After 35 years of writing about stocks, it isn’t often that a genuinely new asset class comes along. But that’s what has happened over the past 18 months with prediction markets — exchanges where people trade contracts on the outcome of real-world events. Who wins the World Cup. What Trump says in a speech. Whether CPI prints above 3%. Even whether it rains in New York on Saturday.
The mechanics are elegantly simple. Each contract is a yes/no question that pays $1.00 if the event happens and zero if it doesn’t. The price at any moment — say, 67 cents — is the market’s real-time estimate of the probability (67%). Buy “yes” at 67 cents and you’re risking 67 cents to make 33. Prices move continuously as news breaks, which is why prediction-market odds now appear in mainstream news coverage and even in Google Finance, right beside stock quotes.
If this sounds like gambling dressed up in a suit, you’re not entirely wrong — and that tension is at the heart of both the opportunity and the risk. But the scale is impossible to ignore. Industry volume hit roughly US$21 billion per month by early 2026. Kalshi, the largest U.S.-regulated exchange, traded nearly $40 billion in contracts over the trailing year. Polymarket, its crypto-native rival, set a single-day record of $425 million in February when its Iran-related markets resolved. Fifty million people now use these platforms. This is no longer a niche.
The catch: the pure plays are private
Here’s the frustrating part for equity investors. The two category leaders — Kalshi (valued near $22 billion in its latest funding round) and Polymarket (around $15 billion) — are both private. You can’t buy them. Wall Street’s clearest endorsement came in October 2025, when Intercontinental Exchange, parent of the NYSE, invested up to $2 billion in Polymarket. When the owner of the New York Stock Exchange writes a multi-billion-dollar cheque, the “it’s just gambling” argument gets harder to sustain.
So, the public-market play runs through the distributors and the plumbing — the brokers, exchanges, and betting companies bolting prediction markets onto platforms that already have millions of customers. There are several ways in.
Robinhood Markets (NDQ: HOOD)
Robinhood is the purest and most successful public play. It launched its Prediction Markets Hub in March 2025, piping Kalshi’s regulated contracts into its app, and the product became the fastest-growing new business in the company’s history: over 12 billion event contracts traded in 2025, with first-quarter 2026 “other trading revenue” up 320% year-over-year. Bernstein estimates prediction markets will generate roughly $586 million of Robinhood revenue this year. The company is also buying the LedgerX exchange and clearinghouse and building its own exchange (Rothera) with market-maker Susquehanna, so it will soon own the infrastructure rather than renting Kalshi’s.
The caveat is the price tag. The stock roughly tripled in 2025, partly on prediction-market enthusiasm, and now carries a market cap near $100 billion. You are paying up for growth. But if you want one liquid, well-run stock that captures this theme — and a lot of other retail-trading momentum besides — this is it.
Interactive Brokers (NDQ: IBKR)
The sober alternative. IBKR runs its own CFTC-regulated event exchange, ForecastEx, and has integrated contracts from Kalshi and CME into a single account alongside stocks, options, and futures. Its prediction business skews toward economic data and politics rather than sports parlays, which may age better if Congress cracks down on sports contracts. Interactive Brokers is also simply a superb business — fortress balance sheet, industry-leading margins — where prediction markets are a free growth option on top of a core franchise you’d be happy owning anyway.
Intercontinental Exchange (NYSE: ICE)
The backdoor into Polymarket. ICE’s investment gives it roughly a quarter of the company plus global distribution rights to Polymarket’s data — and event-probability data may prove as valuable to institutions as the trading itself. You get that optionality wrapped inside a toll-booth exchange and data business with famously durable economics. CME Group (NDQ: CME), which powers FanDuel Predicts, offers a similar infrastructure angle.
The sportsbooks: DraftKings and Flutter
DraftKings (NDQ: DKNG) spent $250 million buying the Railbird exchange and launched its own prediction platform, DKeX, this summer; Flutter (NYSE: FLUT) partnered its FanDuel brand with CME. For both, the real prize is offering sports contracts in states like California and Texas where conventional sports betting remains illegal — federal CFTC regulation trumps state gaming law, at least for now. But these are defensive moves as much as offensive ones: prediction markets threaten to disintermediate the sportsbooks’ core business, and both stocks come with the customer-acquisition costs and promotional wars of the betting industry. I’d treat them as trades, not core holdings.
The pluses and minuses
The bull case is straightforward. This is a new, federally regulated asset class growing triple digits, with the 2026 World Cup expected to add $5–10 billion in volume by itself and the midterm elections coming right behind it. Distribution is consolidating into the hands of a few public companies, and Bernstein argues Kalshi and Polymarket themselves are logical takeover targets — a bid for either would light up the whole sector.
Now the minuses, and they’re real. First, regulation: state gaming authorities in Nevada, Arizona, Wisconsin, and elsewhere are suing, arguing sports contracts are just unlicensed bookmaking, and bills in Congress would ban sports event contracts outright.
Since sports represent nearly 90% of Kalshi’s volume, an adverse ruling would hit hard. Second, the “peer-to-peer” framing is a bit of a fig leaf — institutional market makers like Susquehanna fill most retail orders at a small edge, so casual traders face the same subtle house advantage they do everywhere else. Third, there’s headline risk: insider-trading scandals or problem-gambling backlash could sour regulators quickly. And finally, much of the growth is already priced into these stocks, Robinhood especially.
The bottom line
For readers who want to participate in the markets themselves, the easiest on ramp by far is Robinhood. If you have an account, you can trade event contracts in about two minutes, commission-free, inside a federally regulated framework — no crypto wallet, no new platform. Interactive Brokers offers the same for those who prefer a full-service broker. Treat any direct trading as entertainment money; these are binary bets, and the market makers are sharper than you are.
For investors, my preference is to own the theme through equities. Robinhood is the growth engine — buy the dips rather than chase it. Interactive Brokers and ICE are the ways to own the trend without betting the farm on it. Whatever you think of a world that puts a live price on everything from Fed meetings to celebrity engagements, that world has arrived — and, as usual, the surest money is being made by the people who own the exchange, not the people placing the bets.
Glenn Rogers is a successful investor and entrepreneur who has held senior executive positions in the US and Canada. He lives with his family in Southern California.