Prediction
markets collected more than $2.7 million in fees last week, marking the highest
weekly total the sector has recorded, even as the largest US-regulated platform
faces a court-ordered shutdown in Massachusetts.
Prediction Markets
Generate Record $2.7 Million in Weekly Fees as Kalshi Faces Massachusetts Ban
Suffolk
County Superior Court Judge Christopher Barry-Smith ruled yesterday (Tuesday)
that he will issue a preliminary injunction blocking Kalshi from accepting
sports-related contracts from Massachusetts residents without a state gaming
license.
The judge
gave state Attorney General Andrea Joy Campbell’s office until Wednesday to
submit the proposed ban, with Kalshi having until Friday morning to respond
before the order takes effect.
The timing
creates an unusual backdrop for the sector’s fee milestone. Opinion, a
prediction platform operating on BNB Chain, generated over $1.5 million in fees
during the record week, accounting for 54.3% of the total.
The
platform averaged $115.6 million in seven-day trading volume, up 2.5%
week-over-week and more than 33% compared to the previous month.
Volume Concentrates Among
Three Platforms
Polymarket
posted strong numbers through its 15-minute price direction contracts, which
alone produced $787,000 in fees and represented 28.4% of total weekly fees
across all platforms.
Seven-day
trading volumes on Polymarket reached $112.4 million, climbing more than 15%
from the prior week and nearly 200% quarter-over-quarter. Open interest on the
platform hit $335.7 million, the highest among prediction protocols.
Kalshi
maintained the largest overall market share at 52.6% of seven-day volume
despite mounting
regulatory challenges across multiple states. The New York-based company averaged $307.6
million in weekly volume, with growth of 7% week-over-week and nearly 177%
quarter-over-quarter. Open interest reached $334.6 million, closely matching
Polymarket.
The
platform began offering sports event contracts nationally in January 2025, and
they quickly became a majority of Kalshi’s trading volume, according to
Barry-Smith’s ruling. The company warned in November that an injunction could
force the halting or liquidation of $650 million in contracts.
Legal Pressure Builds in
Multiple States
Barry-Smith’s
decision marks the strongest judicial rejection yet of Kalshi’s claim that its
federal registration with the Commodity Futures Trading Commission preempts
state gambling laws. The judge wrote that the company “well understood
that its business model, especially once it began offering bets on sporting
events, came into direct conflict” with state enforcement bodies.
Campbell
called the ruling “a major step toward fortifying Massachusetts’ gambling
laws and mitigating the significant public health consequences that come with
unregulated gambling”. The injunction will apply on a forward-looking
basis, requiring no unwinding of existing contracts in an effort to
“minimize disruption,” Barry-Smith said.
Tennessee
regulators issued cease-and-desist orders to Kalshi, Polymarket, and Crypto.com
earlier this month over sports betting concerns. While Kalshi faces litigation
with several other states, Massachusetts was the first to seek an injunction to
halt operations.
Smaller Platforms Show
Rapid Growth
Probable
recorded the fastest expansion among tracked platforms, with weekly volume
jumping more than 93% and quarter-over-quarter growth exceeding 2,300%, though
from a smaller base. Predict Fun averaged $14.6 million in weekly volume, while
Football.Fun held just over $5 million in open interest.
Opinion’s
open interest stood at $151.6 million, with a volume-to-open-interest ratio of
76%, pointing to active turnover rather than passive positioning. The platform
has benefited from aggressive
marketing efforts and integration within the Binance ecosystem, with weekly trading volumes
reaching $1.6 billion at certain points in January.
Kalshi’s
lower volume-to-open-interest ratio suggests a greater share of longer-dated
positions compared to competitors focused on short-term price direction bets.
The data points to a sector where liquidity, fees, and open interest are rising
together, with short-term trading formats and opinion-driven markets playing a
larger role in driving engagement and revenue.
Analysis of
Polymarket addresses showed that
70% of prediction market traders lose money, mirroring loss patterns seen in retail CFD
trading. The regulatory pressure comes as platforms compete for market share in
a space increasingly attracting Wall Street and Silicon Valley attention, with
Kalshi reportedly raising $1 billion at an $11 billion valuation in November.
This article was written by Damian Chmiel at www.financemagnates.com.
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