In 2024, prediction markets called the -2-

Meanwhile, Interactive Brokers has actively avoided offering sports-related prediction markets. Peterffy acknowledged that most of the prediction-market volume at its competitors comes from sports, but he told MarketWatch that Interactive Brokers would not offer sports contracts "in the near future."

"It's just a different thing. It has nothing to do with investing," Peterffy said.

There has certainly been controversy surrounding sports-related prediction markets, with critics saying the contracts are sports betting repackaged to avoid state regulations. Legal experts have pointed out that this may pose a risk to the expansion of prediction markets. Several states have sued prediction-market operators, claiming that they violate state regulations on sports betting. The outcome of those cases may influence the legality of sports-related prediction markets in the future.

Read: When betting on football isn't gambling: Prediction markets are battling to redefine wagers

Still, many companies are moving forward with prediction markets for sports. Sports-betting company DraftKings (DKNG) just announced its own prediction-market offering, bringing sports contracts to states where sports betting isn't legal. FanDuel (FLUT) is also expected to follow soon.

Other platforms, including Coinbase (COIN) and Truth Social (DJT), have announced their own plans to offer prediction markets, including both sports and nonsports contracts.

"Sports have been a big driver thus far. We think sports are kind of a gateway," Devin Ryan, director of financial-technology research at Citizens, told MarketWatch. "This will be about much more than just sports."

Ryan sees prediction markets as an emerging asset class and noted that they're still in the early innings. He noted that prediction markets saw about $10 billion in volume in November 2025 - impressive compared to where they were a year ago, but still tiny compared to other asset classes. Ryan pointed out that crypto trading volumes total over $7 trillion a month, while U.S. equities see over $10 trillion in volume a month.

"From a scaling perspective, it's been rapid and exponential, but it's also tiny," he said. "That being said, we see the conditions forming for this to be something potentially very large."

For prediction markets to catch up to crypto or equities, both Ryan and Peterffy said that financial institutions will have to embrace the new asset class. Some of that institutional adoption is already happening - with New York Stock Exchange owner Intercontinental Exchange (ICE) backing Polymarket in its $2 billion funding deal. If more and more Wall Street firms join the bandwagon, that institutional money could boost the growth of prediction markets even further.

And similar to how politics were the main driver of prediction markets in 2024, volume could shift to categories beyond sports in the future.

"My thesis is that we are going to move away from the concept of gambling - that's kind of where it started - and more toward a tool that can be used by all different types of institutions and individuals," Ryan said.

-Gordon Gottsegen

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(END) Dow Jones Newswires

12-20-25 0730ET