The Battle for Prediction Markets in 2026: Between Expansion and Regulatory Uncertainty

The competition in prediction trading spaces is reaching new heights in 2026. Major players like Coinbase, Crypto.com, and Robinhood are intensifying their presence in the sector, forcing established platforms like Kalshi and Polymarket to revise their strategies. The most significant move comes from Robinhood, which plans to develop its own prediction infrastructure, signaling a possible break with its former partner Kalshi and highlighting the lucrative potential that the segment represents.

Resilient Growth After Political Turbulence

Despite the volatility recorded after the 2024 US presidential elections, prediction markets demonstrated remarkable recovery capacity. Trading volumes and capital flows resumed an upward trajectory, attracting renewed interest from traditional financial institutions and betting platforms. This resurgence reaffirms investors’ confidence in the solidity of these prediction spaces as tools for price discovery and risk management.

The Weight of Regulatory Pressure

However, growth does not proceed without obstacles. Regulatory authorities in various states are scrutinizing these platforms closely, questioning whether they should be classified as unlicensed betting houses. Kalshi and competitors face cease-and-desist orders issued by state gaming commissions, creating a legal environment of uncertainty that threatens their operations.

The Legitimacy Question

Prediction market operators argue that their platforms trade commodities and derivative contracts, not traditional bets. This legal distinction will be crucial in defining the future of the sector. The industry’s ability to solidify this narrative before regulators will determine the pace of expansion in 2026 and beyond.

The trajectory of prediction markets in this cycle will fundamentally depend on how regulatory developments and the outcome of the upcoming midterm elections unfold in the coming months.