As the Super Bowl approaches, Americans are preparing to wager record sums on the NFL’s championship game, with estimates topping $1.5 billion in bets. This year’s surge reflects more than fan enthusiasm. It highlights a growing contest between traditional sportsbooks and prediction markets that now allow millions of residents in states without legalized sports betting to place wagers legally.

Prediction market platforms such as Kalshi and Polymarket operate under federal oversight and offer contracts on event outcomes across sports, politics, and the economy. Their structure has opened access in large states like California and Texas, where lawmakers have yet to approve conventional sports wagering. For many residents in those jurisdictions, prediction markets represent the first legal option to participate in Super Bowl betting.

A Growing Alternative to State-Licensed Sportsbooks

Since the Supreme Court’s 2018 ruling that allowed states to legalize sports betting, companies like FanDuel and DraftKings have built a dominant presence, controlling about 80% of the U.S. market. Through November of last year, Americans placed nearly $151 billion in bets, generating about $15 billion in revenue for sportsbooks, according to the American Gaming Association.

Prediction markets approach wagering differently. Users trade contracts tied to outcomes, and platforms earn fees from trading volume rather than losses. Kalshi and Polymarket, both founded within the past decade, have used this model to scale rapidly. Sports now account for the bulk of their activity, even though both companies also list unconventional markets, including cultural and political outcomes.

The Super Bowl has become a focal point. Kalshi offers a wide menu of contracts tied to Super Bowl LX, including game winners, point spreads, totals, and player performance outcomes. Trading volume on Kalshi’s pro football championship market exceeded $146 million early in the week leading up to the game, and the platform reported $543 million in trades during conference championship weekend alone, according to The Wall Street Journal.

Polymarket, which returned to U.S. access in December after a three-year regulatory hiatus, has also seen heavy activity. Its Super Bowl-related markets have attracted hundreds of thousands of dollars in trading, while its broader Super Bowl LX champion market surpassed $688 million in total volume, reflecting intense interest as the NFL postseason narrowed.

Sportsbooks Enter the Prediction Market Space

Facing competition, FanDuel and DraftKings launched their own prediction products last month, including in states that prohibit sportsbook wagering. FanDuel Chief Executive Amy Howe said predictions offer broader reach while the company continues lobbying state lawmakers. “The aspiration is still to legalize as much of the United States as we can—that is the North Star,” Howe says.

DraftKings Chief Executive Jason Robins has downplayed the immediate competitive threat while acknowledging regulatory concerns. “It’s not a competitive product with the traditional online sports betting product at this point,” Robins says. “But I can understand why, for a state, they would feel like it could be a threat to that and they wouldn’t like it.”

Despite their expansion, both companies face regulatory friction. Nevada regulators cited conflicts between prediction markets and gambling licenses, prompting FanDuel and DraftKings to abandon licensing efforts in the state last year.

Regulatory and Integrity Concerns Intensify

State regulators and attorneys general argue that prediction markets bypass consumer protections tied to gambling licenses, including age limits, addiction safeguards, and fraud monitoring. Most states require sportsbook users to be at least 21, while prediction markets permit participants as young as 18.

Kalshi maintains that it answers to the Commodity Futures Trading Commission rather than state authorities. “We use a variety of tools before and after people trade to prevent illegal trading and bring enforcement action when violations happen,” a company spokesperson said.

Sports leagues have added pressure. NCAA President Charlie Baker urged the CFTC to halt college-sports contracts, warning that prediction markets pose risks to student-athletes. “Let’s face it—college sports prediction markets are sports betting,” Baker told the Journal, “and targeting states that haven’t legalized sports betting is creating a massive risk to the integrity of the game and to student-athletes.”

NFL Executive Vice President Jeff Miller echoed those concerns in testimony to Congress. “In each of these state-regulated markets, regulators and state legislators closely monitor betting activity and, with input from professional sports leagues, can determine which bets and wager levels are acceptable,” Miller wrote. “Those guardrails do not exist in prediction markets.”

The National Hockey League has taken a different route, entering agreements with Kalshi and Polymarket that allow the league to influence available contracts. “If you’re part of it,” Keith Wachtel said, “then you have the ability to control and monitor more effectively.”

As betting scandals and match-fixing investigations continue to surface across professional sports, the rapid rise of prediction markets during the Super Bowl season underscores a central tension: expanding access while preserving integrity. With legal challenges expected to reach the Supreme Court, the outcome of this rivalry may shape how Americans wager on sports for years to come.