Prediction Markets 101

The popularity of prediction markets continues to rise in the US, from popular apps like Kalshi and Polymarket to more sports-specific prediction markets from reputable brands like FanDuel Predicts and Fanatics Markets.

If you're new to prediction markets and want a quick overview — especially if you're interested in making trades on sporting events and futures — you've come to the right place. On this page, we'll give you a brief overview of what prediction markets are, how to use them, and how to make predictions on sports and more for a chance to win real cash prizes.

To understand prediction markets, it helps to think in terms of contracts rather than bets. Each market revolves around a clearly defined question with two possible outcomes: yes or no. Each outcome is represented by a contract priced between $0 and $1. That price reflects the market’s current belief about probability. A contract trading at $0.30 implies a 30% chance of occurring, while one at $0.80 implies an 80% likelihood. If you believe the market is underestimating an outcome, you can buy shares. If you think it's overvalued, you can sell it.

When the event concludes, the contract settles at either $1 if you win, or $0 if your pick loses. Your profit comes from the difference between what you paid and the final value, or from trading out of your position before resolution at a better price. This is where prediction markets diverge sharply from many betting apps: If you buy a contract at $0.40 and it rises to $0.70 as sentiment shifts, you can sell early and lock in profit before the final buzzer. This simulates the experience of cashing out early on a betting app, which you don't always have the option to do.

Using Strategy on Prediction Markets

This flexibility opens up a range of strategies. Some traders focus on long-term positions, similar to futures bets in sports betting. Others specialize in short-term swings, reacting to breaking news, injuries, or momentum shifts. The ability to trade in and out makes timing just as important as being right.

Another major distinction is pricing. In sportsbooks, odds are carefully engineered to balance action and protect the house. In prediction markets, pricing is entirely market-driven. It reflects the aggregated beliefs of all participants, from casual users to highly informed traders. This leads to both opportunities and risks: On one hand, the absence of a built-in house edge means you're not automatically fighting against a margin. On the other hand, markets can be inefficient — especially in less popular categories — creating both value and volatility.

The Difference Between Prediction Markets

It's also worth noting that not all prediction markets operate the same way. Some are fully regulated exchanges overseen by US authorities, while others operate in decentralized or offshore environments. Differences can include fee structures, liquidity, available markets, and user protections. For most users, regulated platforms offer a more stable and transparent experience.

At their core, prediction markets reward information, timing, and discipline. The more accurately you can assess probability and identify when the market is wrong, the better your chances of making money.

While sports are a natural entry point, prediction markets extend far beyond the field. In fact, non-sports categories often make up the majority of available markets, and they're part of what makes these platforms so unique.

Users can trade on political outcomes, economic indicators, entertainment awards, and even weather events. Markets might center on election results, interest rate decisions, box office performance, or whether a major product release gets delayed. If an event has a clear, measurable outcome, it can usually be turned into a tradable contract.

Common Non-Sports Categories on Prediction Markets

• Politics
• Economy & finance
• Entertainment & awards
• Weather & climate
• Business & corporate events
• Technology & product releases
• Public health & science

These markets can be appealing because they draw on different types of knowledge. Political junkies, financial analysts, and pop culture enthusiasts all have opportunities to leverage their expertise. In some cases, these markets are more difficult to parse than than sports, creating more room for sharp traders to find value.

However, non-sports markets are also the most controversial. Because they often involve real-world events with broader societal impact, concerns about insider information and ethical boundaries come into play. For example, markets tied to political decisions or economic policy can raise questions about who has access to privileged information and whether that creates an uneven playing field.

There are also markets that feel inherently uncomfortable or even dystopian, such as those speculating on geopolitical instability or leadership changes. While they may provide insight into public sentiment, they blur the line between forecasting and profiting from serious, even catastrophic real-world events.

For that reason, many users approach non-sports markets with a mix of curiosity and caution. They expand the scope of what prediction markets can do, but they also highlight the ethical complexities of turning real-world outcomes into financial instruments.