TLDR
- A survey of over 15,000 Americans found 81% believe buying contracts on sporting events through prediction markets is gambling
- Only 29% think the CFTC can effectively regulate sports event contracts, and 49% expressed little or no trust in prediction markets’ ability to stop insider trading
- 78% of respondents believe prediction market operators should pay the same state taxes and fees as licensed sportsbooks
- Several states have filed lawsuits against prediction market operators, with Nevada winning court cases against Kalshi and Coinbase
- Despite opposition, Kalshi reportedly executed over $800 million in trades during the first NCAA Tournament weekend, and DraftKings, FanDuel, and Fanatics have all entered the prediction market space
A new survey shows that the vast majority of Americans view prediction market sports contracts as gambling, not investing. The poll, conducted by Morning Consult, gathered more than 15,000 responses between March 17 and 22.
The survey was commissioned by Gambling is Not Investing, an organization working to prevent federally regulated exchanges from offering sports contracts. The results show 81% of respondents said buying contracts on sporting event outcomes counts as gambling.
Mick Mulvaney, Executive Director of Gambling is Not Investing and a former acting White House chief of staff, said the results confirm growing concern. He accused prediction markets of disguising sports betting products as financial investments.
Only 29% of those polled believe the Commodity Futures Trading Commission can properly regulate sports event contracts. The CFTC is the federal agency that oversees prediction markets.
CFTC chair Mike Selig, nominated by President Trump and confirmed by the Senate in December, has become a strong supporter of prediction markets offering sports-related contracts. His stance has drawn criticism from state regulators and gambling industry groups.
Public Trust in Prediction Markets Remains Low
The survey found that 73% of respondents said terms like “event contracts,” “swaps,” or “futures” obscure the financial risks for traders. More than half said buying sports events on prediction platforms carries the same risk as wagering at a licensed sportsbook.
Only 34% expressed confidence that prediction market platforms offer protections comparable to licensed sportsbooks. Nearly half, 49%, said they have little or no trust in these platforms’ ability to prevent insider trading.
A strong majority, 81%, said prediction markets should follow state sports betting regulations, including age restrictions and responsible gambling rules. Prediction markets currently allow adults as young as 18 to participate, while most states require bettors to be 21.
On the tax front, 78% agreed that prediction market operators should pay the same state taxes and fees as sportsbooks. In most states, sportsbooks pay taxes on their revenue, while prediction markets charge commissions on trades between buyers and sellers.
Critics argue that prediction markets’ use of market makers to provide liquidity makes them functionally no different from sportsbooks.
States and Lawmakers Push Back With Lawsuits and Bills
Several states have filed lawsuits against prediction market operators. Nevada has won court victories blocking Kalshi and Coinbase from offering contracts tied to sports, entertainment, and politics.
Massachusetts also secured a temporary restraining order against Kalshi, preventing the company from soliciting sporting event contracts in the state.
On Capitol Hill, bipartisan legislation has been introduced to limit prediction markets. U.S. Senators John Curtis and Adam Schiff co-sponsor a bill that would prohibit prediction markets from offering anything resembling sports betting or casino gaming.
Curtis said the bill is about respecting states’ authority, protecting families, and keeping speculative financial products out of spaces where they don’t belong.
Despite this opposition, prediction markets continue to grow. Reports from late last week indicated Kalshi processed more than $800 million in trades during the first weekend of the NCAA Tournament alone.
DraftKings, FanDuel, and Fanatics have all entered the prediction market space. These platforms allow them to offer sports contracts in large states like California, Georgia, and Texas, which have not legalized sports betting.
DraftKings CEO Jason Robins called prediction markets “a massive incremental opportunity” during the company’s most recent earnings call. He said the company is targeting hundreds of millions in annual revenue from its predictions product in the coming years.
