Over Labor Day weekend, social media lit up with observations that President Trump had not been seen in public for a number of days. Quickly, rumors swirled about Trump’s well being—and ghoulish hashtags even claimed he had died. Sure, it was simply one other weekend within the on-line rumor mill, however this spherical of hypothesis got here with a novel twist: a flurry of bets concerning the president’s well being on so-called prediction market websites. On Kalshi, the chances of Vice President JD Vance taking workplace by the tip of the 12 months shot as much as 15%. For Kalshi clients, a wager of $15 would imply a payout of $100 if Vance took workplace.
Trump’s alleged disappearance, after all, proved a false alarm. By Tuesday, the web had moved on to different diversions—however not earlier than pundits blasted Kalshi and its prediction markets rival Polymarket for operating “assassination markets,” the place the general public may (not directly) wager on the demise of a public determine.
They’re additionally on the cusp of turning into large enterprise.
Kalshi and Polymarket have been round for seven and 5 years respectively, however their large breakout got here throughout final 12 months’s U.S. presidential election marketing campaign. Over the course of a number of months, hundreds of thousands of individuals convened on the platforms to wager greater than $3 billion on the result, leading to forecast that proved much more correct than probably the most extremely regarded polls. For the startups’ founders, this proved their thesis: that the platforms’ mix of crowdsourced knowledge and monetary self-interest provides an unprecedented window into future occasions.
Proper now on Kalshi and Polymarket, these future occasions embody profound geopolitical and financial questions, like whether or not China will invade Taiwan by the tip of 2025 (6% as of mid-September) or what number of price cuts the Fed will implement by finish of 12 months (14% for 2 cuts). There are additionally loads of extra frivolous wagers, like whether or not Taylor Swift will get pregnant in 2025 (15%).
To their backers, these wagers (“events contracts” in prediction markets parlance) symbolize a promising new business—and a doubtlessly highly effective instrument that traders may use to hedge their portfolios, or that companies may use to foretell client demand. Sequoia enterprise capitalist Alfred Lin describes the markets to Fortune as “basically truth machines.”
Seizing on a good surroundings for fintech experimentation, Lin and others have poured lots of of hundreds of thousands of {dollars} into Kalshi and Polymarket (every of which now get pleasure from $1-billion-plus “unicorn” valuations) and a handful of smaller platforms; public corporations like Robinhood are additionally jostling for a chunk of the motion. Proper now, month-to-month wagers on Polymarket and Kalshi are totaling properly over $1 billion, whereas analytics agency Similarweb says the websites attracted over 35 million guests this summer season.
Nonetheless, the rising sector is fraught with dangers. Whereas their supporters envision prediction markets as nimble instruments for peering into the longer term, many others—together with, it appears, the general public truly utilizing them—see them as simply one other technique to gamble. If the markets come to be seen primarily as simply one other on line casino, they’re more likely to lose the ethical and mental excessive floor their boosters have touted. That’s to not point out the problem of the brutal competitors and authorized jeopardy that may go together with working within the tightly regulated gaming business.
There’s additionally the general public unease round platforms that allow wagers on warfare or the well being of politicians in a time of basic social upheaval—an unease intensified by the homicide of conservative activist Charlie Kirk. And a few query whether or not the 2 main prediction market corporations may be trusted to run their startups responsibly. Previously 12 months, the founders of each Kalshi and Polymarket have engaged in eyebrow-raising antics that might give pause to traders and regulators alike.
The most important danger hanging over the business, although, is a fundamental enterprise query: Can websites like Kalshi and Polymarket generate sustained curiosity—and income—outdoors of the once-in-four-years presidential contest?
Previous to election night time, almost $211 million of prediction market bets got here flooding in. The next day, gleeful winners lined as much as acquire—happy to have anticipated the triumph of the Democratic incumbent, Woodrow Wilson.
That was in 1916, a 12 months that may show to be the high-water mark of U.S. prediction markets for over a century. When these markets surged again to prominence in final 12 months’s Trump-Harris contest, they have been clothed in Kalshi and Polymarket’s digital wrapper. However the underlying mechanics are very a lot the identical as in Wilson’s period.
You may consider prediction markets as wagers which might be fluid. In contrast to casinos or standard betting websites, the place bettors place a set wager towards the home, individuals on Kalshi and Polymarket wager towards each other and might shut out their “event contract” anytime. Like inventory exchanges, prediction markets function an identical service between purchaser and vendor.
