The 2028 U.S. presidential election is shaping up as a close contest among Vice President JD Vance, California Governor Gavin Newsom, and Secretary of State Marco Rubio, according to two major prediction markets, Polymarket and Kalshi. While Vance remains a slight favorite on the more liquid Polymarket, Rubio’s odds have recently surged, and Newsom’s position has stayed steady. Despite Donald Trump’s ineligibility for a third term, he still holds a 2% chance on both platforms. These markets, which have seen significant trading volumes—nearly $400 million on Polymarket and $18 million on Kalshi—are increasingly viewed as valuable tools for gauging political probabilities in the absence of extensive polling data.

Prediction markets are rapidly expanding but face growing regulatory scrutiny and legal challenges. The Commodity Futures Trading Commission (CFTC) is actively engaging with these markets, aiming to regulate rather than crack down, while major exchanges like CME and Cboe call for clearer rules. States such as Iowa and Utah are pushing back against prediction markets, citing gambling concerns, and Kalshi is involved in ongoing legal battles over state gambling laws. Meanwhile, public opinion shows substantial support for legal but regulated prediction markets, which are also gaining traction in sectors like sports betting and climate event wagering. The SEC and CFTC recently signed a memorandum to harmonize oversight, signaling a coordinated federal approach to managing the evolving landscape of prediction markets and financial innovation.