Kalshi recorded its highest monthly trading volume in June, driven by surging activity around the 2026 FIFA World Cup, as prediction markets continue to attract both retail traders and regulatory scrutiny. Data from DefiLlama shows Kalshi processed nearly $9.4 billion in trading volume last month, up from roughly $5.3 billion in May. Polymarket International also saw growth, climbing to approximately $4.3 billion from $3.5 billion in the prior month.
World Cup expands prediction market activity
The 2026 FIFA World Cup, which kicked off on June 11, is the first edition to feature 48 teams, up from 32 in previous tournaments. The expanded format has generated a broader set of match outcomes and prop bets, drawing significant trader interest. CNBC reported that the tournament became the largest single driver of prediction market trading in June, with Dune Analytics showing record notional volumes on both Kalshi and Polymarket.
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Knockout stage matches are seeing particularly high activity. Canada’s Round of 16 match against Morocco had generated over $48 million in trading volume on Kalshi and more than $26.8 million on Polymarket as of Saturday. The United States’ Round of 16 match also drew notable attention, with Kalshi’s market on which team will advance recording over $2.1 million in volume, while a comparable Polymarket market attracted around $1.6 million.
Regulatory battles intensify as volumes climb
The rapid growth of prediction markets has placed them at the center of a widening legal and regulatory debate in the United States. By March, nearly a dozen U.S. states had moved against companies including Kalshi and Polymarket, with some seeking to halt operations and others pushing to bring the markets under existing gambling laws and state tax frameworks.
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Federal regulators have pushed back. In April, CFTC Chair Michael Selig accused states of pursuing illegal enforcement actions against federally regulated exchanges, arguing that Congress granted the agency sole authority over commodity derivatives markets, including prediction markets. To any state that seeks to nullify federal law and seize authority over these markets, Selig said, we will see you in court.
The debate has broadened beyond regulators. In June, casino operators, tribal organizations, and labor groups urged Congress to remove sports-event contracts from CFTC authority through an amendment to the Digital Asset Market Clarity (CLARITY) Act, arguing such contracts should remain under state gambling laws and existing gaming oversight.
Europe takes a different approach
European regulators are also examining prediction markets. On Friday, the European Securities and Markets Authority (ESMA) reminded firms that many event contracts may already fall under existing restrictions on binary options, stating that regulatory classification depends on a product’s characteristics rather than the event contract label attached to it.
Why this matters for readers
The surge in prediction market volume reflects a growing appetite for event-based trading among retail and institutional users. However, the unresolved legal tug-of-war between state and federal authorities creates uncertainty for platforms and users alike. The outcome of these regulatory battles could reshape how prediction markets operate in the U.S. and influence their availability globally. For traders, understanding the evolving legal space is becoming as important as analyzing the markets themselves.
Conclusion
Kalshi’s record June volume underscores the expanding role of prediction markets in sports and event trading, driven by the 2026 World Cup’s expanded format. Yet the industry’s rapid growth continues to attract regulatory pushback at both the state and federal levels, with no clear resolution in sight. The coming months will be critical in determining whether these markets remain under CFTC oversight, shift to state gambling frameworks, or face new restrictions.
FAQs
Q1: What drove Kalshi’s record trading volume in June?
A: The 2026 FIFA World Cup, featuring an expanded 48-team format, generated significant trader interest in match outcomes and prop bets, pushing Kalshi’s monthly volume to nearly $9.4 billion.
Q2: How are U.S. regulators responding to prediction market growth?
A: Multiple states have moved to regulate or halt prediction market operations, while the CFTC asserts sole federal authority over these markets. The legal conflict remains unresolved, with court battles likely ahead.
Q3: Are prediction markets legal in Europe?
A: European regulators, including ESMA, are assessing whether event contracts fall under existing binary options restrictions. The regulatory approach varies by jurisdiction and product characteristics.
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