Key Moments:
- 85 percent of survey respondents consider prediction markets a form of gambling rather than financial instruments
- 84 percent of Americans want sports event contracts limited to state-licensed sportsbooks
- State regulation is favored, with 69 percent preferring states determine local prediction market operations
Public Perception Shifts Toward Regulation
A growing alignment has emerged between American public opinion and the stance of gambling regulators when it comes to prediction markets. Fresh data released by the American Gaming Association (AGA) highlights that a significant portion of voters view these platforms, particularly those tied to sports outcomes, as akin to traditional gambling products.
The AGA’s survey, titled Sports Event Contracts: Public Opinion Landscape, reveals that 85 percent of respondents classify prediction markets as gambling, not as financial tools. This perspective is further reinforced by widespread calls for stricter oversight: 84 percent believe only state-licensed sportsbooks should be allowed to offer sports event contracts. This position closely mirrors the sentiment shared by AGA president and CEO Bill Miller, who stated that customers “expect prediction markets to follow the same rules and safeguards as state-licensed sportsbooks.”
The study also uncovered a preference for decentralized regulation, with 69 percent of those surveyed favoring state-level decision-making over federal intervention for the authorization of prediction markets within their jurisdictions.
Growth Prompts Regulatory Attention
Despite lacking a specific regulatory regime, platforms like Kalshi and Polymarket have expanded quickly, now providing markets on a variety of events, including politics and sports. This rapid growth has led to both legal disputes and increased interest from established betting operators. For example, Kalshi has recently been involved in an appeals dispute with New Jersey regulators, and reports surfaced earlier this year of FanDuel engaging in partnership discussions with Kalshi, signaling the financial promise seen in these markets by major sportsbook brands.
However, some industry observers warn about the potential dangers of this regulatory uncertainty. The absence of a comprehensive framework raises questions about integrity and consumer protection, especially given the growing overlap between prediction markets and conventional sports betting.
Bill Miller echoed these apprehensions in the AGA report: “Americans are clear: sports event contracts should be treated like other forms of sports betting and fall under state and tribal regulatory authority, not federal commodities regulators.”
Regulatory Developments in Washington, D.C.
The debate over regulatory authority has intensified in Washington, D.C. The Commodity Futures Trading Commission (CFTC), which typically oversees derivatives markets, faces increasing scrutiny over whether prediction contracts fall within its purview. The agency has taken action against certain markets it classifies as gaming contracts, while calls continue for a legislative structure specific to these products.
A notable event is scheduled for September 29, when the CFTC and Securities and Exchange Commission (SEC) will co-host a roundtable devoted to event contracts and prediction markets. This discussion aims to address fragmented regulatory oversight and to clarify how these emerging products should be governed.
Concerns about prediction markets have entered the realm of professional sports, with organizations like Major League Baseball and other leagues urging regulators to establish safeguards to ensure integrity and maintain public trust.
The AGA’s findings bring additional political significance to these concerns. Miller emphasized the importance of regulatory enforcement: “the need for the CFTC to enforce and uphold its own regulations that prohibit gaming contracts, and for Congress to use its oversight power to ensure prediction markets are not used as a backdoor for gaming.”
Looking Ahead
The future of prediction market regulation will depend on how authorities manage the balance between fostering financial innovation and ensuring gambling protections. These markets bridge trading and betting, appealing to a younger demographic experienced with both investment apps and sportsbook platforms.
With 84 percent of Americans advocating for tighter oversight and most states having established sports betting regulations, there is growing momentum for a unified regulatory approach. While federal agencies continue to deliberate their roles, public sentiment increasingly supports stronger controls.
| Survey Outcome | Percentage |
|---|---|
| View prediction markets as gambling | 85% |
| Support offering sports event contracts only through state-licensed sportsbooks | 84% |
| Prefer state, not federal, decision-making | 69% |
- Author
Daniel Williams
