Prediction markets Polymarket and Kalshi processed $25 billion in trading volume during April 2026, up tenfold from a year prior. These platforms have secured partnerships with major media outlets including The Wall Street Journal and New York Stock Exchange parent companies, bringing prediction markets into mainstream finance despite regulatory hurdles.

Professional traders known as "sharps" are exploiting market inefficiencies, earning six and seven-figure annual returns while amateurs lose thousands. Federal prosecutors have charged insiders with using classified information for profitable wagers, including one case involving $1.2 million in suspected insider profits on a U.S. strike against Iran.

After facing bans under the previous administration, these platforms now operate under CFTC oversight. Polymarket secured approval by purchasing a federally licensed derivatives exchange, while Kalshi won a court case allowing political betting. The market remains immature and illiquid, creating persistent opportunities for informed traders despite growing scrutiny from regulators.