In a recent discussion, the founders of ProphetX and 365Prediction shared their insights on navigating the competitive landscape of prediction markets amid regulatory challenges.
Every day, new companies seem to emerge in the prediction market sector, raising concerns about a potential bubble due to the influx of entrants and ongoing regulatory uncertainties. However, the growth potential in this nascent industry remains significant, prompting many to pursue ambitious goals.
This situation is reminiscent of the early days of legal online sports betting, following the Supreme Court's repeal of PASPA in 2018. Fast forward eight years, and while many competitors have vanished, the market is still largely dominated by a couple of key players, with others vying for a smaller share.
In 2026, Kalshi has positioned itself as a leader in prediction markets. However, as Bernstein forecasts a surge to $1 trillion in market volume by 2030, it remains to be seen if Kalshi and its main competitor, Polymarket, will mirror the trajectories of established giants like FanDuel and DraftKings.
“Every transformative industry has its early pioneers, but history shows that current leaders may not always remain at the top,” said Laila Mintas, CEO of 365Prediction. “Many forget that Google wasn't the first search engine, nor was Facebook the first social network. They succeeded by offering superior products and user experiences.”
365Prediction is currently awaiting approval from the CFTC for its Designated Contract Market (DCM) and Derivatives Clearing Organization (DCO) applications.
Even if Kalshi and Polymarket maintain their leading positions, a smaller share of the prediction market could still be lucrative. The market's potential is underscored by the $145 trillion in assets managed by major brokerages.
“That’s an enormous figure,” noted Dean Sisun, co-founder and CEO of ProphetX, which recently received DCM and DCO approval. “If we activate prediction markets across all those assets, the turnover could reach trillions annually.”
As established market makers enter this arena, the accessibility of these markets will expand. “Who knows how large this market could grow? Capturing just 10 basis points could yield a multi-billion dollar company,” Sisun added.
For ProphetX, the focus is on B2B partnerships rather than B2C competition, especially with major players like DraftKings and FanDuel in the mix. Sisun anticipates launching five or six partnerships by the upcoming football season, starting with independent software vendors and planning future deals with Futures Commission Merchants pending CFTC approval.
“Our strategy is not to fully engage in the B2C market, which is likely to become overly saturated quickly,” he explained. “While we believe we can generate revenue from that sector, we don't aim to be among the top three players. Our strength lies in B2B opportunities, where we intend to compete against entities like crypto.com and Kalshi.”