U.S. prediction markets could reach $1 trillion, Eilers & Krejcik says
Summary
Eilers & Krejcik’s December report, “U.S. Prediction Markets: How Big, How Fast, What’s Next?”, projects that U.S. prediction markets could mature into a roughly $1 trillion industry. The study breaks the potential trading volume down by category and highlights sports as the largest slice, but it also flags major legal and regulatory uncertainties that could take years to resolve.
The report notes ongoing legal friction — notably Kalshi’s clash with Nevada regulators — and predicts disputes that could persist through 2027 and possibly reach the U.S. Supreme Court. It also examines competition with sportsbooks (particularly around parlay-style products), rapid growth in designated contract markets, and open questions about whether non-sports markets can match sports volume and whether mainstream consumer adoption will follow.
Key Points
- Eilers & Krejcik forecasts a path to a $1 trillion U.S. prediction market industry when fully mature.
- Estimated breakdown: $435bn sports, $310bn financial & crypto, $160bn news, $40bn culture, $55bn other topics.
- Legal uncertainty is significant — state regulators (eg Nevada) view some contracts as sports wagering; Kalshi’s legal battle is ongoing and being appealed.
- Prediction markets are increasingly competing with sportsbooks via parlay-style and cross-topic products; parlays currently generate over half of sportsbook GGR.
- Regulatory designations are accelerating: 12 organisations became designated contract markets in 2025 (a ~500% rise vs 2024).
- Major open questions remain: can non-sports markets reach comparable volume, will broader distribution sustain consumer adoption, and how will regulatory/tax regimes shape operator strategies.
Context and relevance
The forecast — and the legal disputes around it — matter to operators, regulators, investors and incumbents in sports betting and trading. If prediction markets scale as projected, they could reshape revenue pools, product design (eg parlays and cross-topic bets), and regulatory frameworks across states. The Kalshi-Nevada case is a live test of how state gambling law intersects with federally regulated designated contract markets, so its outcome will influence market access and product offerings.
For industry watchers: this is part of a broader trend where trading and betting products converge, firms seek DCM status, and established sportsbooks and fantasy operators evaluate diversifying into event-based contracts.
Why should I read this?
Short version: if you work in betting, regulation, finance or product design, this is the kind of report that could change your market assumptions. It lays out a big-number upside (yes, $1tn is eye-catching), explains where that volume might come from, and flags the legal fights and product battles that will decide whether that upside happens. We’ve saved you the slog — this tells you the headlines and the parts worth watching closely.
