Alex Mercer: If you’ve ever wanted to bet on a game, a movie’s box office, or an election outcome, but you were told it was illegal in your state, I have some news for you. 2026 is officially the year the doors have been kicked wide open. There is a specific group of apps using what people are calling a "Federal Loophole," though it’s actually just a very smart regulatory shift. Instead of placing traditional bets, you’re trading "event contracts." It’s legal, it’s regulated, and it’s finally open to almost everyone in the U.S. and beyond. But here’s the catch: not all apps are created equal. If you pick the wrong one, you’re leaving money on the table before you even make your first trade.

I’m David Price, the Professor here at Prediction Market HQ. My job is to peel back the layers of these markets and show you the mechanics of how they actually work. Joining me today to give us the "boots on the ground" perspective is our lead analyst and veteran trader, Alex Mercer. Alex runs the numbers and finds the edge where the rest of us just see noise.

Marcus Webb: Good to be here, David. And look, let's be blunt right out of the gate. The landscape in 2026 is unrecognizable compared to a few years ago. We’ve moved past the "Wild West" phase. Now, it’s a platform war. You have the giants of sports betting trying to act like financial exchanges, and you have financial exchanges trying to make their apps as addictive as Instagram. As a trader, I don't care about the branding. I care about three things: liquidity, fees, and what my money is doing while I’m waiting for a contract to settle. If you’re just clicking buttons because the interface looks pretty, you’re the "liquidity" for guys like me. We’re going to make sure the listeners today are on the right side of that trade.

Alex Mercer: Exactly. We’ve titled this episode "The Platform Playbook" because choosing your platform is your first strategic move. Let’s start with the one everyone recognizes first: DraftKings Predictions. Now, if you’ve ever opened a sportsbook app, you already know how to use this. It’s what I call the "Easy Button." DraftKings has taken their massive infrastructure and basically reskinned it for prediction markets. They use "American Odds"—you know, the -110 or +250 format. It feels familiar, it’s fast, and you can fund it with Apple Pay in about ten seconds. For a lot of people in states that were previously restricted, this is their first taste of legal event trading.

Marcus Webb: And that familiarity is exactly how they get you, David. DraftKings is great for the casual user who wants to put twenty bucks on an awards show or a simple sports outcome and doesn't want to learn a new language. But from a pro's perspective, DraftKings is the "Convenience Store" of prediction markets. You’re paying a massive "convenience tax." When you look at the spread—the difference between the buy and sell price—it’s often huge. Plus, they charge roughly a $2.00 fee for every $50 trade. That’s about a 4% hit on both sides. In the trading world, 4% is an eternity. If you’re trying to build a long-term bankroll, DraftKings is a tough place to do it because the house edge is baked into those fees and wide spreads. Also, your money just sits there. It doesn’t earn a dime of interest while you’re waiting for the market to resolve. It’s a "park and pray" model.

Alex Mercer: That’s a fair critique. It’s the entry drug. It’s for the person who wants the "Vegas experience" on their phone without the legal headache. But if you’re looking to move from "betting" to "trading," you eventually find your way to Kalshi. Kalshi feels different. It doesn’t look like a sportsbook; it looks like Robinhood. It’s clean, it’s modern, and it’s 100% U.S. regulated. They don’t use those American odds we just mentioned. Instead, they use "Probability Pricing." Everything is priced between 1 cent and 99 cents. If a contract is trading at 65 cents, the market thinks there’s a 65% chance of that event happening. It’s intuitive once you get the hang of it.

Marcus Webb: Kalshi is where the "real" market starts to take shape. Because you’re trading against other people—not against a "house" or a bookie—the pricing is much fairer. You don't have that massive 4% vig. But the real reason I tell my subscribers to look at Kalshi in 2026 isn't just the low fees—it's the "Interest Edge." This is a game-changer. Kalshi pays roughly 3.5% to 4% APY on your uninvested cash. But here’s the kicker: they also pay that interest on your *open positions*. 

Think about that. If you put $1,000 into a market about the Federal Reserve's next move, and that market doesn't settle for two months, that $1,000 is still earning interest for you while it’s tied up in the trade. In the old world of gambling, that money was "dead." In the new world of prediction markets, your collateral is still working. It turns the whole experience from a "gamble" into a "yield-bearing investment with an event-driven upside." That’s a massive psychological and financial shift.

Alex Mercer: It really changes the math of the "long-shot" play. If you're holding a contract for six months, the interest earned can actually offset some of your risk. Now, we can't talk about this space without mentioning the 800-pound gorilla: Polymarket. If Kalshi is the regulated U.S. stock market, Polymarket is the global bazaar. It’s fast, it’s crypto-powered, and it covers the stuff that no one else touches—the "weird" markets, the global news, the niche tech breakthroughs. Because it’s decentralized, it has the deepest liquidity in the world. When the world wants to know what's going to happen, they check the Polymarket price.

Marcus Webb: Polymarket is the gold standard for volume, but it comes with a "complexity wall." Since it’s built on the blockchain, you’re dealing with USDC—digital dollars. For a lot of people, that’s a bridge too far. You have to understand wallets, gas fees, and the friction of moving money in and out of the crypto ecosystem. And for U.S. users specifically, there’s still a lot of waitlist friction for their new regulated wing. 

