Prediction Markets Explained: Kalshi & Polymarket's $40B Boom — Which Stocks Win?
About this episode
The episode discusses the rapid growth of prediction markets and their implications for investors.
Prediction markets are taking the financial world by storm. Kalshi and Polymarket have gone from under $1 billion in combined monthly trading volume to over $40 billion in just one year, a 30X explosion fueled by the World Cup, the NFL, elections, and even bets on AI milestones. In this episode of 7investing Live, Simon Erickson is joined by Brett Schafer and Ryan Henderson of the Chit Chat Stocks podcast to break down what this meteoric rise means for investors.We dig into how prediction markets actually work: peer-to-peer event contracts regulated by the CFTC, take rates of just 0.7-1.5% versus the 7-10% cut traditional sportsbooks capture, and why that efficiency gap could be a massive disruption threat to online sports betting giants like DraftKings (NASDAQ:DKNG) and FanDuel parent Flutter Entertainment (NYSE:FLUT). We also explore which brokerages stand to benefit; Interactive Brokers (NASDAQ:IBKR) and Robinhood (NASDAQ:HOOD) are racing to bring event contracts onto their platforms, and whether derivatives exchange CME Group (NASDAQ:CME), now trading near its cheapest valuation in a decade, is being unfairly punished by the market.Plus: the ethical concerns around insider…
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