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Prediction markets got real tools this week. Leverate dropped a white-label platform that lets brokers offer event contracts without building anything in-house, promising a 15-25% revenue bump through trading fees and market creation fees.
Devexperts jumped in too, rolling out infrastructure for CFD brokers who want to add event contracts to their existing platforms. The timing’s pretty interesting – a recent KPMG report basically told brokers they should treat prediction markets as core business strategies, not side projects. Both companies are betting brokers will bite on the revenue potential, especially with volumes climbing fast across the sector.
Kalshi keeps expanding aggressively.
The exchange partnered with Tradeweb Markets to push its event contracts into mainstream distribution channels. DriveWealth plans to add these contracts to its brokerage services too, which could open up serious retail access. Kalshi hired Andy Ross from Standard Chartered and CurveGlobal to lead the institutional push – guy knows derivatives inside and out. The goal’s clear: more liquidity, more expertise, more legitimacy.
Numbers back up the growth story. Kalshi’s notional volume hit $8.1 billion by February 22, with daily trades averaging around $370 million. They’re projecting $10.4 billion in monthly volume, which is wild growth for a relatively new market. But the CFTC’s watching closely now.
Regulators dropped a warning about insider trading and fraud in prediction markets. The Commodity Futures Trading Commission called out specific cases where KalshiEX users traded event contracts based on privileged information – people got fined. The message was pretty direct: we’re watching, and we’ll crack down on violations.
Product classification remains murky though. Some event contracts look suspiciously like banned binary options, which creates jurisdictional headaches for brokers. The regulatory environment isn’t hostile exactly, but oversight’s definitely tightening. Brokers need to think hard about compliance costs and legal risks before diving in. More on this topic: Kalshi Boots California Candidate and MrBeast.
Leverate’s white-label solution caught attention from brokers looking to diversify fast. The platform promises easy integration – no development team needed, just plug and play. Revenue projections of 15-25% increases sound good on paper, but brokers are weighing that against potential regulatory blowback. Some firms are moving cautiously, waiting to see how the CFTC’s enforcement actions play out.
The DriveWealth partnership, announced February 15, aims to integrate event contracts into DriveWealth’s API-first architecture. That’s significant because DriveWealth powers trading for tons of retail platforms. If the integration works smoothly, it could expose millions of retail investors to prediction markets for the first time. But there’s risk too – retail investors might not understand these products fully.
Andy Ross brings serious credibility to Kalshi’s institutional efforts. His background at Standard Chartered and CurveGlobal gives him deep connections in traditional finance. Kalshi’s betting that institutional money will follow if they can build proper infrastructure and maintain regulatory compliance. The hire signals they’re thinking long-term, not just chasing retail hype.
Tradeweb’s involvement adds another layer of legitimacy. The fixed-income trading platform has established relationships with major banks and asset managers. By leveraging Tradeweb’s distribution network, Kalshi can reach institutional clients without building those relationships from scratch. It’s a smart move that could accelerate adoption among professional traders.
Tarek Mansour, Kalshi’s co-founder, acknowledged the CFTC advisory on February 25. He emphasized transparency and ethical trading practices, which sounds like damage control but probably reflects genuine concern about regulatory risk. Mansour knows that one major enforcement action could kill momentum in this space. For more details, see Mantle and Aave Hit 0 Million.
The CFTC’s warning wasn’t subtle. They’re clearly concerned about market manipulation and insider trading in prediction markets. For brokers, that means compliance programs need to be bulletproof. Any firm offering these products needs surveillance systems, training programs, and clear policies about information sharing.
Volume growth continues despite regulatory uncertainty. Daily trading on Kalshi often exceeds $370 million now, with some days hitting much higher numbers around major events. The February 22 data showing $8.1 billion in notional volume represents massive growth from just months earlier.
Brokers face a tough choice. The revenue potential looks real, but regulatory risks are climbing. Leverate and Devexperts are betting enough brokers will take the plunge to make their platforms profitable. The next few months will show whether prediction markets become mainstream or remain a niche product for specialized firms.
The CFTC’s enforcement actions targeted specific patterns of abuse. Agency officials identified cases where traders used non-public information about corporate earnings, government announcements, and political developments to profit from event contracts. These violations mirror traditional securities fraud but occur in a less regulated space.
Market makers are also entering the prediction space aggressively. Jump Trading and DRW have deployed algorithmic strategies across multiple prediction platforms, bringing institutional-grade liquidity to previously thin markets. Their participation signals growing confidence in the sector’s long-term viability despite regulatory uncertainties.
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