Front Running: Polymarket U.S. Is Ramping Quickly

Welcome to the second edition of Front Running, the prediction markets newsletter from Eilers & Krejcik Gaming.

The following data and insight comes from our new Predictions Markets Intelligence vertical. For subscription options and sample reports, contact Simon Krejcik at skrejcik@ekgamingllc.com.

1. CHART OF THE WEEK: POLYMARKET U.S. RAMPS UP

• The chart above shows Polymarket U.S.’s daily sports Execution Volume (EV) since launch.

• Sports EV, around 99% of Polymarket U.S. EV in the status quo, has spiked in the last week as the operator removed its waiting list and rolled out the exchange for all U.S. users.

• In the six days since, daily average sports EV is up around 28% versus the prior six day period to $22.4mm, with the company posting record sports EV on May 16—the first Saturday on which the app was open to all U.S. users.

• For comparison, Kalshi daily average sports EV during the same six-day period was $134.3mm—roughly 6x higher than Polymarket U.S.—suggesting there is still a long way for Polymarket to go.

• In April, Kalshi accounted for around 85% share of U.S. sports EV. That was down from 88% in March and looks set to tick down further in May, with current trends (through May 17) pointing toward an 83% finish.
  

• Kalshi EV share is declining as operators like Polymarket U.S. and Crypto.com grow faster from smaller bases. Kalshi’s fast-increasing reliance on lower-priced combos is also acting as a mathematical drag on its sports EV share—especially relative to competitors like Polymarket U.S. who do not yet offer combos.
  

• Our Execution Volume metric represents contracts * execution price. It reflects the value transacted at the time of trade and is measured on a one-sided (i.e., yes-taker) basis.
  

2. NUMBER TO KNOW: MASSIVE UPSIDE FOR PM COMBOS

• Kalshi’s combo revenue run rate is $300mm according to DraftKings CFO Alan Ellingson, who was speaking at a MoffettNathanson conference last week.

• Ellingson compared that $300mm number to the $10bn that the OSB sector expects to make from parlays this year, hinting there was plenty of upside to come for combos.

• DraftKings launched combos on its PM platform last week and is uniquely positioned to benefit thanks to its pricing/trading expertise, Ellingson said.

• “Theres a long way for predictions to go,” Ellingson said “I’m optimistic. We think its going to be a fantastic growth story.”

3. QUOTE OF THE WEEK: DRAFTKINGS CO-FOUNDER TAKES AIM AT KALSHI

• DraftKings co-founder Matt Kalish took to Twitter over the weekend to suggest prediction markets are still 2-3 years away from being “remotely close” to the same product quality as online sports betting.

• In a lengthy thread, Kalish named Kalshi specifically and said 99% of rec players would be confused by the product and get “decimated” by market makers.

• Kalish is no longer in an executive role at DraftKings, after stepping down as president in November, but is still on the board. He is currently CEO at creator media platform HardScope.