TLDR
- Platforms like Kalshi and Polymarket are expanding rapidly across the US, including in states where gambling is illegal
- Public health advocates warn that addiction support resources are not keeping pace with the industry’s growth
- Kalshi and Polymarket claim they sell event derivatives, not gambling products, placing them under federal CFTC oversight
- Over a dozen lawsuits across multiple states are challenging that classification
- The Points Act, introduced in March, would create the first federal funding for gambling addiction treatment
Prediction Markets Expand Into Every Corner of the Country
Prediction market platforms like Kalshi and Polymarket have grown quickly across the United States. Users can now bet on outcomes ranging from Tony Award winners to World Cup goals.
The platforms have been pushing for visibility. Kalshi ran ads around the NBA Finals, and Polymarket’s logo appeared on the UFC cage at the White House last Sunday.
This growth follows the Supreme Court’s 2018 decision to overturn the federal ban on sports betting. Sports betting is now legal in 39 states and Washington D.C.
Kalshi and Polymarket argue they are not gambling operators. They say they sell event derivatives and fall under federal oversight from the US Commodity Futures Trading Commission, not state gambling laws.
That argument has allowed them to operate in states like Utah and Hawaii, where gambling has long been illegal.
The Trump administration has backed that position. President Trump said last month that it was critically important for the CFTC to keep exclusive authority over prediction markets.
A CFTC spokesperson confirmed the agency has jurisdiction over swaps, including prediction markets, and said it would defend that authority against states attempting to bypass federal law.
More than a dozen lawsuits have been filed across multiple states. Regulators and lawmakers in those states argue the platforms should be subject to state gambling laws. The legal fight is ongoing.
Addiction Support Is Not Keeping Up
While the industry grows, public health experts say help for people with gambling problems is falling behind.
UCLA addiction psychiatrist Timothy Fong said that increased access and normalization of gambling-like services leads to more usage and more harm.
California spends around $9 million a year on problem gambling through its Department of Health. Fong said that is far less than what the state spends on tobacco and alcohol-related harms.
In Utah, where gambling is illegal, there are 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.
Cole Wogoman of the National Council on Problem Gambling said the helpline can only point callers toward resources that actually exist in their state. In Utah, options are limited to budgeting guidance, peer support, and telehealth.
Gamblers Anonymous has just one in-person meeting in Utah, located in St. George.
One trustee, Michael C, said gambling still happens where it is not legal, and added that he views uncontrolled day trading and stocks in the same way.
The National Council on Problem Gambling supports the Points Act, introduced in Congress in March. It would create the first federal funding stream for gambling addiction prevention and treatment. Wogoman said federal action is long overdue.
