Polymarket volume falls for second month despite industry growth

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The Backstory

From breakout growth to a sharper test

Polymarket’s latest monthly decline marks a shift from the growth story that carried prediction markets through much of the past year. The platform’s international trading volume fell to just under US$7.1 billion in May from more than US$9 billion in April, according to Dune Analytics data cited in the current report. That followed a March peak of US$10.5 billion and came even as the broader category continued to expand.

The slowdown is notable because Polymarket had been one of the clearest beneficiaries of rising retail interest in event contracts. Its trading activity surged more than 850% between August and March, helped by major sports, political and financial markets that turned prediction platforms into a real-time sentiment tool for retail traders. But the recent fall suggests the sector’s growth is becoming less evenly distributed. Demand is still rising, but volume is increasingly moving toward rivals with fewer operational interruptions and deeper access to regulated markets.

That backdrop makes the current report less a one-month data point than a test of Polymarket’s ability to convert popularity into durable market share. The company’s international site remains large, and its US platform grew in May. But the gap with Kalshi has widened, raising questions about whether technology, regulation and product execution are now more decisive than early brand recognition.

April’s decline broke a long winning streak

The current drop follows an earlier reversal in April, when Polymarket recorded its first monthly decline in trading volume since August. At the time, combined activity across its offshore exchange and US app fell about 9% to US$10.3 billion. Kalshi, by contrast, rose 13% to US$14.8 billion during the same period.

That April decline mattered because it ended a period in which Polymarket’s momentum appeared self-reinforcing. Liquidity attracted traders, traders created more liquid markets and high-profile events gave the platform recurring reasons for users to return. Sports were a major driver, particularly the NFL season and March Madness college basketball tournament, which helped push Polymarket to its March record.

But the infrastructure behind that growth was under strain. The company attributed part of the April slowdown to a delayed upgrade intended to improve transaction speeds and reduce technical failures. Founder Shayne Coplan also acknowledged internal growing pains, while engineering leadership pointed to user frustration over outages and failed transactions. Those problems are now central to understanding May’s decline. Prediction markets depend on speed and confidence. If users believe a platform may fail during high-volume moments, they have an incentive to move capital elsewhere.

Kalshi’s rise changed the competitive balance

Polymarket’s pressure has been amplified by Kalshi’s rapid expansion. The two companies previously set a combined record when Kalshi and Polymarket reached US$10 billion in November trading volume, a milestone that underscored how quickly prediction markets were becoming a mainstream retail trading category. At that point, both companies were growing, with Kalshi at US$5.8 billion for the month and Polymarket above US$3.7 billion.

Since then, the balance has tilted further toward Kalshi. In a later report, Kalshi overtook Polymarket in global trading volume, ending a period in which Polymarket had been the dominant name in the sector. Kalshi also pulled ahead in valuation, reaching US$22 billion after a fundraising round, compared with Polymarket’s US$15 billion valuation following investment from Intercontinental Exchange.

The reasons go beyond headline numbers. Kalshi has operated in the US since 2020, giving it a longer runway in a large regulated market. Polymarket was blocked from the US between 2022 and 2025 after the Commodity Futures Trading Commission accused it of running an unlicensed operation. Although it has since returned, its US platform remains in beta and has produced limited trading activity relative to its international business.

That regulatory history has had commercial consequences. Kalshi has had more time to build US relationships, products and user behavior, while Polymarket has had to restart in a market where its rival was already entrenched. The current report shows Polymarket’s US site growing to US$1.77 billion in May from US$1.26 billion in April. That is progress, but it is not yet enough to offset weakness overseas or close the broader gap.

Sports fueled adoption and scrutiny

Sports contracts have been one of the biggest engines of prediction-market growth, blurring the line between financial event trading and sports wagering. Kalshi’s February activity showed the scale of that shift, with men’s college basketball generating US$2.3 billion in wagers, ahead of NFL and NBA markets. That helped demonstrate why sports calendars can drive prediction-market volume as effectively as elections or economic data.

The same growth has brought institutional resistance. The NCAA has objected to the use of its trademarks and has reminded athletes, coaches and athletics staff that they are barred from trading on platforms such as Kalshi and Polymarket. Those rules mirror restrictions on traditional sports betting, reflecting concerns about integrity, insider information and pressure on college athletes.

For Polymarket, sports are both an opportunity and a risk. The company became the official prediction market of Major League Baseball in March, an important signal as it tries to regain footing in the US. The current report also notes a partnership with OneFootball, adding prediction markets across the media platform’s digital products. Such integrations could widen distribution and give Polymarket new event inventory tied to global sports audiences.

But sports-related growth also draws scrutiny from regulators, leagues and governing bodies. The more prediction markets resemble betting to consumers, the more likely they are to face questions from gambling authorities and sports organizations. That tension is likely to shape how platforms market products, verify outcomes and police participation by restricted groups.

Regulation remains a global constraint

International access has been another source of uncertainty. In India, both major operators have faced questions about whether their platforms are available despite local restrictions. A recent report found that Kalshi and Polymarket continued to operate in India despite a government warning that users were accessing illegal and blocked prediction-market and online-betting platforms.

India’s Ministry of Electronics and Information Technology said internet service providers were expected to block access and warned virtual private network providers against enabling users to bypass restrictions. The warning came ahead of the Promotion and Regulation of Online Gaming Act, which took effect May 1. Polymarket said it maintains geoblocking measures where services are not permitted and continues to update them. Kalshi said it had been in contact with Indian authorities and would comply with government requests.

Such disputes matter because Polymarket’s international business has been central to its scale. If large markets tighten enforcement or require more aggressive blocking, offshore volume could become less reliable. That makes the US relaunch more important, but also raises the standard for compliance and operational resilience. A company that is trying to satisfy regulators cannot afford repeated technical failures or ambiguity over market access.

The stakes now are execution and trust

The current figures show a company still large enough to shape the sector but no longer insulated by first-mover momentum. Polymarket’s May decline came as Kalshi reported US$17.9 billion in trading volume, while Polymarket’s international user count also fell from more than 780,000 in March to fewer than 650,000 in May. Those are not signs of a category retreat. They are signs of share shifting.

Polymarket has pointed to spring maintenance work, technical upgrades and the transition to its new Polymarket USD token as factors behind the slowdown. It also reported a stronger start to June, with US$1.9 billion in volume in the first week, its best weekly result since late April. That suggests the decline may not be linear. But the platform now has less room for operational missteps, particularly as users compare execution quality across competing venues.

The broader industry remains in expansion mode. Prediction markets are attracting capital, media partnerships and a growing user base that treats event contracts as both entertainment and information. For Polymarket, the challenge is to prove it can scale that demand without ceding liquidity to Kalshi. The next phase will turn on whether it can stabilize its international platform, accelerate its US rollout and maintain regulatory credibility in markets where the boundary between trading and betting remains contested.