Prediction market platforms such as Kalshi and Polymarket are rapidly expanding across the US, including in states with limited resources for gambling harm support, raising concerns among public health advocates.
These platforms allow users to wager on a wide range of events, from sports outcomes to entertainment awards, pushing betting further into everyday American life. Their aggressive marketing campaigns, including sponsorships during major events like the NBA Finals and UFC fights, have increased visibility and accessibility for players nationwide.
Unlike traditional gambling operators regulated at the state level, these prediction markets operate under federal oversight by the US Commodity Futures Trading Commission (CFTC). This regulatory distinction has allowed them to offer services in states where gambling is otherwise prohibited, such as Utah and Hawaii. However, this has sparked legal challenges from several states seeking to apply their gambling laws to these platforms.
For players and bettors, this means easier access to new forms of betting but also increased exposure to gambling-related risks. Addiction specialists warn that expanding access and normalizing these products can lead to higher participation and more gambling-related problems. “When you expand access and availability and normalization of it, youre going to have more participation,” said Timothy Fong, addiction psychiatrist and gambling researcher at UCLA. “When you have more participation and engagement in risky products, youre going to have more problems, youre going to have more side effects.”
Public health resources have not kept pace with this growth. For example, California spends roughly $9 million annually on problem gambling services, a fraction compared to funds allocated for tobacco and alcohol-related harms. This gap leaves many players at risk without adequate support or treatment options.
Since the US Supreme Court struck down a federal ban on sports betting in 2018, the digital gambling industry has expanded rapidly. Sports betting is now legal in 39 states and Washington DC. More recently, prediction market platforms have surged in prominence, marketing heavily around major sporting events and cultural moments.
Companies like Polymarket and Kalshi argue they are not traditional gambling operators but offer “event derivatives” regulated federally by the CFTC. This has allowed them to operate nationwide, even in states that have long prohibited gambling. However, more than a dozen lawsuits across several states challenge this interpretation, with regulators and lawmakers pushing for state-level regulation.
The Trump administration has supported the industry’s position, with former President Donald Trump stating it is “critically important” that the CFTC maintain “exclusive authority” over prediction markets. A CFTC spokesperson emphasized that the agency will defend its jurisdiction against states attempting to bypass federal law, saying, “The CFTC will defend that jurisdiction against overzealous states that attempt to bypass federal law.“
As legal battles continue, players should be aware of the potential risks associated with prediction markets and seek help if gambling causes harm. The expansion of these platforms highlights the need for improved consumer protections and increased funding for problem gambling services nationwide.
For more on gambling regulation and player safety, see our coverage on USA gambling news and responsible gambling.
Additional context on gambling sponsorship and regulation can be found in recent reports such as Football regulator urged to ban Premier League clubs from unlicensed gambling money and insights into gambling strategies in Lucky Devils chronicles the exploits of three advantage gamblers.
Source: Gambling | The Guardian.
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