As an illustration, a contract for a closely favored election candidate may cost a little 80¢, which locks in a $1 payout if the candidate wins. The opposing bettor buys a 20¢ ticket that pays $1 if the opposite candidate wins. But when the favored candidate suffers a significant scandal, the worth of that contract would possibly drop to 40¢—leaving the proprietor to determine whether or not to promote it to a different bettor or maintain it until the election outcomes are available.
Whereas it is a type of playing, proponents argue that any destructive social results are outweighed by the highly effective indicators the contracts can present to markets about every little thing from climate in harvest season as to if a given politician will likely be elected. In observe, the nearer to $1 the worth of the occasion contract comes, the larger the chance of the occasion coming to go. Because the Trump election outcomes demonstrated, the markets may be uncannily correct—and the extra folks take part, the extra correct they theoretically change into.
In line with Kalshi cofounder Tarek Mansour, that accuracy is the results of two interlocking components. “They’re a market-based mechanism, so you get the wisdom of the crowds,” he explains. “Quantity two, pores and skin within the sport. When folks have actual cash on the road, they don’t lie.
Why did one thing so helpful fall out of favor within the first place? The most effective reply is that prediction markets obtained swept up in broader Progressive Period campaigns towards playing, simply because the rise of scientific polling pioneered by George Gallup offered a helpful various. (Sarcastically, the anti-gambling crusades of that period typically spared horse racing, since, within the eyes of the moralists, it loved an affiliation with rural American advantage—whereas additionally instructing younger, military-age males to measurement up horseflesh.)
Robin Hanson, a George Mason College professor, sees the controversy over prediction markets as a part of a longtime push and pull between those that view instruments for hypothesis as an ethical risk, and those that see them as helpful. “Moralizing about betting markets goes up and down in cycles,” Hanson observes. “Pretty much all financial markets were illegal at some point, including stocks and life insurance.”
On this view, prediction markets are taking their place subsequent to merchandise like choices and futures contracts, which regulators lengthy frowned on as overly speculative, however at the moment are seen as necessary market indicators.
Lin of Sequoia is a Kalshi board member who studied prediction markets in school, and he believes they provide a superior technique to hedge towards uncertainty, permitting traders to fortify themselves towards, for instance, hostile rate of interest actions. “Right now, the way to do that is to look for interest-sensitive stocks and either buy or short them,” says Lin. “There needs to be a better way.”
Mansour says first-hand expertise led him to the identical conclusion; he as soon as labored on the “exotics” desk of Goldman Sachs, the place he constructed baskets of shares to assist clients take positions on occasions like Brexit.
This push to open prediction markets follows many years of the U.S. banning them—although not completely. In 1998, the Commodity Futures Buying and selling Fee (CFTC) permitted an entity referred to as the Iowa Digital Markets to run betting platforms through which a small group of lecturers may wager very small quantities. The company then gave permission in 2014 to a successor group, PredictIt, to function a considerably broader model.
Previously two years, the authorized chains holding again prediction markets have largely vanished. However the present period of those markets is being formed by startup founders with a penchant for bending the principles.
“Bruh!” Shayne Coplan’s curly head yells on my iPhone display shortly earlier than final 12 months’s election. It’s clear Coplan is sore over a Fortune story that exposed that lots of the wagers on Polymarket had come from fishy trades.
That revelation didn’t dim the final enthusiasm round Polymarket, and within the subsequent months, I repeatedly suggest Zoom or in-person conferences so Coplan can inform me the complete story. Nope: Coplan prefers to do it his method, with direct messages and ambush video calls over Sign, the place he has chosen the Beatles’ Revolver cowl as his avatar.
The 27-year-old Coplan, a New York Metropolis child who obtained deep into cryptocurrency in highschool, began Polymarket in 2020 after dropping out of NYU. One in every of his backers, Rob Hadick of Dragonfly Capital, describes him as good, with a deep, all-consuming ardour for chances. Latest accounts and images of Coplan replicate a founder with a cooler-than-thou have an effect on possessed of deep confidence—or maybe overconfidence. Recalling encounters with him, two crypto executives instructed Fortune of Coplan evaluating himself to Apple founder Steve Jobs.
Coplan has additionally introduced his swagger to the best way he operates his firm. In 2022, Polymarket was hit with a CFTC consent decree barring it from working within the U.S. Regardless of this, there’s ample proof that the location turned a blind eye to People who positioned bets through the use of a VPN to masks their location. (Polymarket disputes this characterization.) It’s fairly attainable that this conduct—or Polymarket’s choice to pay U.S. influencers to advertise the location—defined the Justice Division’s choice shortly after the election to raid Coplan’s condo and seize his smartphone and different units.
