Jan Fencl: Will prediction markets evolve user understanding

Prediction markets have often been explained in very simple terms. Will something happen, or not?

Will a team win, will a candidate be elected, will an event take place? That simplicity has been part of their appeal. It makes the product feel accessible, especially through sport, entertainment or public events. But the category is now moving quickly. What began for many users as a yes or no experience is expanding toward a broader trading style environment, closer to crypto, finance and more complex market mechanics. The experience may still look simple, but what sits behind it is changing.

The scale of that change became especially clear during the World Cup. Kalshi recorded nearly $9.4bn in trading volume for June, up from about $5.3bn for May, while Polymarket International rose to roughly $4.3bn from $3.5bn. World Cup-related prediction market volume reportedly passed $5.4bn by late June. These numbers matter not only because they are large, but because of what drove them. Sport is no longer a secondary use case for prediction markets. It is becoming one of the main ways a broader audience meets the category.

What this shift means for traditional operators

For gambling and betting operators, that shift matters. Prediction markets are no longer competing only for niche political or crypto native audiences. They are increasingly appearing around the sporting moments that have always driven betting engagement. Traditional sportsbooks do not need to become trading platforms, and many may never want to. But they cannot ignore a category that is attracting sports fans and competing for moments of participation that once belonged more clearly to betting. If users get used to more markets, faster products and wider choice, established betting will need to explain its own value more clearly.

At the same time, the range of markets is widening. What used to feel like a narrow event-based category now stretches across entertainment, economic indicators, commodities, crypto and financial benchmarks. This does not make prediction markets the same as sports betting, crypto trading or financial investing.

They remain distinct formats with different rules and regulatory questions. But for users, the boundaries can become harder to read. A market that looks straightforward may still be shaped by pricing, liquidity, fees, volatility and settlement.

Perpetual futures are the clearest current proof point. At the end of May, the CFTC approved KalshiEX’s bitcoin perpetual contract, and Kalshi’s crypto perps reportedly passed $1bn in trading volume within the first week, including more than $100m in the first 24 hours. That activity makes the point difficult to dismiss. Perps have no fixed expiry and rely on funding payments to keep prices close to the underlying market. They can also introduce leverage, margin and liquidation risk. Once those mechanics enter the user experience, users need to understand more than the outcome itself.

Why timing is everything

The issue is not whether users are capable of understanding these products. The issue is whether the industry gives them the right context at the right moment. A fan may arrive through a match, a team partnership or a market that looks easy to read, but the journey can quickly become more technical. Liquidity, fees, volatility, leverage and exit risk are not concepts people should have to discover only after opening a position. They need to be explained before the decision feels routine.

That means responsibility has to become more practical. Many platforms already publish explainers, risk pages and educational material. That is important. The next step is making sure this information appears while it can still influence a decision. Before a user opens a higher risk position, the platform should explain in plain language what fees, leverage, funding and liquidation can mean in practice. The aim is not to slow innovation or make every experience feel heavy. It is to make sure users are not learning the most important mechanics only after acting.

This is where the next standard for the category may be set. Not only in how quickly platforms add markets, but in how clearly they help people understand them. The category will keep moving – and that is not a problem in itself. The real test is whether user understanding moves with it.