Prediction Markets Boom: $50 Billion in June Revenue Driven by World Cup

The world of prediction markets is experiencing a remarkable upswing. According to a new report from Macquarie Equity Research, trading volume exceeded $50 billion in June, marking another record month for the industry, driven by the FIFA World Cup and strategic partnerships.

Kalshi, in particular, remains the clear market leader. The platform generated approximately $33 billion in monthly volume in June, accounting for 65 percent of the total trading volume. In May, its market share was already an estimated 57 percent. Current developments indicate an industry heading towards an annualized rate of over $500 billion.

Numbers and facts

The most recent Macquarie report emphasizes sports as the primary use case for prediction markets, accounting for roughly half of all activity on these platforms. The analysis builds on Macquarie's earlier estimate that the 2026 FIFA World Cup would generate over $50 billion in global wagering activity. This forecast explicitly excluded prediction market activity at the time. However, June showed that a significant portion of the trading volume was fueled by the World Cup, underscoring the growing importance of prediction markets in sports betting.

Kalshi and ADI Predictstreet, FIFA's official prediction market partner, formed a partnership. Analysts primarily interpret this collaboration as evidence of ADI's need for liquidity rather than Kalshi's need for marketing. ADI Predictstreet recorded approximately 126,000 trades in its first 18 days of operation, highlighting the difficulty of building liquidity even with prominent partnerships. World Cup winner markets on Kalshi and Polymarket have generated approximately $1 billion and $4 billion in trading volume, respectively, showing that established platforms continue to lead.

Background

Strategic partnerships and new product launches are increasingly supporting the infrastructure of the prediction market industry. An example of this is Polymarket's collaboration with Liga MX and Genius Sports. DraftKings has also launched its own prediction market, DKeX. Macquarie views DKeX as an important step towards the convergence of sportsbooks and prediction markets. DraftKings increasingly sees prediction markets as a strategic long-term product extension rather than merely a defensive response to Kalshi.

Robinhood-backed Rothera has also risen rapidly, generating billions of dollars in World Cup-related trading volume within weeks. This demonstrates that distribution can be as crucial as pricing and liquidity in this industry. Meta is also reportedly exploring a standalone prediction market application called Meta Arena, which could further ignite mainstream interest and accelerate mass adoption.

Regulation, however, remains an uncertainty. The Trump administration's Commodity Futures Trading Commission (CFTC) had proposed a framework for prediction markets that would prohibit contracts involving war, terrorism, and assassinations but allow sports event contracts. A future Democratic administration, however, could take a more restrictive stance.

"The proposal underscores that PM have benefited significantly from the Trump administration's support. A future Democratic administration could take a more restrictive view, while strengthening state regulatory authority, leaving industry's regulatory outlook sensitive to political changes." - Macquarie Equity Research, Report

Why it matters for German players

For German players, investments in such prediction markets, especially in Germany, are subject to significant restrictions. The German Interstate Treaty on Gambling 2021 (GlüStV 2021) sets clear rules primarily targeting classic gambling games such as slot machines, online poker, and sports betting. Depending on their design, prediction markets, conceived as financial instruments or wagers on future events, can fall under various legal frameworks in Germany. They often operate in a grey area between financial market regulation and gambling law. For players of German GGL-licensed casinos, strict protective mechanisms are in place: a 1 euro per spin betting limit for slot games and a monthly deposit limit of 1,000 euros, controlled by the central monitoring system LUGAS. These protective measures do not apply to foreign prediction markets. German gambling licenses are issued by the Joint Gambling Authority of the Federal States (GGL). These licenses ensure that providers adhere to high standards of player protection. Prediction markets not explicitly regulated or licensed by the GGL do not offer this security. Licensed German casinos are not permitted to offer unregulated products. Players should therefore inform themselves thoroughly before participating and only play with providers who hold a German license.

What it means for GGL-licensed casinos

For GGL-licensed casinos in Germany, these developments in international prediction markets have no direct impact in terms of expanding their offerings. The focus of licensing is on compliance with the GlüStV 2021, which primarily regulates traditional forms of online gambling. The GGL strictly monitors compliance with all requirements, including player protection, addiction prevention, and the strict observance of deposit limits via the LUGAS system. Should GGL casinos be interested in integrating similar products, these would require a separate regulatory review and likely their own licensing. Given the restrictive and cautious stance of German regulatory authorities towards new forms of gambling, a rapid introduction of prediction markets in the regulated German gambling sector is unlikely. German providers will, for the time being, stick to the established and GGL-approved products to avoid jeopardizing their licenses.