A simple question: if you wager (or “invest” or “purchase a contract for”) $100 on who will win the NCAA championship next month, is that a sports bet?
If you said yes, you are probably a normal, rational human being. If you said no, you are probably heavily invested in Kalshi or Polymarket.
So-called “prediction markets” bill themselves as the future of truth in America – tools of price discovery, engines of transparency, an “economic function” that will help us understand the world. All of that brought to you by the same apps where users can “purchase” a contract that says there’s a 37% chance the Wizards cover the spread against the Pacers.
The truth is unregulated sports betting is the main attraction on platforms like Kalshi and Polymarket. The overwhelming majority of activity on predictive markets in the U.S. today is sports gambling. Kalshi has put the figure as high as 90%. Illegal sports gambling isn’t a sideshow on these platforms. It’s what’s propelling their eye-popping valuations.
The Commodity Futures Trading Commission’s embrace of these platforms has allowed them to bypass state and tribal regulatory frameworks, offer unregulated online sports gambling all across the country, and skirt hundreds of millions in state sports betting taxes. It is telling that in his defense of prediction markets, CFTC Chair Mike Selig did not mention “sports” once, despite it being the primary use case for prediction markets today.
Congress never gave the CFTC authority to regulate online sports betting, a responsibility that the Supreme Court has affirmed lies with the states. The CFTC was created more than 50 years ago to regulate crop futures and has neither the resources, expertise, nor authority to give operators a blank check to offer online sports betting to anyone and everyone anywhere in the country.
Nearly a dozen states have decided so far not to legalize online sports betting, as is their right. States that have legalized online wagering did so with frameworks in place to protect consumers, set age restrictions, and generate new tax income for community projects. Prediction markets that offer online sports betting don’t comply with any of those voter-approved requirements, and those platforms are even seizing on those age restrictions, which they don’t comply with, to target teenagers and get them hooked on sports betting early.
In South Carolina, the state I previously represented, lawmakers have decided to not yet legalize online sports betting. Prediction markets don’t care, and are actively marketing online sports betting in South Carolina today. I applaud Utah Gov. Spencer Cox for vowing to fight these platforms and the CFTC in court.
The proliferation of predictive market platforms is misleading Americans, particularly our youth, to conflate investing and online sports betting. We are breeding a generation of gamblers in the process.
That is why I am leading a new coalition to pushback on the disinformation that the prediction markets are aggressively pushing in Washington and across the country. Gambling is Not Investing is a new coalition of consumer advocates united in the fight to ensure all forms of online gambling – regardless of what you call it – are appropriately regulated at the state level.
We should stop pretending these platforms are high-minded financial innovations and treat them as what they are: sports betting platforms operating through a regulatory back door. And if they are doing that in states where sports betting is illegal, then those platforms are illegal.
If states and tribes must earn the right to offer legal sports betting through legislation, licensing, and strict consumer protections, then so should everyone else. Underage users and at-risk gamblers shouldn’t be “trading the future” without guardrails. And companies shouldn’t be allowed to evade state and tribal law simply by swapping the word “bet” for “predict.”
The solution isn’t complicated: regulate this activity as sports betting. Enforce age standards. Require responsible gaming tools. Pay appropriate taxes. Respect state and tribal frameworks. Protect consumers. And stop letting a clever label rewrite the rules.
Because when someone is wagering on a point spread, it isn’t a “prediction.” It’s a bet.
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