"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."
"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."
Prediction markets such as Kalshi and Polymarket operate as unregulated sports betting platforms despite marketing themselves as tools for transparency and price discovery. Sports gambling comprises the overwhelming majority of activity on these platforms, with Kalshi estimating it at 90%. The CFTC's regulatory approval has allowed these platforms to bypass state and tribal frameworks, offer online sports betting nationwide, and avoid hundreds of millions in state sports betting taxes. The CFTC lacks the authority, resources, and expertise to regulate online sports betting, a responsibility the Supreme Court affirmed belongs to states. Congress never granted the CFTC this authority, yet the agency has effectively given operators a blank check to offer unregulated gambling across the country.
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