This Week in Prediction Markets — May 9, 2026

Big week for a category that's been quietly becoming un-ignorable. Kalshi just raised a billion dollars at double its previous valuation, FanDuel's CEO is out and prediction markets are a big reason why, FIFA is making the World Cup the biggest stage the category has ever played on, campaign staffers are betting on their own candidates with inside information, the Wall Street Journal ran the numbers on who's actually winning on these platforms (spoiler: probably not you), and Reuters makes the case that prediction markets are gambling — and that's actually fine. If you've been wondering whether prediction markets are actually becoming a thing — this is your week to pay attention.

Five months ago, Kalshi raised money at an $11 billion valuation. This week, it closed a $1 billion Series F led by Coatue — with Sequoia, Andreessen Horowitz, IVP, Paradigm, Morgan Stanley, and ARK Invest all participating — at a $22 billion valuation. It doubled in five months.

For context: that puts Kalshi in the same valuation range as major publicly traded media and financial data companies. This isn't a hot startup getting frothy venture money anymore. When Morgan Stanley and ARK Invest are writing checks alongside the crypto-native funds, institutional finance has made its call on whether this category is real. They've decided it is. The capital going into prediction markets right now is the kind that builds infrastructure, not hype — and that's worth paying attention to.

Amy Howe is out as FanDuel CEO after five years, replaced by company president Christian Genetski. Flutter, FanDuel's parent, didn't sugarcoat it: "It's no secret that FanDuel has underperformed." Revenue grew just 6% while the broader Flutter business surged. The sportsbook's handle — the total amount wagered — dropped 9%.

The context most coverage glossed over: FanDuel has been watching Kalshi and Polymarket eat into a category it never saw coming. In response, it launched its own prediction markets app and pledged up to $300 million to build it out. That's not a company quietly diversifying — that's a company that recognizes its core business is under pressure from a new kind of competitor. When the market leader starts making personnel moves and emergency investments in the thing that's threatening it, the disruption is no longer theoretical. This is what an industry in transition looks like from the inside.

FIFA announced a commercial partnership with ADI PredictStreet — owned by Abu Dhabi's royal family — making it the official prediction market partner of the 2026 World Cup. Fans will be able to forecast match outcomes, tournament statistics, group-stage standings, and in-game props on a platform built around FIFA's official historical data. The tournament kicks off June 11 across 16 host cities in the US, Canada, and Mexico.

FIFA isn't alone. The Athletic reports that MLB, MLS, UFC, and La Liga have already signed deals with Polymarket, and the NHL has partnerships with both Kalshi and Polymarket. The MLB deal alone is reportedly worth $300 million over four years. The two holdouts drawing the most attention: the NFL and NBA. Industry analysts believe both will eventually get there — and when they do, one analyst told The Athletic, "that's the tipping point of where it gets real for this industry." For now, the World Cup is the biggest stage prediction markets have ever played on. The category is about to get a lot more visible.

NPR broke a story this week that deserves more attention than it got: campaign staffers are betting on their own candidates using private polling data they have access to before it goes public, and making thousands of dollars doing it. One staffer described the method matter-of-factly — see an unreleased poll, compare it to the current market odds, buy contracts before the information is public, sell after it moves.

Is it illegal? Possibly. The CFTC, which regulates prediction markets, hasn't tested it in court. A former CFTC trial attorney told NPR the activity "probably checks the boxes" for an insider trading investigation — but the agency hasn't brought a case yet, and a former commissioner said the CFTC simply isn't equipped to. The Senate has voted to ban senators and their staff from trading. The White House has warned its own staff. None of it covers campaign operatives.

This is the growing-pains story of a category that scaled faster than the rules governing it. It won't stay a Wild West — but for now, the people closest to the information are the ones with the clearest edge.

A sweeping Wall Street Journal analysis found that 67% of profits on Polymarket go to just 0.1% of accounts — roughly 2,000 accounts that have made nearly half a billion dollars since November 2022. Kalshi's own numbers aren't flattering either: the platform acknowledged there are 2.9 unprofitable users for every profitable one. Meanwhile, monthly trading volume has grown from $1.8 billion in April 2025 to $24.2 billion this April.

The mechanics aren't complicated. There's no house — users trade against each other. But some of those users are professionals running bots that execute tens of thousands of trades a day, with access to better data and faster algorithms than any casual participant. The sports and "mention markets" (betting on whether a public figure will say a specific word) are the worst offenders — returns on the latter are described as worse than most Las Vegas slot machines. This doesn't mean prediction markets are a scam. It means they're a market, and markets have winners and losers. The Informed Generalist should know which side of that ledger most people end up on.

Reuters ran an opinion piece this week making an argument you don't hear often: yes, prediction markets are gambling — and that's not the problem everyone thinks it is. The piece traces the debate back to the famous 1980 bet between biologist Paul Ehrlich and economist Julian Simon over whether commodity prices would rise over a decade (Simon won), noting that Ehrlich himself used the word "gambler" to describe the exercise. The distinction between that kind of bet and what Kalshi offers today, the column argues, is semantics, not substance.

The more interesting case Reuters makes is about short-termism. Critics of prediction markets — and speculation generally — often argue that short-term trading destroys value. The counterargument: without short-term traders, price discovery breaks down. Markets adjust slowly to new information, capital gets misallocated, and everyone's worse off. Research backs this up: a landmark 2008 study found that the Iowa Electronic Markets outperformed polls 74% of the time across five presidential elections. A Vanderbilt study found Polymarket beat traditional polls in predicting the 2024 presidential outcome, particularly in swing states. The column's conclusion: "Gambling via prediction markets — and speculation more generally — may sound unsavory, but markets would struggle to function well without them." Whether you agree or not, it's a useful frame for understanding why institutional money keeps flowing in.

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