Key Takeaways
- Jonathan Cohen, AIBM policy expert, argues prediction markets and sports wagering lack sufficient safeguards for vulnerable consumers, particularly young male users
- Nearly 40% of US adults suspect sports outcomes are manipulated, signaling widespread distrust in gambling-related sectors
- Prediction platforms create confusion by resembling investment tools while functioning as gambling venues, particularly when integrated into trading applications
- Recent insider trading scandals involving Polymarket have intensified legislative attention on prediction market oversight
- Proposed reforms include mandatory age restrictions, automatic spending caps for young adults, and evidence-based platform interventions
The American Institute for Boys and Men is advocating for enhanced regulatory frameworks governing prediction markets and sports wagering across America. In a detailed conversation with Gambling Insider, Jonathan Cohen, the organization’s sports betting policy specialist, outlined his concerns about current industry practices.
Cohen joined AIBM this past January, bringing both scholarly expertise and activist credentials. His portfolio includes authoring two comprehensive volumes examining American gambling regulation, along with television appearances on PBS and participation in Brookings Institution discussions focused on prediction market dynamics.
His core thesis is straightforward: regulatory safeguards surrounding sports wagering remain insufficient, while prediction market oversight is virtually nonexistent.
Recent AIBM studies reveal significant public skepticism toward gambling sector integrity. Polling conducted by Deseret News indicates approximately 40% of American adults harbor suspicions that sporting events are subject to manipulation.
According to Cohen, this skepticism mirrors a broader societal trend of declining institutional confidence rather than a phenomenon isolated to gambling. Nevertheless, he emphasized that industry communications emphasizing competitive integrity “simply aren’t connecting” with American consumers.
Emerging Threats in Prediction Market Platforms
Cohen reserves his most pointed critique for prediction market operators such as Polymarket and Kalshi. These platforms, he argues, deliberately obscure distinctions between speculative gambling and legitimate investment activity, especially when integrated into standard brokerage interfaces.
“Users may engage with prediction markets genuinely believing they’re accessing investment opportunities, unaware of the gambling mechanics underlying these platforms,” Cohen explained.
He referenced the recent federal charges against a military service member for allegedly engaging in insider trading on Polymarket regarding Venezuelan leader Nicholas Maduro’s capture. This incident, Cohen suggested, has ended the prediction market industry’s “grace period” with regulators and the public.
Concerns about systematic market manipulation also feature prominently in Cohen’s analysis. He highlighted specific Polymarket contracts, including derivative instruments speculating whether trading volume on the second coming of Jesus Christ would surpass 5%. Such offerings appear deliberately engineered for manipulation, Cohen argued, drawing parallels to fraudulent cryptocurrency schemes.
The prediction market sector has pursued mainstream acceptance through media collaborations and positioning itself as “News 2.0.” Cohen acknowledged limited value in utilizing markets as real-time sentiment gauges, particularly during electoral cycles. However, he suggested these partnerships primarily serve to legitimize and normalize what remains a gambling product.
He challenged the industry’s frequent invocation of “wisdom of crowds” theory. The actual user demographic for prediction markets remains small and disproportionately comprises younger male participants. This hardly constitutes a representative cross-section of society, Cohen noted.
Proposed Regulatory Framework
AIBM is actively formulating comprehensive policy recommendations. These proposals include establishing 21 as the universal minimum age for both prediction market participation and sports betting. The organization endorses automatic spending limitations for users under 25, modeled after measures Flutter Entertainment has deployed across UK and Irish markets.
Cohen advocates for platform-level restrictions targeting loss-chasing patterns and rapid escalation of wager amounts. Platforms already possess sophisticated data analytics capable of detecting these behavioral red flags, he noted, yet face no regulatory obligation to intervene.
He stressed that any forthcoming regulations must derive from empirical consumer behavior data. Currently, prediction market operations remain largely opaque, he said. Publicly available information regarding participant demographics, transaction volumes, and market maker involvement is severely limited.
Cohen dismissed existing voluntary responsible gambling features available through sportsbook applications as fundamentally inadequate. “The solution isn’t improved marketing campaigns,” he stated. “We require fundamental restructuring of the premise that users should enjoy unlimited freedom the instant they install an application.”
Regarding potential legislative action, Cohen predicted Congress would most likely address insider trading regulations specifically tied to prediction markets involving national security considerations. Additionally, pending Supreme Court litigation could significantly alter prediction market legal standing in the immediate future.
Cohen interpreted the recent establishment of a sports betting political action committee as evidence of industry vulnerability. He characterized the development as “revealing weakness as much as projecting strength.”
Multiple state legislatures, including Colorado, Maryland, and Ohio, currently have active legislative proposals targeting stricter sports betting regulations.
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