Every industry has winners and losers. In 2025, the gambling world made it crystal clear who was who.

Prediction markets went absolutely nuclear. Traditional sportsbooks scrambled to keep up. ESPN Bet imploded before its second birthday. And the regulatory landscape shifted in ways nobody fully anticipated.

Here's the definitive breakdown of who won, who lost, and who's still trying to figure out what the hell happened.

The Winners

Kalshi: From Underdog to Juggernaut

The undisputed champion of 2025. Kalshi went from a niche prediction market platform to a legitimate threat to the entire sports betting industry.

The numbers are staggering. Monthly trading volume went from less than $100 million in 2024 to over $13 billion by late 2025. That's not a typo. Thirteen billion dollars a month, flowing through a platform that most people hadn't heard of two years ago.

The funding followed the growth. Kalshi raised $185 million in June at a $2 billion valuation, $300 million in October at $5 billion, and $1 billion in early December at an $11 billion valuation. In six months, the company's value increased fivefold.

What changed? The 2024 election cycle proved that people wanted to bet on more than just sports. When Polymarket captured mainstream attention with political prediction markets, the dam broke. Kalshi positioned itself as the regulated alternative, and investors piled in.

DraftKings and FanDuel: Pivot Masters

Give them credit — when the prediction market threat became obvious, DraftKings and FanDuel didn't sit around whining. They jumped in.

DraftKings launched its prediction market app on December 19 in 38 states, including California, Texas, and Florida. FanDuel followed with FanDuel Predicts in five states, with plans for a national rollout in early 2026.

The message was clear: if you can't beat them, become them. Both companies left the American Gaming Association in November over disagreements about prediction market policy, effectively choosing growth over industry unity.

Whether this pivot succeeds remains to be seen. But at least they're trying to stay relevant.

Fanatics: The Quiet Riser

While everyone focused on DraftKings and FanDuel, Fanatics Sportsbook kept grinding. The company launched prediction markets in 24 states in early December, expanding its footprint beyond traditional sports betting.

Fanatics doesn't get the headlines, but they're building something. The connection to merchandise, memorabilia, and the broader sports ecosystem gives them advantages that pure sportsbook operators don't have.

The Losers

ESPN Bet: Dead on Arrival

Penn Entertainment had lofty ambitions when they launched ESPN Bet in 2023. The goal: 20% market share by 2027.

The reality: less than 3% market share and a complete rebrand to theScore Bet as of December 1, 2025.

ESPN Bet lasted barely two years. The ESPN brand, it turns out, didn't translate to sportsbook loyalty. Customers weren't willing to switch from established platforms just because ESPN told them to. The promotional spending was massive, the customer acquisition was minimal, and the losses were unsustainable.

Penn is now stuck with the pieces of theScore, the Canadian sports media company they acquired as a backup plan. Whether theScore Bet can succeed where ESPN Bet failed is an open question with a pessimistic answer.

The American Gaming Association

The AGA started 2025 as the unified voice of the gaming industry. By November, it had lost two of its biggest members.

DraftKings and FanDuel both quit the trade group over its opposition to sports prediction markets. The AGA had taken a hardline stance against allowing sports event contracts on prediction platforms, arguing it was unregulated sports betting in disguise.

DraftKings and FanDuel disagreed. They saw prediction markets as the future and didn't want to be left behind while regulatory battles played out. So they left.

Without DraftKings and FanDuel, the AGA's influence is diminished. The industry is now fractured between traditional casino operators who want to protect the status quo and tech-forward sportsbooks who want to disrupt it.

Traditional Sportsbook Hold Rates

Sportsbooks had a great year in terms of revenue. The problem? They needed it.

For the first time in the post-PASPA era, at least six months saw a national hold rate of 10% or higher, highlighted by a 12.4% win rate in June. That sounds great until you realize it means bettors were losing more, not that sportsbooks were getting smarter.

The lowest hold of the year — 5.8% in December 2024 — came because NFL money line favorites won at an 81.7% clip (58-13). When that happens, sportsbooks bleed. The elevated hold rates in 2025 were partially a correction, partially variance, and partially books getting more aggressive with lines.

The Wild Cards

State Regulators

Some states embraced change. Others dug in. The regulatory patchwork around prediction markets is a mess, and it's only going to get messier as legal challenges work their way through courts.

Truist Securities analyst Barry Jonas predicts the battle over sports event contracts is headed to the Supreme Court. If that happens, the entire industry could get restructured based on a nine-person decision.

Bettors Themselves

Public sentiment on sports betting has soured. A Pew Research poll in October found that 43% of U.S. adults say legalized sports betting is bad for society — up from 34% in 2022. Another 40% say it's bad for sports specifically.

The scandals didn't help. Terry Rozier's arrest, the Cleveland Guardians pitching scandal, and ongoing integrity concerns have made sports betting a lightning rod for criticism.

Whether this matters depends on who you ask. The money keeps flowing. The bets keep landing. But the political winds are shifting, and that could mean tighter regulations in the years ahead.

The Bottom Line

2025 was a year of upheaval. The prediction market revolution is real, ESPN Bet is dead, and the industry's old guard is scrambling to adapt.

If you're a bettor, none of this changes your day-to-day experience. The apps still work. The lines still move. The losses still hurt.

But behind the scenes, the power structure is shifting. And 2026 is going to be even weirder.