Citizens warns Kalshi, Polymarket are shifting Super Bowl betting away from sportsbooks

Citizens warns of shifting wagering flows into prediction markets

Prediction markets operated by platforms such as Kalshi and Polymarket are changing how Americans wager ahead of the Super Bowl, Citizens analyst Jordan Bender says, and are drawing volumes that traditionally flow to regulated sportsbooks. Bender, a senior equity analyst at Citizens, says prediction markets are "taking a bite out of" traditional Super Bowl handle as today's Seattle vs. New England matchup at Levi's Stadium in Santa Clara is expected to drive record trading volumes. The shift opens event contracts to millions of Americans in states where sportsbook apps remain illegal and stretches the reach of federally regulated exchanges beyond their original niche.

Rise of Kalshi, Polymarket reshapes Super Bowl betting landscape

Data show Kalshi sees nearly $10 billion in contracts traded in January, about $8.5 billion tied to sports, and traders on Kalshi and Polymarket have swapped roughly $800 million in Super Bowl contracts so far, the American Gaming Association says. That compares with an expected $1.8 billion wagered through traditional regulated sportsbooks, and H2 Gambling Capital forecasts pre-prediction-market wagers rise about 9% to $1.78 billion. H2 expects prediction markets to attract roughly $630 million and to account for about 80% of year‑over‑year growth in Super Bowl betting, highlighting rapid adoption of event contracts as a complementary — and in some cases competing — channel.

Polymarket secures Commodity Futures Trading Commission approval to relaunch in the U.S. and rolls out an app while professional bettors, including Rufus Peabody, report intensive adoption among sharp players. The expansion is prompting legal fights with federal and local gaming regulators as contracts span sports, elections and geopolitics, with sports the fastest‑growing segment. Citizens frames this as a structural change in wagering flows that could persist beyond marquee events unless legacy operators adapt.

Regulatory and market implications

Regulators and courts are increasingly central to the market’s path, as federally regulated exchanges and state gambling authorities clash over jurisdiction, permitted contract types and consumer protections. The outcome of these disputes will shape whether prediction markets become a permanent parallel ecosystem or face stricter limits.

Operator strategies and next steps

Industry watchers say legacy sportsbook operators need new products, partnerships and regulatory clarity to compete for handle and engagement. Citizens and other analysts say investors and operators will monitor volumes, user metrics and regulatory developments as prediction markets continue to reshape where and how Americans place event bets.