Jefferies: Prediction Market Daily Volume Surges 80% in June, Sports Accounts for 89%

With a big assist from sports event contracts, average daily volume (ADV) across the prediction market industry swelled 80% on a month-over-month (m/m) basis in June, reaching $1.7 billion, according to Jefferies data.

In a new report to clients, Jefferies analyst Daniel Fannon points out that Kalshi, the largest yes/no exchange operator, outpaced the industry last month in terms of both ADV and open interest growth. On a sequential basis, Kalshi’s ADV surged 90% last month while open interest on the platform jumped 94%, well ahead of the broader industry increase of 64%.

Some projections indicate Kalshi controls an estimated 90% share of the domestic prediction market and the June data cited by Jefferies aren’t far off that mark. The research firm notes that Kalshi’s June ADV was $1.1 billion with rival Polymarket seeing average daily turnover of $469 million. Said another way, just two prediction markets controlled nearly $1.6 billion of the industry’s June ADV of $1.7 billion. That dominance is also evidence across open interest (OI).

OI refers to the total amount of active, unsettled contracts on a prediction market.

Sports Of Course, But There’s More

The preeminent ongoing legal and regulatory debate surrounding domestic prediction markets is whether or not these are sports wagering companies. In large part, criticism to that effect is born out of the prevalence of sports derivatives on platforms such as Kalshi and Polymarket.

While the industry is diversifying its product mix, sports event contracts are a major part of the business. Those derivatives’ ADV jumped 89% last month, but there was a bright spot in terms of 93% volume growth in non-sports category.

Non-sports growth is essential because it can defray yes/no exchanges’ regulatory risk while proving to investors that growing valuations are justified by way of diverse product lineups.

June Brought Hot Prediction Market Competition

As Fannon notes, June was also interesting from a competitive standpoint. In the sixth month of the year, Rothera, a standalone entity in which Robinhood and Susquehanna International Group are investors, began taking on Major League Baseball and World Cup order flow that previously would have been routed through Kalshi.

Likewise, Cboe Global Markets rolled out Cboe Predicts on Interactive Brokers and Schwab while DraftKings debuted DKeX, its in-house exchange. That means DraftKings no longer needs to run yes/no trades through third parties.

Volume on Rothera is “already been strong, with $70 million ADV in June. On 6/26, DraftKings launched its proprietary prediction markets exchanges, DKeX, with $3.4 billion in annualized consumer volume and $11.3 billion annualized total trading volume for the week ending 6/21,” wrote Fannon.