The U.S. prediction market landscape shifted in January as Kalshi reported $9.1 billion in trading volume, overtaking Polymarket's $7.5 billion for the first time. The combined monthly figure reached $13.5 billion. Now, those numbers face a direct challenge.
Allegations of $1.7 Billion Data Padding
Polymarket team member Shampoo fired back while responding to Paradigm's prediction market monitoring tool. "They are completely lying, just like when they accused us of double-counting volume," he wrote. He advised checking the /api endpoint via browser Network tab: "They used a vague 'Esports' category to pad their numbers by $1.7 billion. The correct total from all subcategories is roughly $63 million—less than 10% of our Esports volume." He also flagged that Counter-Strike markets were double-counted under both "CS:GO" and "CS2."
Data shows 91% of Kalshi's volume came from sports and political contracts, drawing institutional money hesitant to use on-chain wallets. This compliance channel is siphoning on-chain liquidity, but concerns about wash trading and volume authenticity persist in a market with few compliant counterparties.
Valuation and Regulatory Risks
Reports peg Kalshi's private valuation at $11 billion, betting on its ability to navigate regulators and dominate the U.S. market. Yet any crack in trust could erase that premium. Massachusetts and Nevada have recently classified sports contracts as illegal gambling, forcing platforms to deploy geofencing. The next milestones: monthly volume reports, court rulings in various states, and how Super Bowl funds split between the two platforms will define the near-term trajectory.