But if you can get past that? It’s a playground. There are often 0% trading fees. Zero. That means you can move in and out of positions for pennies. If you’re a high-frequency trader or someone who likes to "swing trade" the news—buying a contract when a rumor hits and selling it ten minutes later when the news is confirmed—Polymarket is the only place to do it. Just don’t expect to earn interest on your balance there. It’s a pure "liquidity and volume" play.

Alex Mercer: So we have the "Easy Button" with DraftKings, the "Modern Exchange" with Kalshi, and the "Global Giant" with Polymarket. That leads us to the fourth pillar, which is for the person who wants to take this very, very seriously: Interactive Brokers and their ForecastEx platform. This isn't an app you download to have fun on a Saturday night. This is a professional financial terminal. It’s dry, it’s data-heavy, and it can be a bit intimidating for a beginner. But for the institutional-minded trader, it’s the top of the mountain.

Marcus Webb: ForecastEx is where you go when you want to stop playing and start operating like a hedge fund. They offer the highest interest rate in the business—currently around 4.83% APY, directly linked to the Fed funds rate. Like Kalshi, they pay this on your collateral. If you’re trading with significant size—let’s say five or six figures—that interest rate isn't just a "nice to have," it’s a core part of your P&L. 

The interface is "finance-first," meaning you’re going to see order books, depth charts, and technical data. It’s not "gamified." There are no confetti pops when you win a trade. But you get institutional-grade security. You’re trading on the same platform people use to buy Apple stock or gold futures. For the high-stakes trader, the peace of mind and the 4.8% yield make it the clear winner.

Alex Mercer: I want to circle back to that "Interest Edge" for a moment, Alex. You mentioned it shifts the mindset from gambling to investing. Can you expand on why that’s the defining trend of 2026? Why does a 4% interest rate matter so much to a casual listener?

Marcus Webb: It’s about the "Cost of Opportunity." In 2022 or 2023, if you bet $100 on a candidate to win an election six months away, that $100 was gone. You couldn't use it, and it wasn't growing. If you lost the bet, you lost $100. If you won, you got your profit, but you "lost" the 5% interest you could have made in a savings account. 

In 2026, on platforms like Kalshi or ForecastEx, that "hidden cost" is gone. You’re essentially putting your money in a high-yield savings account that *also* happens to have a side-bet attached to it. If you’re right about the market, you win the trade AND the interest. If you’re wrong about the market, the interest you earned actually softens the blow of the loss. It makes the math of prediction markets much more attractive than traditional sports betting, where the money just sits in the "house's" pocket until the game is over. It’s the single biggest reason why we’re seeing billions of dollars migrate from offshore sportsbooks into these regulated exchanges.

Alex Mercer: It’s the "financialization" of everything. We’re seeing the line between your brokerage account and your "entertainment" account completely disappear. Now, before we wrap up, let’s do a quick "Lightning Round" to help the listeners decide which app to download today. Alex, I’ll give you the persona, you give me the platform.

First up: The person who has never traded a stock in their life, loves football, and just wants to try a $10 "bet" on who will win the next big election market.

Marcus Webb: DraftKings Predictions. Don't overthink it. You’ll be signed up in two minutes, the interface is familiar, and you can use the same balance you use for your Sunday NFL parlay. You pay a bit more in fees, but for ten bucks, it doesn't matter.

Alex Mercer: Okay, next: The "Information Junkie." Someone who follows the news, watches the Fed meetings, and wants to trade on things like the weather or the Oscars, but wants to keep it in U.S. dollars.

Marcus Webb: Kalshi. It’s the best all-around experience for the modern trader. You get the interest on your cash, the markets are incredibly diverse, and the probability pricing actually makes you a smarter thinker.

Alex Mercer: Third: The "Global Citizen." Someone living in London or Tokyo who wants to trade on the biggest, most liquid markets in the world and doesn't mind a little crypto complexity.

Marcus Webb: Polymarket. It’s the undisputed king of global liquidity. If there’s a major world event happening, the "true" price is almost always on Polymarket.

Alex Mercer: And finally: The "High-Stakes Professional." Someone moving $50,000 or more, who wants maximum security and the highest possible interest rate on their capital.

Marcus Webb: ForecastEx via Interactive Brokers. It’s the "adult in the room." You get that 4.8% APY and the peace of mind that comes with a multi-billion dollar brokerage.

Alex Mercer: That’s the playbook. The 2026 landscape is all about choice. You’re no longer stuck with a shady offshore site or a limited local bookie. You have the "Easy Button," the "Stock Market for Everything," the "Global Giant," and the "Professional Terminal." Your job as a participant in these markets is to match your goals to the right platform. 

If you’re just starting out, don't feel like you have to jump into the deep end with crypto or professional terminals. Start where you’re comfortable, but always keep an eye on those fees and that interest rate. As Alex says, don't let your money be "dead" while you’re waiting for the world to happen.

Marcus Webb: Precisely. The market is always moving, David. The question is whether your money is moving with it.

Alex Mercer: Well said. That’s our time for today. Remember, the opinions expressed here are for informational purposes only. Prediction markets involve risk, and you should always trade responsibly. If you have questions or want to see the charts we discussed today, head over to our website or shoot us an email at feedback@predictionmarketshq.com. I’m David Price, and this has been Prediction Markets 101. We’ll see you at the next closing bell.