What Are Prediction Markets? How Polymarket, Kalshi and Myriad Work

Core Insights - Prediction markets are platforms that allow users to speculate on the outcomes of future events, with prices reflecting the probability of those outcomes [5][4][18] - The market dynamics are influenced by real-time supply and demand, with share prices ranging from $0.00 to $1.00, correlating to the percentage chance of an event occurring [4][3] Market Types - Scalar markets resolve based on whether an outcome is higher or lower than a specified value, while categorical markets have multiple options, and binary markets have two possible outcomes [2] - Examples of prediction markets include Kalshi, Polymarket, Opinion, and Myriad, each with unique operational models and market focuses [7][9][10][11] Market Growth and Valuation - The prediction market sector saw a significant increase in volume from $15.8 billion in 2024 to $63.5 billion in 2025, indicating rapid growth and increasing mainstream acceptance [16][17] - Kalshi reached a valuation of $11 billion following a $1 billion funding round in November 2025, while Polymarket was valued at $9 billion after a $2 billion investment [7][9] Regulatory Environment - Prediction markets face regulatory scrutiny, with challenges arising from differing laws on gambling and securities across jurisdictions [19][20] - Polymarket has faced legal issues, including a $1.4 million fine from the CFTC, while Kalshi has encountered temporary bans in certain U.S. states [20][22] User Engagement and Demographics - A generational shift is evident, with younger consumers showing increased awareness and engagement with prediction markets, as nearly a third of Americans expect online betting to become more culturally significant [24]