TLDR
- Platforms like Kalshi and Polymarket are expanding fast across the US, including in states where gambling is illegal
- Public health experts warn that addiction support resources are not keeping up with the growth of online betting
- Kalshi and Polymarket classify themselves as event derivatives sellers under federal CFTC oversight, not gambling operators
- California spends just $9m a year on problem gambling — far less than it spends on tobacco and alcohol harms
- The Points Act, introduced in Congress in March, would create the first federal funding for gambling addiction treatment
Prediction markets are growing fast in the United States. Platforms like Kalshi and Polymarket now let users bet on everything from Tony Award winners to World Cup goals. But public health experts say the systems meant to help people with gambling problems are not keeping up.
Kalshi ran ads around the NBA Finals. Polymarket had its logo displayed on the cage at a UFC event held at the White House last Sunday. The industry is pushing hard for mainstream visibility.
The rapid growth of digital betting traces back to 2018, when the Supreme Court overturned the federal ban on sports betting. Since then, sports betting has become legal in 39 states and Washington D.C. Prediction markets have followed a similar path.
How These Platforms Operate Outside State Gambling Laws
Kalshi and Polymarket argue they are not gambling operators. They say they sell event derivatives and should fall under federal oversight from the Commodity Futures Trading Commission, not state gambling regulators.
That argument has allowed them to operate in states like Utah and Hawaii, where gambling has long been banned. More than a dozen lawsuits have been filed across multiple states challenging this position.
The Trump administration has sided with the platforms. President Trump said last month it was critically important for the CFTC to keep exclusive authority over prediction markets. A CFTC spokesperson confirmed the agency would defend that jurisdiction against state challenges.
The legal battle is still ongoing while the industry keeps expanding.
Addiction Support Resources Stretched Thin
Addiction psychiatrist Timothy Fong at UCLA said increased access and normalization of gambling-like services leads to more usage and more harm. He said resources for problem gambling are far behind the growth of online betting.
California spends about $9 million a year on problem gambling through its Department of Health. That is far less than what the state spends on tobacco and alcohol-related harms.
Utah offers an even starker picture. The state has strong anti-gambling laws and no federal or state-funded resources dedicated to problem gambling. Yet the National Council on Problem Gambling’s helpline has received nearly 18,000 calls from Utah residents since 2016.
The helpline runs on donations. Cole Wogoman of the National Council said the helpline can only offer resources that exist in the caller’s state. In Utah, that means limited options.
Gamblers Anonymous has just one in-person meeting in the entire state, located in St. George. Virtual meetings have helped since the pandemic, but coverage remains thin.
One trustee, Michael C., noted that gambling can exist even where it is not legal. He also said he views day trading and stocks as a form of gambling when people have no control over their decisions.
The National Council on Problem Gambling is backing the Points Act, introduced in Congress in March. It would create the first-ever federal funding stream for gambling addiction prevention and treatment. Wogoman said federal action is long overdue.
