NEW YORK — Prediction markets are exploding into one of the fastest-growing corners of U.S. finance and sports trading, with billions of dollars in reported volume changing hands every day.
But there is a catch buried inside those astonishing numbers.
A growing share of the activity on platforms such as Kalshi and Polymarket U.S. is being generated by “combo” contracts — multi-event trades that resemble sportsbook parlays and can dramatically magnify reported notional volume even though they represent a much smaller percentage of actual transactions.
That distinction is becoming increasingly important as prediction-market companies compete for customers, investors and bragging rights in an industry that has gone from a political-election niche to a massive sports-driven business.
According to CNBC’s October 6 analysis, combo contracts represented more than half of Kalshi’s reported notional volume in September, even though they accounted for less than 13% of its transactions.
Polymarket’s U.S. platform has seen a similar phenomenon, with combinations approaching roughly half of reported volume as sports trading expands.
The result is a market that really is growing extraordinarily fast — but whose headline numbers require careful interpretation.
What Exactly Is a Combo Contract?
A combo bundles multiple outcomes together into a single contract.
For example, instead of trading only on whether one NFL team wins, a customer could combine several outcomes:
Team A wins.
Team B wins.
Quarterback C throws more than a specified number of yards.
Player D scores a touchdown.
The contract pays out only if all of the required outcomes occur.
That structure closely resembles a traditional sportsbook parlay.
The attraction is simple: because every leg must succeed, combo contracts can offer much larger potential payouts than a single-event position.
But they can also lose very easily.
Kalshi’s combo products operate through dedicated contracts with maximum payouts generally tied to a $1 notional value. If one required component settles unsuccessfully, the combination can settle at zero.
Why Combos Make Volume Look Enormous
The most important issue is how prediction-market volume is counted.
Suppose a trader buys a contract priced at just 5 cents that could ultimately pay $1.
The trader may have actually risked only five cents per contract.
But the reported notional volume can reflect the contract’s $1 face value rather than only the cash the customer paid.
Scale that across millions of low-priced combo contracts and the headline number becomes enormous.
That is why a prediction market can report billions of dollars of notional trading without billions of dollars of actual customer cash being wagered.
Independent volume tracking illustrates the difference.
Over the 30 days ending around October 5, Kalshi recorded roughly $66 billion in contract volume, but the corresponding amount actually paid for those contracts was approximately $15.8 billion.
Those are both legitimate measures.
But they measure very different things.
Prediction Markets Just Had a Monster Month
Even after adjusting for measurement differences, the industry’s expansion remains remarkable.
Across major tracked venues, prediction markets generated roughly $88 billion in notional volume during the latest 30-day period, up about 71% from the previous 30 days.
Kalshi accounted for the majority of that activity.
The platform alone handled more than $66 billion during roughly the same 30-day period, giving it about three-quarters of tracked market volume.
The numbers become even more striking on football weekends.
On October 4, Kalshi generated roughly $3.7 billion to $3.9 billion in notional volume, depending on the reporting window and data source, making it the platform’s biggest day on record.
Across major prediction-market exchanges, around $5 billion in contracts traded that Sunday.
But once again, combos were doing much of the work.
NFL Parlays Have Become the Growth Machine
The beginning of the NFL season dramatically changed the composition of prediction-market trading.
During the September 28-to-October 4 week, Kalshi processed roughly $18.37 billion in contracts, its largest weekly total in the period reviewed by independent tracker DeFi Rate.
A large portion came from what the tracker classified as “Exotics,” a category heavily influenced by multi-leg sports contracts.
Several of the week’s most actively traded markets were sports combos.
Another independent industry tracker estimates that combo or parlay-style contracts represented approximately 57% of reported prediction-market volume at exchanges that disclose the category during the latest 30-day period.
That means what began as an industry best known for elections, Federal Reserve decisions and economic forecasts is increasingly being driven by something much more familiar:
sports betting behavior.
Why a Tiny Trade Can Create a Big Volume Number
Imagine a trader buys 100 contracts in a long-shot combo priced at 3 cents each.
The trader spends:
$3.
But because each contract has a potential $1 face value, those 100 contracts can represent:
$100 in notional volume.
Now imagine millions of similar contracts trading during an NFL Sunday.
Suddenly a comparatively modest amount of cash activity can create billions of dollars in reported contract volume.
That does not mean the reported figure is fraudulent.
Notional value is a common and legitimate metric in financial markets.
Futures, options and derivatives markets frequently report activity using notional amounts.
The problem arises when prediction-market notional volume is compared directly with sportsbook handle, which generally measures the actual amount bettors stake.
They are not equivalent measurements.
CNBC Found Combos Are a Small Share of Trades but a Huge Share of Volume
That distinction is at the heart of CNBC’s analysis.
Combo contracts reportedly accounted for more than 50% of Kalshi’s September notional volume, while representing less than 13% of transactions.
