Kalshi and Polymarket set consecutive daily volume records over the NFL weekend, combining for $8.56 billion, according to Dune Analytics data. More than 80% of Kalshi's September volume involved sports, the activity that state regulators most want to stop.
The prediction-market industry had its biggest week yet just as federal regulators moved to change how its products are classified.
Kalshi and Polymarket set consecutive daily volume records over the weekend, together handling $8.56 billion, according to data compiled by Dune Analytics. Combined volume for the week reached a record $22.2 billion.
Sports dominate
Most of that activity is sports. More than 80% of Kalshi's trading in September involved sports contracts. Last week, parlays and other combination contracts, which bundle several outcomes into one bet, made up 65% of Kalshi's trading and 53% of Polymarket's U.S. activity.
The National Football League has put a number on its share. In a court filing on Oct. 8, it said NFL contracts accounted for $1.8 billion of $3.3 billion of volume on the Sunday of Week 1, more than half.
The regulatory front
That concentration is the core of the industry's legal problem. At least 44 states assert that sports event contracts violate state gambling laws. Contracts that bundle several game outcomes look, to state regulators, very much like the parlays offered by licensed sportsbooks.
The federal regulator is taking a different approach. The Commodity Futures Trading Commission has proposed expanding the legal definition of swaps to include prediction-market trading, a step that would place the contracts more firmly under federal derivatives law. A separate interim rule covering casino-style contracts would take effect when published in the Federal Register, with a 30-day comment period. The Federal Register is closed on Monday for the holiday, so publication can come no earlier than Tuesday.
What swap status would mean
Classifying event contracts as swaps cuts two ways for the industry. It strengthens the argument that federal law, not state gambling rules, governs the products, which is the defense Kalshi and others have used against state enforcement. It could also bring obligations that come with the swap label, the details of which will depend on the final rule.
Two readings
One reading is that the industry is winning. Volume is at records, the federal regulator is building a framework that supports preemption of state law, and sports demand shows the products have found a mass market.
The other is that success is sharpening the conflict. The more volume comes from parlay-style sports contracts, the harder it is to distinguish the business from sports betting, and state attorneys general, tribes and the courts are not bound by a federal rule proposal.
What to watch
Publication of the CFTC proposal and interim rule, Ohio's action against Kalshi due around Oct. 16, a preliminary-injunction ruling in Illinois on Oct. 29 and Kalshi's response in its Supreme Court case on Nov. 9 are the next steps.