[DigitalToday reporter Jinju Hong] In the U.S. prediction market, federally regulated Kalshi accounted for 89 percent of trading volume, effectively solidifying control of the market.

A Bank of America report cited by blockchain outlet CoinDesk on April 9 local time showed weekly trading volume in the U.S. prediction market rose 4 percent from the previous week, while Kalshi’s volume increased 6 percent.

The competitive landscape is being reshaped quickly around regulatory status. Bank of America estimated Kalshi’s share at about 89 percent. Polymarket was 7 percent and Crypto.com 4 percent. Polymarket, which had seen a surge in trading in prior weeks, posted a 16 percent drop in overall volume. Crypto.com recorded only a slight increase.

A key issue is whether to view prediction markets as financial products or as gambling. Kalshi treats contracts linked to outcomes such as politics and sports as derivatives under oversight of the U.S. Commodity Futures Trading Commission (CFTC). Polymarket, by contrast, is a blockchain-based platform that has offered trading on event outcomes using cryptocurrencies, but has faced regulatory constraints in the United States.

That difference has become clearer in recent legal disputes. Nevada and Massachusetts obtained state-level temporary restraining orders against Kalshi. New Jersey, by contrast, lost an appeal that sought to apply gambling laws to Kalshi, limiting the scope of enforcement.

The CFTC is also making clear a favorable stance toward prediction markets. The CFTC has filed lawsuits against several state governments, arguing that federal law takes precedence over state-by-state gambling rules. The CFTC leadership also distinguishes sports betting as entertainment while treating event contracts as financial tools for hedging. That means the industry’s battleground is not simply a fight over market share, but over the regulatory framework itself.

The outcome of the litigation is a factor that could divide the industry structure. If the federal government wins, operators such as Kalshi could expand nationwide under a single regulatory system. If it loses, the market could be split into state-by-state systems like online sports betting, potentially slowing growth.

The cryptocurrency industry is also continuing to enter prediction markets. Polymarket remains one of the major global platforms, and volumes rose sharply during major events such as elections. Crypto.com and Coinbase are testing prediction market-style products. Binance said on April 9 that it added a prediction market function to Binance Wallet.

Traditional gaming companies are also responding. FanDuel recently halted part of its fantasy sports business. Bank of America pointed to the spread of prediction markets as one factor behind the move. It said the trend reflects users shifting from betting to products closer to trading.