbook-style experience with exchange-style pricing and features.
Larger sports betting companies are also moving into prediction markets. DraftKings, FanDuel, and Fanatics have all made moves in the space in recent months.
Mintas said companies tied to physical casinos, like Caesars and MGM, may face a choice about whether to enter prediction markets too. She said staying out of the market carries its own risks for those companies.
Legal challenges remain part of the picture. Kalshi’s sports-related contracts have been banned in Michigan and Nevada.
Roughly 25 bills addressing prediction markets have been introduced in Congress. Many people in the industry expect the issue of sports contracts to eventually reach the Supreme Court.
Despite the uncertainty, both Sisun and Mintas said they see regulation as a positive step. Mintas compared the situation to earlier periods in online brokerage, sports betting, and cryptocurrency history.
She said industries that go through periods of legal uncertainty often come out with clearer rules and more consumer trust. Sisun said he hopes regulators and courts have full information before making decisions on the industry’s future.
