Kalshi and Polymarket Intensify Destructive Competition
Sources reveal that prediction market platforms Kalshi and Polymarket are undermining each other’s competition through lobbying regulators, obstructing each other's trades, and influencing public opinion.
The two platforms are fiercely competing for market share and legal status in a regulatory gray area.
In the capital market, competitive resources are concentrated on lobbying and public relations, delaying regulatory clarity in the overall prediction market ecosystem due to internal strife, benefiting leading platforms while putting pressure on smaller participants.
Source: Public Information
ABAB AI Insight
Kalshi and Polymarket have both seen rapid growth in events like the 2024 U.S. elections, and this mutual destruction continues the trend of regulatory arbitrage and intensified competition as the U.S. prediction market moves from the fringe to the mainstream.
In terms of capital, both platforms are mobilizing resources for lobbying and influence campaigns, shifting funds from product development to the regulatory battlefield, motivated by the desire to secure first-mover legal advantages and user bases, strategically achieving relative leads by undermining each other's trades and public opinion.
Similar to the early regulatory lobbying battles between cryptocurrency exchanges, this round of prediction markets is in an intense positioning phase just before regulatory implementation.
Essentially, this is a concentration of capital: fierce internal strife accelerates industry reshuffling, with the mechanism being that regulatory uncertainty amplifies lobbying returns, concentrating resources on platforms with greater political and capital strength, ultimately pushing a few leading players to dominate the compliant prediction market landscape.
ABAB News · Law of Cognition
- The larger the regulatory gray area, the fiercer the internal strife among platforms.
- The costs of lobbying and destruction are ultimately borne by users and innovation.
- The outcome of prediction markets is determined by Washington rather than trading volume.