Source: Bankless

Author: David Christopher

Original Title: Did Prediction Markets Win the Super Bowl?

Translation and Compilation: BitpushNews

This year's Super Bowl—Seattle Seahawks vs. New England Patriots—lacked the star power of last year's Chiefs vs. Eagles with Taylor Swift in attendance, but it marks a turning point: prediction markets are being explicitly viewed for the first time as a true competitor to traditional sports betting.

The two major prediction market platforms, Kalshi and Polymarket, opened markets around the game, halftime show, advertisements, and more, with preliminary data painting an interesting and complex picture.

Before we begin, a quick note: sports betting companies have not yet compiled their total betting amounts—this takes a few days. Therefore, this article analyzes the predicted data from sports betting entities against the actual trading volume in prediction markets.

Sports Betting Predictions: New Highs, but Slowing Growth

The American Gaming Association estimates that U.S. sports betting companies will see approximately $1.76 billion in bets for the 60th Super Bowl, setting a record with a year-over-year increase of about 27%. While specific numbers vary slightly by source, most predictions point in the same direction: another record high, continuing the eight-year growth trend since the Supreme Court allowed states to legalize sports betting in 2018.

However, the growth rate is clearly slowing. Currently, 39 states and Washington D.C. have opened sports betting, with Missouri being the only new addition in this cycle—indicating that the explosive growth driven by market expansion in previous years is giving way to more gradual growth. In this context, prediction markets have become another factor suppressing growth. Ed Birkin from H2 Gambling Capital told Fortune magazine that he estimates prediction markets will account for 80% of this year's year-over-year increase in betting activity, predicting that the trading volume in prediction markets during the entire event will reach $630 million.

Based on currently available data, the performance of prediction markets seems to fall far short of that figure.

Kalshi

Kalshi's markets specifically opened for the Super Bowl (i.e., contracts directly linked to the game, halftime show, and broadcasts) generated substantial but below-forecast trading volume:

• Bad Bunny halftime show opening song: $113.5 million

• Which companies will air ads: $72.2 million

• Who will perform during the game: $47.3 million

In just these few leading markets, the total trading volume is about $233 million, far below analysts' prediction of $630 million for the entire prediction market.

Additionally, Kalshi's flagship NFL market—a "who will win the Super Bowl" contract that has been open for months throughout the season—has a total trading volume exceeding $500 million. However, this figure reflects the cumulative trading volume for the entire NFL season, not just the Super Bowl weekend. Even so, this is still less than a third of what sports betting companies expect for a single Super Bowl event.

For months, sports betting has accounted for the vast majority (over 90%) of Kalshi's total trading volume, thanks to its promotional channels that are on par with or even superior to those of sports betting companies.

First, Kalshi operates under federal regulation by the U.S. Commodity Futures Trading Commission, allowing U.S. users to access it directly through its mobile app, just like they would with a sports betting app. Coupled with advertising funding from venture capital and a partnership with Robinhood, Kalshi stands out.

This foundation is paying off: in January alone, Kalshi's downloads reached 1.9 million, while the new prediction market apps launched by DraftKings and FanDuel in December totaled less than 100,000 downloads (these two apps launched in states where their traditional sports betting apps are not allowed, but have seen lackluster responses so far).

Moreover, DraftKings announced a partnership with Crypto.com last Friday to expand its event contract products, indicating that existing giants are taking this threat seriously.

Polymarket

Polymarket's comparable NFL market trading volume throughout the season is about $700 million—higher than Kalshi—but the situation for its Super Bowl-specific markets is different.

Polymarket's top three Super Bowl markets have a total trading volume of about $76 million:

• Home game market: $55.26 million

• Super Bowl MVP: $12 million

• Who will perform the halftime show: $9 million

Polymarket lacks Kalshi's regulatory approval in the U.S., meaning American users cannot access it directly through a mobile app. Technically, Polymarket acquired a CFTC-registered exchange last year and now has a U.S. app, but it is currently being gradually opened through a waitlist, and its Super Bowl products are limited.

As of a week before the game, the app hadn't even listed any sports markets, with the full suite of Super Bowl features only available on its global website.

Thus, most U.S. users still need to access it via the website, using VPNs, etc. For casual sports betting players, this is not even close to the same starting line as downloading Kalshi from the App Store.

However, Polymarket's real standout feature is its primary use case—information discovery. In the halftime show performer market, Lady Gaga's probability remained stable at around 80% in the days leading up to the event—far ahead of her surprise appearance in the halftime show, which had not been reported by Billboard magazine and indeed surprised everyone watching with me.

Regulatory Progress

All of this is happening against a backdrop of unresolved regulatory conflicts.

Kalshi operates as an exchange under CFTC federal regulation, which has allowed its sports contracts to advance—especially after the new CFTC chair, Michael Selig, stated that he would not block or cede regulatory authority to the states. State gaming regulators, who oversee sports betting companies, continue to challenge Kalshi and its peers in court, with many analysts expecting these cases to eventually reach the Supreme Court.

Currently, prediction markets operate in a gray area, allowing them to cover the nation without needing individual state licenses—a structural advantage that sports betting companies find difficult to replicate.

Conclusion

So, did prediction markets meet the hype expectations for Super Bowl LX? Relative to the $630 million prediction, they did not fully meet it.

In the top Super Bowl-specific markets visible on the two leading platforms, the total trading volume is about $310 million—about half of the predicted value. The NFL markets throughout the season have achieved significant trading volumes on both platforms, but that is the cumulative total of months of football events, not a single-week explosion for Super Bowl weekend.

Context is also important. Kalshi's 1.9 million downloads in January dwarfs the combined total of DraftKings and FanDuel's prediction market apps.

This pressure has already been reflected in stock prices—according to Fortune magazine, the stock price of FanDuel's parent company, Flutter Entertainment, has fallen for eight consecutive weeks, marking its longest decline in 23 years; DraftKings' stock price has hovered at a low not seen since 2023, down over 60% from its historical peak.

Bloomberg data shows that in the past three months, market expectations for Flutter's fourth-quarter earnings have been significantly downgraded by nearly 49%, and DraftKings' expectations have also dropped by 29%. Imagine if someone had bet on Polymarket that "DraftKings will underperform expectations"; they might have quietly profited by now.

Prediction markets may not have conquered the Super Bowl overnight, but they have certainly made their entrance—and for traditional sports betting platforms, the trajectory of this trend is enough to raise alarms.

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