Prediction markets accounted for an estimated 27% of all legal US sports-betting activity during the World Cup, highlighting the rapid growth of platforms such as Kalshi and Polymarket and increasing pressure on traditional sportsbooks.

According to estimates from H2 Gambling Capital, prediction markets’ share of sports-betting volume rose sharply from about 9% at the beginning of the year to 27% during the tournament. While the comparison is not exact because prediction markets and sportsbooks measure activity differently, the figures underscore how quickly the emerging sector is gaining traction.

Kalshi, the largest prediction-market operator in the United States, repeatedly set new trading records during the World Cup. The platform more than doubled the peak activity it recorded during the New York Knicks’ playoff run and experienced trading volumes nearly 10 times higher than levels seen earlier in the year.

The growth was also reflected in user activity. Data from Apptopia showed that Kalshi’s mobile app attracted more daily users during the tournament than DraftKings and FanDuel, the two largest online sports-betting platforms in the US.

Ian Moore, an analyst at Bernstein, said the rise of prediction markets has “put feet to the fire for these traditional sportsbooks to start offering a similar service.” He added: “It is a new opportunity for everyone.”

Prediction markets were not permitted to offer sports-event contracts less than two years ago. However, favorable treatment from the Commodity Futures Trading Commission has enabled companies such as Kalshi and Polymarket to launch sports-related products and challenge attempts by some state regulators to restrict their operations.

The World Cup also served as a major marketing opportunity. Kalshi secured advertising placement on digital boards around the field during the latter stages of the tournament, helping raise awareness among millions of viewers.

One of the sector’s fastest-growing products has been combo wagers, which resemble the parlays that have become highly profitable for sportsbooks. Federal rules have also allowed prediction-market operators to serve customers in states where sports betting remains illegal and accept users aged 18 and above.

Despite the rapid expansion, some analysts believe prediction markets are targeting a somewhat different customer base than traditional sportsbooks.

“It’s pretty clear that prediction markets have had a very good World Cup,” said Ed Birkin, managing director at H2 Gambling Capital. “I think they are less of a threat than some people make out, but they are definitely eating around the edges and these customers will allow them to continue growing their business.”

Birkin added: “It’s clearly a product that resonates with a certain segment of the bettors. It’s a headwind for the sportsbooks.”