The smart response to a federal raid is to let your legal professionals do the speaking. Coplan selected one other technique. Days later, he took to X to tweet “New phone who dis?” The gesture amounted to taunting the prosecutors however would in the end do him no hurt; months later, the Feds dropped the investigation with out submitting costs.
If Coplan relishes being the enfant horrible of prediction markets, Kalshi’s cofounders have taken a distinct tack. Mansour and cofounder Luana Lopes Lara are keen to speak up their observe document of compliance. This included staying properly away from the U.S. market till September 2024, when Kalshi prevailed in a lawsuit towards the CFTC, with a federal choose ruling the company lacked jurisdiction over occasions contracts until they involved “assassination,” “terrorism,” or “gaming.”
Mansour, 29, is barely matted and shares little in widespread with Coplan save for a fixation with chances. Born in California, the Kalshi CEO returned together with his mother and father to a Christian village in Lebanon as a younger little one. “We went through a few periods of war or terrorism. It was an anxiety-inducing period,” recollects Mansour, including that he responded to the turmoil by turning into obsessive about math, after which with moving into MIT. At present, he posts his 5.0 GPA from the college on his LinkedIn web page.
His cofounder has a distinct story and mien. Lopes Lara, additionally 29 and an MIT grad, was born and raised in Brazil and have become knowledgeable ballerina earlier than abruptly pivoting to arithmetic. Polished and straightforward in dialog, she recalled moments when prediction markets straight intersected together with her personal life.
The query “will Kalshi or Polymarket win the most market share?” can be nice fodder for a crowdsourced reply.
The Kalshi cofounders run a decent ship, with Mansour serving as the general public face of the corporate whereas Lopes Lara runs inner operations. The staff intently vets new occasions contracts and has added guidelines to handle unanticipated or controversial outcomes. These embody the “will Trump leave office” contract: Below Kalshi guidelines, that contract can pay out solely partially within the occasion the president dies, quite than paying out “yes” bettors in full.
Polymarket has no such provision for its “will Trump leave office” contract. It has additionally listed different bets that resulted in controversy—amongst them, a latest wager over whether or not the president of Ukraine would put on a swimsuit at a White Home go to. When Volodymyr Zelensky turned up in black raiment that media shops described as a swimsuit, Polymarket nonetheless selected to pay those that purchased “no” contracts. That call adopted a shadowy dispute-resolution course of involving a vote amongst holders of an obscure cryptocurrency—hardly the form of adjudication that mollifies critics or clients.
Coplan’s web site has given rise to different controversies, together with its choice in January to checklist contracts on when the catastrophic fires round Los Angeles can be contained—wagers that detractors blasted as “arson markets.” The location, which depends on crypto-based contracts, has additionally drawn flak for being a locus of “wash trading,” recognized by blockchain forensics corporations, which entails transactions through which one individual takes either side. Whereas wash buying and selling is widespread on many crypto websites as a method for merchants to artificially bump up a coin’s liquidity or feign momentum, its presence makes it arduous to determine the true quantity of wagering on Polymarket. (“Polymarket’s Terms of Use expressly prohibit market manipulation,” an organization spokesperson stated in response to an earlier Fortune article that examined the difficulty.)
On the time, Kalshi declined to sentence the conduct or self-discipline the worker accountable. When requested concerning the episode in a latest interview, Lopes Lara expressed remorse, saying the individual accountable had not knowledgeable her or Mansour concerning the plan. “Everyone makes mistakes,” she stated. “That was a mistake; it was over the line. It’s not something we identify with or would do again.”
Whereas Polymarket and Kalshi have skirmished and pushed boundaries, traders have solely grown extra enthusiastic. This June, Polymarket finalized a $200 million funding led by Peter Thiel’s Founders Fund, valuing the startup at $1 billion. In the meantime, Kalshi the identical month raised $185 million from Sequoia, Paradigm, and others, at a $2 billion valuation. In September, an anonymously sourced report on tech web site The Info claimed each corporations have been elevating more cash at considerably larger valuations.
Polymarket and Kalshi each peaked on Election Day, when Mansour recollects his web site eclipsing even Pornhub (the web’s hottest vacation spot most days). Since then, no wager listed on both web site has come near re-creating the billions of {dollars} of bets generated by the Trump-Harris contest. Day by day app downloads final October topped 100,000 for Kalshi and 50,000 for Polymarket, in keeping with the businesses; the respective figures this June have been nearer to six,500 and 650, in keeping with Apptopia.
