A simple question: if you wager (or “invest” or “purchase a contract for”) $100 on who will win the NCAA championship next month, is that a sports bet?
If you said yes, you are probably a normal, rational human being. If you said no, you are probably heavily invested in Kalshi or Polymarket.
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.
The Commodity Futures Trading Commission’s embrace of these platforms has allowed them to bypass state and tribal regulatory frameworks, offer unregulated online sports gambling all across the country, and skirt hundreds of millions in state sports betting taxes. It is telling that in his defense of prediction markets, CFTC Chair Mike Selig did not mention “sports” once, despite it being the primary use case for prediction markets today.
