Definition
Prediction markets are event-based trading platforms where participants buy and sell YES/NO contracts on real-world outcomes — sports results, election winners, financial events, entertainment — with prices determined by supply and demand rather than a bookmaker's line. A YES contract on "Will Team A win?" pays out at full value if the event occurs; a NO contract pays out if it does not. Prices fluctuate between 0¢ and 100¢ and represent the crowd's collective probability estimate for the outcome.
Unlike a sportsbook, the platform operator does not price the markets or hold margin risk on individual bets. Revenue comes from transaction fees (typically 1–5% of trading volume) rather than a betting hold. The market itself — through continuous trading between participants — determines the price.
How prediction markets work in practice
A participant decides that a particular outcome is more likely than the current market price implies. They buy YES shares at, say, 42¢ each. If the event resolves YES, each share pays 100¢ — a 58¢ profit per share. If the event resolves NO, the shares expire worthless. The more participants buy YES, the higher the price rises until it reflects the consensus probability. This mechanism is the same as a financial prediction exchange — which is why platforms like Kalshi operate under CFTC derivatives regulation in the US rather than a gaming licence.
For iGaming operators, the key point is that this mechanism requires no in-house market-making or trading desk. The venues — Polymarket, Kalshi, Manifold — handle market making. An operator connects their player wallet to an aggregated liquidity feed and offers the resulting product under their brand.
Prediction markets vs sportsbook: the three key differences
| Dimension | Sportsbook | Prediction markets |
|---|---|---|
| Who sets prices | Operator (trading desk) | Market (supply and demand) |
| Who holds risk | Operator | Counterparty / market |
| Revenue model | Margin on turnover (3–12%) | Fee on volume (1–5%) + cross-sell |
| Event coverage | Sports and racing | Sports, politics, finance, entertainment |
| Trading desk required | Yes | No |
Market size (2025–2026)
Prediction markets have grown faster than any other segment in event-based trading:
- Kalshi and Polymarket combined: $76 billion in trading volume in 2025, up from $9 billion in 2024 (KPMG 2026; Zitadelle AG 2026)
- Monthly volume: $20 billion in January 2026 (TRM Labs)
- Sports share: 89% of Kalshi fee revenue came from sports markets in 2025 (KPMG 2026)
- Industry revenue: approximately $2 billion annually today, projected at $8–10 billion by 2030 (CFG Partners)
What "prediction markets for operators" means (B2B context)
In a B2B iGaming context, "prediction markets for operators" refers to the full infrastructure stack that sits between raw venue liquidity and the end player:
- Liquidity aggregation — normalising order books from Polymarket, Kalshi, Manifold and on-chain venues into a single outcome per event
- Operator stack — PAM, wallet, KYC, CRM, bonus engine, risk reporting and compliance
- Casino and sportsbook cross-sell — same wallet, same player view, so a prediction-market session leads directly into casino or sportsbook without re-deposit or re-KYC
This cross-sell layer is the primary economic driver for operators. In a Curaçao deployment (Q2 2026), 41% of prediction-market players placed a casino bet in week one, with a +28% LTV uplift versus a casino-only cohort.
Related terms
- Polybetting — Turbo Stars' B2B prediction-market solution for licensed operators
- Prediction markets platform — the full product page for the Turbo Stars prediction-market stack
- Prediction markets vs sportsbook — a comparison guide for operators
- Polymarket for operators — why Polymarket is a liquidity source, not an operator platform
Frequently asked questions
What is a prediction market?
A prediction market is a trading platform where participants buy and sell contracts on the outcomes of real-world events. Contracts are typically YES/NO binary shares — a YES share pays out if the event occurs, a NO share pays out if it does not. Prices fluctuate between 0 and 100 cents and reflect the collective probability estimate of the crowd, rather than odds set by a bookmaker.
How do prediction markets differ from sports betting?
In sports betting, the operator (bookmaker) sets the odds and holds the risk on every bet. In prediction markets, users trade contracts against each other or against aggregated liquidity from an exchange, and prices are determined by supply and demand. The operator of a prediction-market platform earns a platform or transaction fee rather than a betting margin. Prediction markets also cover non-sports events (elections, finance, entertainment) that a sportsbook typically does not.
What are the largest prediction market platforms?
As of 2026, the largest prediction-market platforms by trading volume are Polymarket (decentralized, USDC-settled on Polygon) and Kalshi (US-regulated, CFTC-licensed derivatives exchange). Combined, they processed over $76 billion in trading volume in 2025 (KPMG 2026; Zitadelle AG 2026). Manifold Markets and a growing number of on-chain venues are secondary sources. For B2B operator deployments, these venues function as liquidity sources rather than end-user products.
Can iGaming operators offer prediction markets under their existing licence?
In several jurisdictions, yes. Curaçao-licensed operators can currently deploy prediction-market products under their existing licence. MGA (Malta) compatibility is in compliance review as of mid-2026. Anjouan supports a crypto-native prediction-market track. US-regulated operators require separate CFTC registration or a state-specific framework, which is more complex. UK and most Tier-1 EU jurisdictions do not yet have an explicit prediction-markets framework.
What does 'prediction markets for operators' mean?
Prediction markets for operators refers to B2B infrastructure that allows a licensed iGaming operator to offer prediction-market contracts to their players as part of their platform. This includes: an aggregation engine that normalises liquidity from venues like Polymarket and Kalshi; an operator-grade UI, analytics and risk layer; PAM and wallet integration so prediction markets share an account with casino and sportsbook; and compliance tooling for relevant jurisdictions.