For now, it’s arduous to do a head-to-head comparability between the 2 corporations. Kalshi leads in app obtain figures. Internet site visitors tells a distinct story: Similarweb says Polymarket acquired 31.7 million guests between June and August whereas Kalshi acquired 4.5 million. However Polymarket’s wash-trading phenomenon may be very seemingly inflating its site visitors volumes, whereas Kalshi’s app benefit may be discounted by the very fact it has been the one one of many two allowed to function within the U.S.
For Kalshi, victory in final 12 months’s CFTC case has served as a regulatory moat to provide it a aggressive edge. For months, the corporate additionally appeared to have a further political ace up its sleeve in Washington, D.C., within the type of Donald Trump Jr., who turned a paid advisor in January. Kalshi’s benefits have shortly eroded, nonetheless. Polymarket lately acquired an organization that may quickly allow it to function within the U.S. with out violating its ongoing consent decree. And Don Jr. revealed in August that his enterprise capital agency, 1789 Capital, had invested in Polymarket, and that he has joined that startup’s advisory board as properly.
Prediction markets may not be a two-horse race for for much longer. New opponents embody startups like Railbird and one referred to as The Clearing Firm—began by former Polymarket executives. Buying and selling large Robinhood has additionally jumped into the sector, providing a sequence of wagers on high-profile sporting occasions by way of third-party companions, together with however not restricted to Kalshi.
There’s additionally uncertainty round how these corporations plan to earn money. The obvious mannequin is by charging commissions: Kalshi costs round 1% on bets by clients, who’re presently wagering a mean of $19 million per day. For now, Polymarket is charging no charges, although Hadick, the enterprise investor, says the location may simply earn a number of hundred million {dollars} a 12 months if it did so. Each websites are additionally signing partnerships with media and AI corporations that might yield income within the type of knowledge licensing or analysis charges. Crypto might be one other income stream: Polymarket is rumored to be launching a digital token, and Kalshi is speeding to embrace blockchain.
All of this, although, will depend upon the businesses making a essential mass of liquidity for prediction markets—and a rising fame for correct predictions—by persuading on a regular basis folks to make use of them. In line with Lin of Sequoia, these instruments will observe the identical trajectory as some other new expertise, spreading from early adopters to the broader public as they change into extra acquainted.
Kalshi’s hottest bets since final 12 months’s election night time provide a glimpse of how that adoption would possibly happen. Latest buzzy contracts embody wagers on the New York Metropolis mayoral race and two sporting occasions. However Kalshi bettors additionally rushed to put wagers on Trump’s Liberation Day tariffs, and on the resignation of the infamous “kiss cam” Astronomer CEO.
For now, it seems each websites are devoting most of their promotional efforts to sports-related wagers. Whereas that chance seems to be low-hanging fruit—Kalshi’s largest non-election success got here within the type of greater than $500 million in bets on March Insanity—it additionally could also be short-lived. Ordinarily, the sports activities wagers can be a transparent violation of state rules on gaming, which govern casinos and betting websites like DraftKings. Kalshi and Polymarket are counting on considerably convoluted authorized reasoning that “events contracts” are completely different from playing. Whereas Kalshi prevailed in a single courtroom ruling, it isn’t arduous to think about one other courtroom discovering in any other case—and a number of other lawsuits are continuing by way of state courts.
Finally, questions like “Will Kalshi or Polymarket win the most market share?” or “Will an appeals court ban sports betting on prediction markets?” can be nice fodder for a crowdsourced reply from a big group of individuals with pores and skin within the sport. For now, at the least, these are two bets you received’t discover on Kalshi or Polymarket.
The bets drawing wagerers to prediction markets
Politics made Kalshi and Polymarket well-known, however different subjects are attracting large cash
$130.5 million
2025 NBA Finals: Oklahoma Metropolis or Indiana?
$88.5 million
Sept. 2025 Fed price choice: How large a reduce?
$504.2 million
March Insanity, 2025: Selecting NCAA hoops winners.
$218.8 million*
Day by day temperatures in a number of cities
$67.8 million*
Rotten Tomatoes scores: Scores on the assessment web site.
Latest bets on Kalshi. *Cash wagered cumulatively in long-running betting sequence (as of 9/17/25)
This text seems within the October/November challenge of Fortune with the headline “Wanna bet? Why investors are gambling on Kalshi and Polymarket.”
