Glossary.
Every term you'll encounter in prediction markets, defined plainly. Built to be cited.
- AEOOperator
- Answer-engine optimisation. Structuring content so AI engines (ChatGPT, Perplexity, Gemini) cite the source rather than just paraphrase it.
- AffiliateOperator
- A media or marketing partner that drives users to a regulated venue in exchange for revenue share, CPA, or hybrid commission.
- ArbitrageTrading
- Simultaneously buying and selling related contracts to capture a price discrepancy with limited risk.
- Binary contractMarket structure
- A contract that resolves to one of two values — $1 if the event occurs, $0 if it does not.
- Cease-and-desistRegulation
- A formal demand from a regulator that an operator stop a specific activity. Multiple state gambling regulators have issued these to Kalshi over sports event contracts.
- CFTCRegulation
- The US Commodity Futures Trading Commission. The federal regulator of derivatives, including event contracts listed on Designated Contract Markets.
- Designated Contract Market (DCM)Regulation
- A trading venue registered with the CFTC and authorised to list derivatives, including event contracts. Kalshi holds this status; Polymarket does not.
- Event contractMarket structure
- A derivative whose value resolves based on the occurrence of a specified real-world event. The legal category at the centre of the prediction-market regulatory debate.
- ExchangeMarket structure
- A peer-to-peer marketplace that matches buyers and sellers without taking the opposite side of trades. Distinct from a sportsbook, which acts as the counterparty.
- Geo-complianceOperator
- The discipline of ensuring promotions, partner links, and product availability respect every jurisdiction-specific restriction.
- GGRMarket structure
- Gross gaming revenue. For a sportsbook, total wagers minus winnings paid out. The standard headline-revenue figure in regulated gambling reporting.
- HandleMarket structure
- Total amount wagered (or, for an exchange, total notional value traded) over a period. Distinct from revenue.
- Hold rateMarket structure
- A sportsbook's revenue as a percentage of handle. US industry average sits between 7% and 10%.
- KalshiPlatforms
- A CFTC-registered Designated Contract Market headquartered in the US, settling event contracts in USD. The leading regulated US prediction-market venue.
- LiquidityTrading
- The depth of buy and sell orders available in a market. The single largest product constraint in prediction markets today.
- LTVOperator
- Lifetime value. Expected revenue from a customer over their relationship with the platform.
- Maker / takerTrading
- Maker — a trader who provides liquidity by placing a resting order. Taker — a trader who removes liquidity by executing against an existing order. Most exchanges charge takers more.
- Market makerTrading
- A participant that quotes two-sided prices in a market in exchange for fee rebates or for the spread itself. Critical to liquid prediction markets.
- Order bookMarket structure
- The list of outstanding buy and sell orders at each price level for a contract. The mechanism through which an exchange matches trades.
- Responsible gaming (RG)Operator
- Tools and policies (deposit limits, self-exclusion, age verification) designed to prevent and address gambling-related harm.
- SEOOperator
- Search-engine optimisation. The discipline of earning organic search traffic — historically the largest distribution channel for gambling-affiliate businesses.
- SettlementTrading
- The transfer of value following contract resolution. USD on Kalshi; USDC on Polymarket.
- SpreadTrading
- The difference between the highest bid and lowest offer in a market. A proxy for liquidity quality.
- State gambling regulatorRegulation
- A state-level body (e.g. New Jersey DGE, Nevada GCB) responsible for licensing and supervising gambling operators within its jurisdiction.
- Take rateMarket structure
- The fee an exchange charges on a trade, typically 1–4% on prediction-market venues. Equivalent of the sportsbook's hold but structurally different in incidence.
- Tribal compactRegulation
- An agreement between a federally recognised tribe and a US state governing gaming activity. Often confers exclusivity over certain gambling forms.
- VolumeTrading
- Total notional value of contracts traded over a period. Monthly volume across major prediction markets crossed $13bn in December 2025.
- WhaleTrading
- A trader transacting in size large enough to affect market prices. Common in long-tail prediction markets where liquidity is thin.