Prediction Market Stocks: The Picks-and-Shovels Play

Prediction market stocks are the companies that build the infrastructure behind prediction market platforms like Kalshi and Polymarket. As we detail in our full review of the Prediction Markets presentation, Luke Lango’s central thesis is that you can profit from the prediction market boom “without placing a single bet” by investing in these infrastructure companies.

The Picks-and-Shovels Approach

During a gold rush, the people who sold picks and shovels profited whether or not any individual miner struck gold. Lango applies the same logic to prediction markets. The category is growing rapidly, with trading volume up 400 percent in recent quarters and estimates suggesting the market could grow from $64 billion today to $1 trillion by 2030. You do not need to predict who will win an election. You need to identify which companies are building the rails that every prediction market trade runs on.

This is a fundamentally different proposition from betting on prediction markets directly. When you bet, you need to be right about a specific outcome. When you invest in the infrastructure, you profit from the growth of the category regardless of who wins any specific event. For more on this approach, see our article on prediction market investing.

Robinhood (HOOD): The Main Pick

Robinhood has partnered with Susquehanna to offer prediction markets to its 27 million users. The key competitive detail is pricing: Robinhood charges a flat $0.01 per contract, compared to Kalshi’s variable fees. For a platform with 27 million users already comfortable trading stocks and crypto, adding prediction markets is a natural extension.

The thesis is straightforward. If prediction markets grow from $64 billion to $1 trillion, and Robinhood captures even a modest share through its 27-million-user base, the revenue impact could be material. The flat-fee structure gives Robinhood a competitive advantage over dedicated prediction market platforms that charge more. For more, see our article on Robinhood prediction markets.

Coinbase (COIN): The Side Bet

Coinbase owns the rails that every Polymarket trade rides on. Polymarket runs on the Polygon network and uses USDC, a stablecoin, for settlement. Coinbase is the primary U.S. exchange for USDC and has deep integration with the broader crypto infrastructure that prediction markets depend on.

Additionally, Coinbase is rolling out prediction markets to its own user base. This means Coinbase is both the infrastructure layer for existing prediction market platforms and a direct competitor entering the space. That dual position means Coinbase benefits from prediction market growth regardless of which specific platform wins. For more, see our article on Polymarket stocks.

The Structural Forces

Lango identifies five structural forces driving prediction market growth. First, regulatory clarity: Kalshi won a landmark court battle against the CFTC in 2024. Second, a better product: prediction markets are more convenient than Vegas, sports betting apps, or local bookies. Third, real-time forecasting: broadcasters and analysts use prediction market odds as a forecasting tool. Fourth, institutional interest: Goldman Sachs is building a prediction market trading desk. Fifth, economic stress parallel: the 1970s Vegas gaming boom mirrors today’s macro environment.

These forces suggest the category is not a fad. The regulatory milestone alone is significant. Before the CFTC ruling, prediction markets operated in a gray area. Now they have a clear legal framework, which enables institutional participation and mainstream adoption. For more on the regulatory landscape, see our article on what is the Kalshi app.

The Market Size

The $64 billion to $1 trillion projection for 2030 is an estimate, not a guarantee. But it is in the range of what serious analysts have projected for the growth of event-based trading and prediction platforms. Even if the actual number comes in at half the projection, that is still a massive growth rate from the current $64 billion base.

The 400 percent volume growth in recent quarters, cited from Pew Research data, reflects the early-stage, rapidly-scaling nature of the category. When a market grows 400 percent in a short period, the infrastructure companies that serve it see disproportionate revenue growth because their costs are largely fixed. For more on the market dynamics, see our article on prediction market investing.

The Investment Approach

Both HOOD and COIN are real, widely-held stocks that you can buy through any brokerage. Lango reveals them for free before the paywall, which gives you a real sense of the investment thesis before spending any money. The analysis Lango provides on both is genuinely useful.

The risks are real. Both companies are exposed to broader market conditions, crypto regulation, and fintech competition. The prediction market opportunity is one component of their businesses, not the whole story. The $1 trillion market projection is an estimate. The “October 13th” date Lango cites for a Goldman Sachs desk launch is unconfirmed. But for investors interested in the prediction market thesis, HOOD and COIN are the most direct ways to gain exposure through established, publicly traded companies. For more on the broader investment landscape, see our article on investment sites for beginners.

This is not financial advice. Always do your own research before investing.