The growing push to reframe sports betting as trading, predicting, or investing, has major implications for the “responsible gambling” model adopted by states. The word “betting” itself could be considered a euphemism for gambling, but the new terminology is even more troubling.
The so-called “prediction market” sector, currently led by Kalshi and Polymarket but with a slew of others either in the pipeline or trying to grow, has rattled the state regulatory landscape. Robinhood, the controversial stock and cryptocurrency app, offers sports “trading” through a Kalshi partnership.
In 2025, the Commodity Futures Trading Commission (CFTC) essentially enabled “yes/no” style gambling on sports outcomes — across the country over mobile devices. Analogues to moneylines, spreads, props, and parlays are available, depending on the platform.
Legal experts have suggested that the Supreme Court could eventually decide the legality of prediction market sports betting. But that might not come for a few years. Meanwhile, the upstart platforms are acquiring users.
Fight Over Spots Betting
Though prediction markets are still revenue pipsqueaks compared to FanDuel and DraftKings, Kalshi and Polymarket’s respective 10-figure valuations suggest high investor optimism. Donald Trump Jr. appears to be a driving force behind the companies, under his investor/advisory roles. Peter Thiel is also an investor in Polymarket.
Numerous states are fighting back in court to protect their sports betting tax revenue streams. The traditional sports betting industry also creates jobs — but not many.
Over the past seven years since the Murphy ruling, various states have required traditional betting apps to have some consumer protection tools and offer self-exclusion. The measures don’t appear to be working very well, but that doesn’t mean they fall short for everyone. Self-exclusion can be a real lifeline for someone at an advanced stage of addiction. States have started to look at policy improvements — regarding credit cards, artificial intelligence, and advertising rules, for example — but progress has been slow or non-existent. Meanwhile, the industry continues to push legalization in new states.
Some critics of the responsible gambling model say it’s a complete failure, while others say it needs improvement. The cynical industry perspective is that the status quo is working.
To compete with Kalshi and Polymarket, DraftKings announced plans for a DraftKings Predictions product. The company used the term “responsible engagement” to refer to consumer protections on the new platform.
No Betting Safeguards
Meanwhile, prediction market platforms exploited what states have called a legal loophole at the federal level. States can’t require these gambling sites to participate in self-exclusion programs or display information about gambling addiction resources. Alarmingly, prediction markets allow users 18 and over, even in states with a legal sports betting age of 21.
The casino industry’s responsible gambling messaging began in the 1990s in response to the recognition of gambling addiction as a real mental illness. It was long overdue. Just a few decades later, online sports gambling in the form of buying and selling “contracts” — enabled by the federal government — is beginning to upend the model.
Will there be a race to the regulatory bottom? Will enforcement of existing state-level regulations on responsible gambling worsen? Does reform have any chance now? It remains to be seen.
As flawed as “responsible gambling” is for an addictive product, its decline in this context has no positives. What’s coming next appears to be even worse.
Discover more from GamblingHarm.org
Subscribe to get the latest posts sent to your email.
