Key Highlights
- Recent polling of more than 15,000 U.S. adults reveals 81% classify purchasing sports event contracts via prediction markets as gambling activity
- Just 29% express confidence in the CFTC’s capacity to oversee sports event contracts effectively, while 49% show minimal trust in platforms’ insider trading prevention measures
- A substantial 78% believe prediction market companies should face identical state taxation and licensing fees as traditional sportsbooks
- Multiple state governments have pursued legal action against prediction market platforms, with Nevada securing victories in cases involving Kalshi and Coinbase
- Market growth persists despite regulatory headwinds—Kalshi allegedly processed over $800 million in transactions during March Madness opening weekend, while major operators DraftKings, FanDuel, and Fanatics launch competitive offerings
Recent polling data reveals overwhelming public sentiment that sports-focused prediction market contracts constitute gambling rather than legitimate investment vehicles. The comprehensive study, executed by Morning Consult, captured perspectives from over 15,000 participants during a five-day period spanning March 17-22.
The research received funding from Gambling is Not Investing, an advocacy organization dedicated to blocking federally regulated exchanges from providing sports-related contracts. Findings indicate that 81% of participants categorize purchasing contracts based on sporting event results as gambling activity.
Mick Mulvaney, who leads Gambling is Not Investing and previously served as acting White House chief of staff, stated the findings validate mounting public apprehension. He criticized prediction market platforms for presenting sports wagering products under the guise of financial trading instruments.
A mere 29% of survey participants expressed belief that the Commodity Futures Trading Commission possesses adequate capability to supervise sports event contracts. The CFTC functions as the federal regulatory body with jurisdiction over prediction market operations.
CFTC chairman Mike Selig, who received his presidential nomination from Trump and Senate confirmation last December, has emerged as a vocal advocate for prediction markets offering sports-linked contracts. His position has sparked pushback from state-level regulators and established gambling industry stakeholders.
Consumer Confidence in Prediction Platforms Lacks Strength
Survey results demonstrate that 73% of participants believe terminology such as “event contracts,” “swaps,” or “futures” masks genuine financial exposure for participants. Over half indicated that purchasing sports outcomes through prediction platforms presents equivalent risk to placing bets through licensed bookmakers.
Only 34% conveyed trust that prediction market platforms deliver safeguards matching those of regulated sportsbooks. Approximately half, 49%, reported minimal to zero confidence in these platforms’ capabilities to block insider trading activities.
An overwhelming 81% stated prediction markets must comply with state-level sports wagering regulations, encompassing age verification requirements and problem gambling protections. Current prediction market frameworks permit participation from adults aged 18 and up, whereas most jurisdictions mandate a minimum age of 21 for sports betting.
Regarding taxation policy, 78% supported requiring prediction market operators to remit equivalent state taxes and licensing fees as conventional sportsbooks. Throughout most jurisdictions, sportsbooks face taxation on gross gaming revenue, whereas prediction markets collect transaction fees on peer-to-peer trades.
Detractors contend that prediction markets’ deployment of market makers for liquidity provision renders them operationally indistinguishable from traditional sportsbooks.
Legal Challenges and Legislative Action Gain Momentum
Multiple state jurisdictions have initiated litigation against prediction market companies. Nevada has secured judicial rulings preventing Kalshi and Coinbase from facilitating contracts connected to sports, entertainment, and political outcomes.
Massachusetts similarly obtained a temporary restraining order targeting Kalshi, barring the platform from marketing sporting event contracts within state boundaries.
Within Congress, lawmakers from both parties have introduced regulatory legislation targeting prediction markets. U.S. Senators John Curtis and Adam Schiff jointly sponsor proposed legislation that would ban prediction markets from providing products resembling sports wagering or casino-style gaming.
Curtis characterized the legislation as protecting state sovereignty, safeguarding families, and preventing speculative financial instruments from infiltrating inappropriate domains.
Notwithstanding this resistance, prediction market platforms demonstrate continued expansion. Recent industry reports suggest Kalshi facilitated upwards of $800 million in trading volume exclusively during March Madness tournament opening weekend.
DraftKings, FanDuel, and Fanatics have each launched prediction market services. These offerings enable them to provide sports contracts within populous states including California, Georgia, and Texas, where traditional sports betting authorization remains absent.
DraftKings CEO Jason Robins characterized prediction markets as “a massive incremental opportunity” during recent quarterly earnings discussions. He projected the company anticipates generating hundreds of millions in annual revenue from its predictions division within several years.
