Key Takeaways
- Event betting platforms such as Kalshi and Polymarket are rapidly growing throughout America, even in jurisdictions that prohibit gambling
- Health advocates caution that treatment programs for gambling addiction haven’t matched the sector’s explosive expansion
- Both Kalshi and Polymarket maintain they offer event derivatives rather than gambling services, putting them under CFTC federal regulation
- More than a dozen legal challenges in various states are contesting this regulatory classification
- Legislation called the Points Act, filed in March, would establish the nation’s first federal funding mechanism for gambling addiction programs
Event Betting Services Reach States With Gambling Prohibitions
Platforms designed for prediction markets, including Kalshi and Polymarket, have experienced rapid expansion throughout America. These services now allow participants to wager on everything from entertainment industry awards ceremonies to international soccer match statistics.
Both companies have actively pursued mainstream recognition. During the NBA Finals, Kalshi launched advertising campaigns, while Polymarket’s branding was prominently displayed on the octagon during a UFC event at the White House recently.
This expansion comes on the heels of the 2018 Supreme Court ruling that struck down the nationwide prohibition on sports wagering. Today, sports betting operates legally in 39 states plus the District of Columbia.
Both Kalshi and Polymarket contend they don’t function as gambling businesses. Instead, they position themselves as providers of event derivatives, which places them under the jurisdiction of the US Commodity Futures Trading Commission at the federal level rather than state gaming regulations.
This legal interpretation has enabled these platforms to function in jurisdictions such as Utah and Hawaii, where gambling activities have traditionally been outlawed.
The current administration has endorsed this regulatory stance. Last month, President Trump emphasized the critical importance of maintaining CFTC exclusive oversight of prediction market operations.
A representative from the CFTC verified that the agency maintains authority over swaps, which includes prediction markets, and stated the commission would protect its jurisdiction against state-level attempts to circumvent federal regulations.
However, legal challenges are mounting. Over a dozen lawsuits have been initiated in different states, with regulators and legislators contending these platforms should comply with state gambling regulations. These legal battles remain unresolved.
Treatment Resources Fail to Match Industry Growth
As the sector continues expanding, public health professionals warn that assistance for individuals struggling with gambling disorders isn’t keeping pace.
Timothy Fong, who specializes in addiction psychiatry at UCLA, explained that greater accessibility and mainstream acceptance of gambling-type platforms results in increased participation and consequently greater harm.
California allocates approximately $9 million annually through its Department of Health for problem gambling initiatives. According to Fong, this represents a fraction of state expenditures dedicated to addressing tobacco and alcohol-related health issues.
In Utah, where gambling remains prohibited by law, no federal or state funding supports problem gambling resources. Despite this, the National Council on Problem Gambling’s helpline has fielded close to 18,000 calls from Utah residents beginning in 2016.
Cole Wogoman, representing the National Council on Problem Gambling, explained the helpline can only direct callers to whatever resources exist within their jurisdiction. For Utah residents, available options are restricted to financial counseling, peer support networks, and remote healthcare services.
Gamblers Anonymous maintains only a single in-person gathering in Utah, situated in St. George.
One trustee identified as Michael C noted that gambling activity occurs regardless of legal status, adding that he considers unregulated day trading and stock market speculation through a similar lens.
The National Council on Problem Gambling has thrown its support behind the Points Act, which lawmakers introduced in Congress during March. This legislation would establish America’s first federally funded program for gambling addiction prevention and treatment. Wogoman emphasized that federal intervention is significantly overdue.
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