Kalshi and Polymarket moved more sports money in a single month this spring than every legal U.S. sportsbook combined handled monthly all of last year.
$24 billion in April. Against roughly $14 billion a month wagered at licensed books in 2025. That gap has only widened since: $44.8 billion combined in June, then north of $50 billion in July when the World Cup pushed everyone’s phone habits into overdrive.
This isn’t a novelty product anymore. Sports have become the single most traded category on both platforms, and the reason isn’t complicated once you look at the fee structure. Kalshi and Polymarket run on roughly 0.85% vig, somewhere around a fifth of what a book like DraftKings or FanDuel takes at 4.5 to 5%. Stack that on top of 24/7 markets that never close for a rules meeting and pricing that updates in real time off actual trading activity instead of a risk manager’s spreadsheet, and you’ve got the exact product a sharp bettor was always going to migrate to.
The legal fight around all of this has turned into something close to chaos.
Rhode Island Attorney General Peter Neronha sued Kalshi and Polymarket on May 21, arguing their sports “event contracts” are just unlicensed sports bets wearing a different outfit. The CFTC’s response time was almost insulting: exactly one week later, it sued Rhode Island right back, the seventh state it’s gone after over this exact jurisdiction question. CFTC Chair Michael Selig has been blunt about where the agency stands: “Prediction markets and sports betting are two separate things.”
That argument isn’t landing with the states. Forty-four attorneys general have now aligned against the CFTC’s claim of exclusive authority, Rhode Island among them. Their case is straightforward. States estimate they’re losing something like $600 million a year in gambling tax revenue to platforms nobody licensed and nobody’s taxing.
The courts can’t even agree with each other, which is the part that should worry everybody with money in this fight. A federal appeals panel sided with Kalshi back in April, ruling its contracts are swaps under federal law and blocking New Jersey from touching them. Three months later, a federal judge in New York looked at basically the same setup and let the state’s $36 billion lawsuit against Kalshi move forward anyway. Same industry, same legal theory, two different courthouses, two different answers.
DraftKings has stopped arguing and started copying. Its own prediction-market product picked up three separate lawsuits in one week at the end of July, all making the identical case Rhode Island made against Kalshi: this is sports betting wearing a costume.
Kalshi’s not exactly sweating any of it. One industry tracker summed up just how big the World Cup breakout was for both platforms:
Somebody’s going to have to lose eventually. Until then, the side door is wide open, and it’s doing more business than the front one.
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