How the Expanded World Cup is Fueling Prediction Markets
Prediction markets just had a massive month, and we have the 2026 FIFA World Cup to thank for it. Driven by the excitement of a newly expanded 48-team tournament that kicked off on June 11, trading volumes have completely shattered previous records. According to data from DefiLlama, Kalshi reached an astonishing $9.4 billion in trading volume in June alone. To put that growth into perspective, the platform saw about $5.3 billion in May. Kalshi isn’t the only one benefiting from the soccer craze, either. Polymarket International also experienced a healthy surge, climbing from roughly $3.5 billion in May to about $4.3 billion by the end of June.
As the tournament moves into the knockout stages, the trading activity is only getting hotter. High-stakes matchups are drawing millions of dollars in wagers from traders looking to capitalize on the unpredictable nature of the sport. For instance, Canada’s highly anticipated Round of 16 clash against Morocco pulled in more than $48 million in volume on Kalshi and another $26.8 million on Polymarket. The United States’ own Round of 16 match is also capturing significant attention, generating over $2.1 million on Kalshi and roughly $1.6 million on Polymarket as fans and traders bet on who will advance to the quarterfinals.
The Regulatory Tug-of-War Over Event Contracts
While the trading numbers are undoubtedly a massive win for platforms like Kalshi and Polymarket, this explosive growth has placed prediction markets right in the crosshairs of a fierce regulatory battle in the United States. By early spring, nearly a dozen states had already started taking action against these companies. State regulators are divided on the approach—some want to shut down prediction markets entirely, while others are trying to forcefully fold them into existing state gambling laws and tax frameworks to get a piece of the revenue.
However, federal regulators are refusing to back down and are actively blocking states from policing these platforms. CFTC Chair Michael Selig recently condemned the states’ actions, calling them “illegal enforcement actions” against federally regulated exchanges. Selig made it clear that Congress gave the CFTC exclusive authority over commodity derivatives, which includes prediction markets, warning states that any attempt to hijack that authority would result in a court battle.
The debate is now pulling in heavy hitters from outside the government. Casino operators, tribal organizations, and labor groups are actively lobbying Congress to strip the CFTC of its power over sports-event contracts. They are pushing for an amendment to the Digital Asset Market Clarity (CLARITY) Act that would reclassify these markets under traditional state gambling and gaming oversight. Meanwhile, across the Atlantic, European regulators are taking a completely different stance. The European Securities and Markets Authority recently issued a reminder that many of these “event contracts” might already be restricted under existing binary options laws, signaling that a product’s actual mechanics matter much more than what a company decides to call it.
