While numerous verticals have found ways to expand in the first quarter of 2026, none have captured more attention than the rapid growth of prediction markets in the past 12 months.
Outside of figures generated for events such as Super Bowl LX and the amount of operators that have joined the space, the next evolution of prediction markets could stem from the integration of established gaming verticals, particularly online gambling.
A potential introductory mark of such advancement may have been introduced by DraftKings in early March, streamlining debates as to how prediction markets and iGaming will intersect in the near future.
DraftKings unveils new “Super App,” paves the way for iGaming event contract trading
On March 2, DraftKings Sports & Casino was launched to consolidate sportsbook, casino, predictions and lottery products into a single platform, as phase one of the rollout will coincide with the NCAA March Madness college basketball tournaments. The operator stated functionality of its new “Super App” will be tailored to individual state regulations, which could possibly open the door to event contract trading for iGaming.
Arguably, Allwyn-owned PrizePicks already does this...
Despite only eight states in the US having authorized online gambling at the time of writing, the next progression for prediction market operators could be offering bets on “which color will the roulette ball land on,” or “will x player win the hand at play?” Entities such as DraftKings and FanDuel may be best positioned to combine the two verticals in the near future, but legal matters typing up fellow operators could issue a level of resistance.
The likes of Kalshi and Polymarket continue to be wrapped up in legal cases regarding the trading of sporting event contracts, leading one to believe the integration of iGaming – which is far more scarce in legality than sports betting – is better left for the years ahead. Speaking on Kalshi and Polymarket, the question as to how each would introduce an iGaming offering to its current markets is also of intrigue to many in gaming.
Would both, as well as operators such as Coinbase, Crypto.com etc, find ways to develop independent iGaming markets, or perhaps partner with online casino operators for simplified integrations and market access. Creating independent markets may be the best course of action for operators in terms of building one’s consumer base, but without an iGaming platform to work in tandem, it’s difficult to picture as to how such markets would be created in the first place.
Also adding a roadblock to iGaming event contracts is the potential response from regulators, given many don’t appear overly thrilled with attempts at bringing sports events contract trading to markets across the US. With iGaming providing even more legal uncertainty, it's fair to assume regulators would issue a strict response to any attempts made by prediction market operators to evolve its current trading capabilities.
How have prediction markets affected DraftKings, FanDuel stock?
In the early days of prediction markets, some across gaming approached Kalshi and Polymarket as possible future acquisitions for operator goliaths such as Flutter Entertainment – the owner of FanDuel – and DraftKings. Rather than fall under either entities’ umbrella, Kalshi and Polymarket have each seen valuations soar. The Wall Street Journal just reported that Kalshi has raised $1bn in new financing, securing a $22bn valuation.
As of February 2026, Flutter and DraftKings have seen share prices fall by more than 50% over the past six months, while DraftKings also fell short of an estimated $7.3bn FY2025 adjusted EBITDA guidance after reporting a $6.5bn and $6.9bn guidance range on February 12. DraftKings Co-Founder and CEO Jason Robins attempted to explain the results were a factor of ensuring improvement during the next FY period, but analysts from JP Morgan described the lowered guidance as a “tacit admission of industry growth concerns.”
Indeed, even with a number of cases questioning the legality of prediction markets, consumer interest has failed to slow down since it first began building early last year
Given DraftKings and FanDuel have already unveiled their own prediction-markets platform, is it possible the operators find themselves in similar circumstances as its current control over the US sports betting market? Kalshi and Polymarket could easily continue dominating market share for event contract trading, leaving DraftKings, FanDuel and fellow operators such as Fanatics and Underdog Fantasy scrambling for leftovers.
Where FanDuel and DraftKings can find ways of keeping pace with Kalshi and Polymarket are through advancements like DraftKings Sports & Casino, which offer previously unforeseen ease for consumers of multiple betting products. FanDuel is yet to consolidate its verticals into a single interface, but Flutter has now been given the framework for how such products can be brought to market.
Addressing FanDuel Predicts and its anticipated growth in 2026 on March 5, CEO Peter Jackson said Flutter is “prepared to invest money” in prediction market operations, even in what CFO Rob Coldrake describes as a “shorter investment timeframe.”
Despite the optimism from Jackson, Flutter’s CFO confirmed the operator “doesn’t want to spend too much until we know we’ve got the product,” especially given the current regulatory landscape of prediction markets. With the rise of Kalshi and Polymarket, however, the time to figure out whether FanDuel Predicts is serviceable enough to compete with the prediction market race leaders might be arriving sooner than Coldrake is comfortable with.
How has the public perception of event contract trading evolved with its popularity?
I recently had the opportunity to be questioned by a group of individuals containing no prior knowledge of gaming provided a glimpse into the perception outsiders have gained on prediction markets. While many inquired about recent events surrounding the ability to wager on war and death on Kalshi and Polymarket platforms, others were still genuinely perplexed as to how either platform functions.
“Do I need to download an app? Is it like sports betting? Can I just bet on anything?”
Figuring the industry is over a year into the prediction markets craze, the inability to decipher how one would even go about betting on Kalshi, Polymarket or fellow prediction market operators may be a sign of concern. With regulators still attempting to define “event contracts” and “swaps,” though, perhaps the bewilderment is just a result of how quickly the gaming type has expanded and the lack of opportunity for consumers to follow along with new terminology.
The fact a room full of people were asking about Kalshi and Polymarket is not only an indication of the lack of knowledge surrounding prediction markets, but the interest consumers are still gaining in the trading of event contracts. At the same time as asking whether insider trading is a prevalent issue with prediction markets – the answer being yes – people were also inquiring if they could download Kalshi and Polymarket in their respective states.
Polymarket was banned in Argentina recently but, at the same time, Kalshi has entered Brazil. Kalshi is also reportedly in talks over another high-profile deal with Fox.
In the US, just look at Polymarket's huge deal with Major League Baseball. The American Gaming Association may have adopted a new strategy to tackle prediction markets in its messaging, but the mainstream popularity – and indeed legitimacy – of this sector seems to be going from one high to another.
Even with a number of cases questioning the legality of prediction markets, consumer interest has failed to slow down since it first began building early last year. Indeed, it seems as though for every new prediction-market opponent, there is twice as much growth in the sector's reach.
US lawmakers introduced legislation that would prohibit prediction market contracts tied to war, terrorism and individual deaths on March 11, escalating scrutiny of event-based trading platforms
