Are Prediction Markets Poised to Take Over Sports Betting, Domestically and Abroad?

Prediction markets are the most worrisome problem facing the regulated gambling sector in the US. Lawmakers and regulatory officials across the pond may soon get concerned about the contentious internet trading platforms that enable the buying and selling of binary yes/no bets on everything from tomorrow's weather to whether Ukraine and Russia will achieve a peace agreement.

Derivative trades are said to be facilitated by prediction markets such as Kalshi, Crypto.com, Polymarket, and Robinhood. The US Commodity Futures Trading Commission (CFTC)-licensed websites and applications claim that state gaming regulations are irrelevant.

Established sports betting companies like DraftKings, FanDuel, and Fanatics are proceeding with their prediction market entries while federal court cases to ascertain the validity of those claims are ongoing. Casino.org's Todd Shriber reported this week that the chances are good the cases will reach the US Supreme Court.

Sportsbooks have been cautioned by state gaming authorities that prediction markets that offer contracts for sporting events are in violation of sports betting regulations and should be avoided. However, the sportsbook executives' continued investment in PM platforms suggests that they expect the legal conclusion to impede expanding markets.

President Donald Trump is a significant supporter of the prediction markets. Truth Predict, a prediction market tool, is being prepared for integration with the president's Truth Social media platform by the publicly traded company of the former casino billionaire, Trump Media & Technology Group.  

 

The Global Reach of Prediction Markets

While Polymarket, a New York-based cryptocurrency PM exchange, leads in other areas, NYC-based Kalshi is the US leader in prediction markets. Kalshi is committed to growing internationally; in October, the company revealed that its liquidity pool covers more than 140 nations.

The majority of nations have not outlawed Kalshi, however Canada, the UK, and Australia have.

"Kalshi is available to users around the world under a global model that supports participation from over 140 countries. This expansion will create a single, unified liquidity pool for prediction markets, a structure that is unique to Kalshi,” the company said.

“While other platforms operate with fragmented, region-specific markets, Kalshi’s global exchange connects traders worldwide to the same set of events, deepening liquidity and price discovery across every market,” the company added.

“Prediction markets have always had worldwide relevance. Events don’t stop at borders, and neither does trading on them. Whether it’s elections, central bank decisions, sports, or climate, users across continents can trade directly on the outcomes that shape their world,” Kalshi declared.

 

Probability of US Sports Prediction Market Prohibition

Lawmakers, attorneys general, and state regulators are still looking for ways to make sports prediction markets disappear from their jurisdictions. However, Polymarket bettors are not unduly concerned due to federal legal preemption.

"Will sports prediction markets be banned in any US state in 2025?” is one such yes/no contract on Polymarket. The trading suggests a chance of only 22%.

According to the regulations, "sports event contracts listed by a CFTC-regulated Designated Contract Market, whether accessed directly or through a Futures Commission Merchant, are legally prohibited or blocked for users in at least one U.S. state or nationwide" by December 31, 2025, at 11:59 PM ET, in order for the contract to resolve "yes."