23 April 2026
Prediction markets are overhyped, and underperforming. Quite a bold statement, given all the headlines of billions of dollars of monthly volume, strong growth rates and eye-watering valuation. So, is this an unfounded contrarian view, or a fair analysis based on the underlying data?
The latest implied valuations of the two main prediction markets – Kalshi ($22bn) and Polymarket ($20bn) – are both materially ahead of the two main sports wagering operators Flutter [FanDuel] ($18bn) and DraftKings ($11bn) in the US. Given that Flutter is a multi-national business, the best comparison is DraftKings – with these ‘valuations’ suggesting that Kalshi and Polymarket are worth double what a leading sportsbook is worth in the US – despite the clear regulatory risk of the prediction market business model (based on the number of ongoing lawsuits – not an H2 analysis of the regulatory / legal system in the US).
Recent headlines on prediction market volumes also strongly convey the message that prediction markets are overtaking (have overtaken?) legal sports wagering operators in the US. But beyond the headlines, analysis of the data tells a different story. Below H2 analyses the data behind 2 of the most recent sports events that have accelerated the prediction market hype.
“2026 Super Bowl – Prediction Market Volume of $1.6bn Overtakes Sportsbook Handle of $1.4bn”
Quite a headline – and in some ways entirely true. Based on reported prediction market volume, activity was higher than H2’s revised estimate of sportsbook handle of $1.4bn for the Super Bowl. However, this comparison is nonsensical. It’s akin to measuring apples by the kilo and oranges by the dozen. Both of these are units of measurement, but completely incomparable without some form of metric equalisation.
So how does prediction market volume compare to sportsbook handle?
Download H2's Full Report Here to Find Out