October proved to be a landmark month for the prediction market industry, as two major platforms, Kalshi and Polymarket, collectively achieved unprecedented trading volumes. Together, these venues processed $7.4 billion in volume during the month, surpassing any prior performance, including their previous peak in November 2024 when election-driven markets tallied $4 billion.
While election-related markets, especially those linked to the New York City mayoral race, continue to generate significant activity—reaching hundreds of millions in volume—sports betting has emerged as a powerful growth catalyst. Kalshi, in particular, posted an outstanding $4.4 billion in trading volume throughout October, while Polymarket recorded $3 billion. These figures represent new all-time highs for both platforms.
Sports markets on Kalshi experienced a notable surge, with the offchain platform processing over $1.1 billion in sports betting volume between October 20 and October 27 alone. In contrast, Kalshi’s political markets registered approximately $51 million in the same timeframe. Polymarket also saw substantial sports betting activity, with trading volume reaching $357 million during that week.
Additionally, traditional sports betting operator DraftKings announced the acquisition of Railbird, a prediction market that will employ Polymarket Clearing as its official settlement system. This development highlights growing intersections between conventional sportsbooks and decentralized prediction market infrastructure.
Several factors appear to be influencing this surge in volume. Among them are recent changes in U.S. tax legislation. The “One Big Beautiful Bill” passed under the Trump administration sets new rules starting in 2026, limiting sports gamblers’ ability to deduct losses to 90% rather than the current 100%. Although regulatory clarity around taxation of prediction markets remains limited, some market participants may be positioning for scenarios where engaging in prediction market sports betting could offer favorable tax treatment compared to traditional sportsbooks.
Speculation around potential future token launches for both platforms has also gained traction within the community. Polymarket, which operates as a decentralized, onchain prediction market, incorporates UMA’s oracle and governance mechanisms, making it a natural candidate for a native token ecosystem. Meanwhile, Kalshi currently functions completely offchain but has attracted attention due to its efforts to engage crypto-native investors, fueling rumors of possible crypto integration down the line.
Overall, the combined growth in election and sports betting volumes reflects a dynamic and expanding landscape for prediction markets. With record-setting figures and increasing institutional interest, Kalshi and Polymarket are demonstrating their capacity to drive significant liquidity and innovation in this emerging sector.