In other words, the vast majority of individual trades were still something else.
Yet combos generated the majority of the headline volume.
That gap exists because combo contracts are often inexpensive on a per-contract basis while still carrying a $1 maximum payout value.
The lower the contract price, the larger the difference can become between the amount actually paid and the notional figure used to describe volume.
Kalshi Is Still Dominating the U.S. Race
Even after considering this accounting effect, Kalshi’s rise has been extraordinary.
During the 30 days through early October, Kalshi handled approximately $66 billion in contracts, compared with roughly $14 billion across Polymarket’s U.S. and international businesses combined, according to one market tracker.
That gave Kalshi more than 80% of the two companies’ combined reported volume during that period.
Its recent growth has also attracted institutional traders.
Major professional trading firms and market makers are increasingly participating in prediction markets, while a new generation of quantitative trading businesses is using algorithms and artificial intelligence to identify pricing opportunities.
Wall Street firms including Jane Street and DRW have been associated with the expanding ecosystem, demonstrating how quickly the sector is moving beyond retail election betting.
Polymarket Is Fighting Back in America
Polymarket, which built much of its reputation around cryptocurrency-funded political markets, has also been expanding aggressively in the United States.
Its U.S. operation has become one of the industry’s fastest-growing venues.
Over the latest 30-day period tracked by DeFi Rate, Polymarket U.S. generated around $10.1 billion in contract volume, an increase of roughly 168% compared with the previous 30 days.
Its international operation generated another roughly $4.7 billion during the same broad period.
Like Kalshi, Polymarket has pushed deeper into sports and combo contracts as it competes for users accustomed to traditional sportsbook parlays.
Prediction Markets Are Starting to Look Like Sportsbooks
This creates one of the industry’s biggest identity questions.
Prediction markets generally argue that they operate as financial exchanges rather than gambling companies.
Users trade event contracts with one another, while the platform provides a regulated marketplace.
Traditional sportsbooks work differently.
A sportsbook generally sets odds, accepts wagers and manages its own risk against customers.
But as prediction exchanges increasingly offer:
NFL moneylines,
point spreads,
player statistics,
multi-leg combinations,
and championship futures,
the consumer experience can look increasingly similar to sports betting.
The distinction has become central to legal battles across the United States.
The Regulatory Fight Isn’t Over
Kalshi operates as a federally regulated Designated Contract Market under the Commodity Futures Trading Commission, giving the company a federal regulatory framework that it argues permits event contracts nationwide.
The CFTC’s own product database shows the expanding universe of federally certified sports and event-based contracts, including football moneylines, spreads and player-statistic products offered by regulated exchanges.
But state gaming regulators have challenged that interpretation.
Several states have argued that sports event contracts amount to gambling and should therefore be regulated under state sports-betting laws rather than exclusively through federal commodities regulation.
The outcome could determine whether prediction markets permanently reshape America’s gambling industry or face tighter restrictions.
The Industry Is Expanding Beyond Sports
Sports may currently be driving much of the growth, but companies are pushing into almost everything.
Prediction markets increasingly allow trading on:
elections,
interest rates,
inflation,
cryptocurrency prices,
entertainment awards,
reality television,
corporate events,
and even pop culture.
Kalshi’s entertainment trading volume reportedly expanded from approximately $43 million in 2024 to more than $800 million in 2026, demonstrating how companies are trying to broaden their audiences beyond politics and sports.
Kalshi has even expanded toward more traditional financial instruments, announcing a stock-index perpetual futures product on October 6, another sign that the line between prediction exchange and conventional financial marketplace is becoming increasingly blurred.
The Bigger Question Isn’t Whether Prediction Markets Are Growing
They clearly are.
The bigger question is how that growth should be measured.
Headline volume makes Kalshi and Polymarket look enormous — and increasingly competitive with some established gambling and financial platforms.
But contract volume, cash paid, transaction count, open interest and sportsbook betting handle all describe different things.
Using one as a substitute for another can produce a misleading picture.
The latest data demonstrates the difference clearly:
Kalshi’s roughly $66 billion of 30-day contract volume corresponded to about $15.8 billion actually paid for contracts.
Combo products then amplify the difference further because very cheap, long-shot contracts can generate large amounts of notional volume relative to the customer’s cash outlay.
None of that erases the industry’s extraordinary growth.
Prediction markets have become one of the hottest new battlegrounds connecting finance, technology, sports and gambling.
NFL Sundays are producing multibillion-dollar reported trading days.
Institutional traders are arriving.
Major financial and crypto companies are entering.
And customers are increasingly treating event contracts like another form of trading — or another way to bet.
Prediction markets really are booming.
But as combo contracts push reported volumes into the tens of billions, the number investors and regulators may increasingly care about isn’t how much the platforms say is “traded” — it’s how much real money is actually changing hands.
