A new report from gambling research firm Eilers & Krejcik forecasts that prediction markets could grow into a $1 trillion industry, with $435 billion tied to sports outcome contracts. The December report, titled “U.S. Prediction Markets: How Big, How Fast, What’s Next?,” examines how these federally regulated markets might cut into traditional state-regulated sports wagering.
The battle between prediction markets and states like Nevada may not be resolved for months or years, as legal disputes work through appeals that could reach the U.S. Supreme Court. In early 2025, Nevada regulators found KalshiEx LLC selling prediction contracts on sports outcomes from its website, prompting the state attorney general’s office to argue that Kalshi’s yes-or-no propositions constituted sports betting.
In late March, Kalshi sued members of the Nevada Gaming Control Board and Gaming Commission. The Nevada Resort Association joined as a defendant. In November, U.S. District Judge Andrew Gordon dissolved a preliminary injunction that had allowed Kalshi to offer sports contracts, but Kalshi continues operating in the state while appealing to the Ninth Circuit Court. Rivals Robinhood and Crypto.com agreed to stop writing contracts in Nevada.
Alan Wilmot, a partner at Heitner Legal PLLC, wrote for Legal Sports Report that more outlets are coming. “Last year saw 12 organizations submit and/or otherwise become designated as a DCM (designated contract market), a 500 percent increase compared to 2024,” he said. Some sportsbooks and fantasy operators are considering developing prediction markets, though Nevada Gaming Control Board Chairman Mike Dreitzer warned licensees that such contracts are a form of wagering and require a nonrestricted gaming license with sports pool approval.
The report notes prediction markets are adding parlay-like products. Kalshi introduced same-game parlay contracts in September. Analysts expect cross-genre parlays that mix sports with other topics, something traditional sportsbooks don’t offer. The forecast breaks down the $1 trillion market as: $435 billion from sports, $310 billion from financial and crypto predictions, $160 billion from news, $40 billion from culture, and $55 billion from other topics.
Eilers & Krejcik acknowledged uncertainties, including whether non-sports markets can generate significant volume, whether prediction markets will offer truly novel products, and whether a regulated online sportsbook operator might fully flip to prediction markets due to factors like unsustainable state tax rates and a permissive Commodity Futures Trading Commission under President Trump.
