Where Prediction Market Volume Goes in 2027

Prediction-market volume has grown from a niche curiosity to a sports-adjacent industry in a few years. The 2024 US election produced more than $3 billion in trades on Polymarket alone. Kalshi reported an $871 million haul on a single Super Bowl Sunday in 2026. The 2026 FIFA World Cup generated more than $1.2 billion in winner-market volume on Kalshi.

The question for 2027 is not whether volume grows. It is where the growth comes from, and whether it is durable. Three categories are competing: sports, elections and macro data, and a newer category that platforms call attention markets.

Sports is the engine

Sports is the largest and most durable category. Kalshi's 2025 fee revenue was about $263.5 million, with almost 90% coming from sports. Polymarket's global mix is broader, but sports is still the largest category by volume.

The reason is simple: sports has a daily calendar, a large audience and a clear resolution source. It also has an existing competitor set in sportsbooks, which prediction markets can undercut on price and product.

The risk is regulatory. State gaming regulators view sports event contracts as unlicensed sports betting. The state regulators article explains the lawsuits. If the states win, the sports engine stalls in the US.

The other risk is margin. Sports betting is a low-margin, high-volume business. Prediction markets have to pay for liquidity, compliance and customer acquisition. Kalshi's fee revenue is large, but its costs are also rising.

Elections and politics

Election markets are the category that made Polymarket famous. The 2024 presidential market was a global news event, and the 2026 midterms and 2028 presidential cycle will produce more volume.

Politics is also the most regulated category. France and other jurisdictions have cited election integrity concerns. US states have argued that election betting is gambling. Congress has considered bans on certain political markets.

The election betting ethics article weighs the arguments.

For 2027, expect election volume to spike around primaries, debates and the run-up to 2028. Expect regulatory scrutiny to spike at the same time.

Macro and financial markets

A third growth area is macro data: inflation, unemployment, interest rates, GDP and central-bank decisions. Kalshi has built a franchise in these markets, and a 2026 Federal Reserve study found that its macro markets were a useful measure of expectations.

Macro markets have advantages. They are less likely to be classified as gambling, they attract institutional hedgers and they have a clear data source. They also have a natural audience among traders who already follow economic releases.

The limitation is that macro markets are competitive with existing futures and swaps. A prediction market that offers a binary outcome on CPI may be less useful to a hedger than a deep, liquid derivatives market. The hedging guide explains the use case.

Attention markets

In 2026, Polymarket announced an expansion into "attention markets," where users bet on what is likely to go viral, according to Bloomberg. The category is a hybrid of prediction markets and memecoins.

Attention markets could attract a younger, crypto-native audience. They could also attract regulatory scrutiny, because the outcomes are subjective and the potential for manipulation is high. The manipulation cases article explains why subjective markets are harder to police.

The institutional channel

The largest untapped source of volume is institutional. ICE's investment in Polymarket, Kalshi's partnerships with media companies and the growth of broker integrations all point in the same direction: prediction markets are becoming a distribution channel for event risk.

If institutions start using event contracts to hedge, volume could grow faster than retail interest alone would suggest. The hedging guide covers the use case.

The obstacle is trust. Institutions need clear rules, reliable resolution and a regulator they understand. The regulation outlook explains the legal uncertainty.

The limits to growth

Three limits will constrain volume in 2027.

First, user losses. A 2026 Wall Street Journal analysis found that more than 70% of prediction-market users lose money, while a tiny share captures most profits. A product that most users lose on has a retention problem.

Second, regulation. Bans and geoblocks reduce the addressable market. More than 30 jurisdictions have restricted Polymarket.

Third, liquidity fragmentation. Volume is split across Polymarket, Kalshi, Crypto.com, Robinhood, Coinbase and others. Fragmentation reduces depth and widens spreads, which makes the product less attractive.

The retail retention problem

Volume is not the same as a healthy user base. A market can generate billions in trades while most users lose money and leave. That is a churn problem, and it limits long-term growth.

The platforms are aware of it. They invest in education, market-making incentives and product features that make trading feel less like gambling. Those efforts help, but they do not change the underlying distribution of outcomes.

A product that retains users because they enjoy the experience, not because they expect to profit, can still be a large business. A product that retains users only because they are chasing losses is a regulatory and reputational risk. The beginner profitability guide explains the base rates.

A base case for 2027

The most likely outcome is continued growth in sports and macro, a spike around the 2028 election cycle, and a gradual expansion of attention markets. Regulation will remain a patchwork, with the US preemption fight unresolved for much of the year.

The 2027 scenarios article explains how that base case could change.

For traders, the practical implication is that liquidity will concentrate in a few high-volume markets. The how to find good markets guide explains how to avoid the thin ones.