Key Takeaways
- Research involving more than 15,000 Americans reveals 81% consider purchasing contracts on sports outcomes through prediction platforms to be gambling
- Just 29% have confidence in the CFTC’s capacity to oversee sports event contracts, while 49% show minimal trust in prediction markets’ insider trading prevention measures
- An overwhelming 78% say prediction market companies should be subject to identical state taxation and fee structures as traditional sportsbooks
- Multiple states have initiated legal action against prediction market companies, with Nevada successfully blocking Kalshi and Coinbase operations
- Market growth continues despite legal challenges, with Kalshi reportedly processing over $800 million in transactions during NCAA Tournament’s opening weekend as DraftKings, FanDuel, and Fanatics join the sector
Recent research demonstrates that an overwhelming proportion of Americans classify sports-related prediction market contracts as gambling rather than legitimate investment vehicles. Morning Consult administered the nationwide poll, collecting responses from over 15,000 participants between March 17 and March 22.
The survey received funding from Gambling is Not Investing, an advocacy group dedicated to blocking federally regulated exchanges from providing sports-related contracts. According to the findings, 81% of participants identified the purchase of contracts tied to sporting event results as gambling activity.
Mick Mulvaney, who serves as Executive Director of Gambling is Not Investing and previously held the position of acting White House chief of staff, characterized the findings as validation of mounting public unease. He contends that prediction market operators are essentially repackaging sports wagering products as financial instruments.
Merely 29% of survey participants expressed belief that the Commodity Futures Trading Commission possesses adequate capability to regulate contracts involving sports events. The CFTC functions as the federal regulatory body with jurisdiction over prediction markets.
CFTC chair Mike Selig, who received his nomination from President Trump and Senate confirmation this past December, has emerged as an outspoken advocate for prediction markets providing sports-connected contracts. This position has generated pushback from state-level regulators and established gambling industry organizations.
Skepticism Surrounds Prediction Platform Safeguards
The research discovered that 73% of participants believe terminology such as “event contracts,” “swaps,” or “futures” masks the genuine financial exposure facing traders. More than half indicated that purchasing sports events through prediction platforms presents equivalent risk to placing wagers at regulated sportsbooks.
Only 34% demonstrated confidence that prediction market platforms deliver consumer protections matching those of licensed sportsbooks. Nearly half of respondents, 49%, reported having limited or zero confidence in these platforms’ capacity to combat insider trading.
A substantial majority, 81%, indicated prediction markets should comply with state sports betting regulations, encompassing age verification requirements and responsible gambling protocols. Prediction markets presently permit participation by adults aged 18 and older, whereas most states mandate bettors reach age 21.
Regarding taxation, 78% concurred that prediction market operators should remit equivalent state taxes and fees as traditional sportsbooks. Throughout most states, sportsbooks pay taxes calculated on gross revenue, while prediction markets collect commissions from transactions between platform participants.
Detractors contend that prediction markets’ reliance on market makers to supply liquidity renders them operationally indistinguishable from conventional sportsbooks.
Legal Actions and Legislative Proposals Gain Momentum
Numerous states have pursued litigation against prediction market operators. Nevada has secured judicial decisions preventing Kalshi and Coinbase from marketing contracts connected to sports, entertainment, and political events.
Massachusetts similarly obtained a temporary restraining order against Kalshi, barring the platform from marketing sports event contracts within state boundaries.
In Congress, bipartisan legislative proposals have emerged to restrict prediction market activities. U.S. Senators John Curtis and Adam Schiff have jointly sponsored legislation that would ban prediction markets from offering products resembling sports betting or casino-style gaming.
Curtis emphasized the legislation aims to honor state sovereignty, safeguard families, and exclude speculative financial instruments from inappropriate contexts.
Despite mounting opposition, prediction market platforms continue expanding. Recent reports from late last week suggested Kalshi facilitated more than $800 million in trading volume exclusively during the NCAA Tournament’s opening weekend.
DraftKings, FanDuel, and Fanatics have each launched prediction market operations. These platforms enable them to present sports contracts in populous states including California, Georgia, and Texas, where sports betting legalization has not occurred.
DraftKings CEO Jason Robins described prediction markets as “a massive incremental opportunity” during the company’s latest quarterly earnings discussion. He projected the company aims to generate hundreds of millions in yearly revenue from its predictions offering within upcoming years.
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