The Legalized Gambling Industry Is Collapsing in on Itself
You’ll soon be able to bet on elections, the Super Bowl, and the papal conclave, all in one place.
BY NITISH PAHWA
Prediction markets like Polymarket—best known for bets on current events like elections, market trends, or celebrity news—haven’t been fully legalized the way sports-betting apps have, with the blessing of the nation’s highest court. But thanks to political connections, and a regulatory system gutted and captured by private interests, they’ve been allowed to operate more freely than ever before. And they’re using that to expand their gambling ambitions intothe sporting world, to the ire of Native American reservations that rely on sportsbook revenue, as well as the established companies (DraftKings, FanDuel, Caesars Sportsbook, etc.) still earning their operational licenses state by state.
All year, the New York–based betting exchange Kalshi (which counts Donald Trump Jr. as a “strategic adviser”) has been facing off against individual state-level regulators over its offers for users to bet on sporting events. As Front Office Sports characterized the still-ongoing disputes back in April: “The legal fight stems from the question of whether or not Kalshi’s sports event contracts constitute sports betting, according to court documents. Kalshi argues its offerings are trades on sports outcomes, not bets, and should therefore be regulated by federal, not state, law.” (Basically: In a typical casino setup, the house controls the stakes. A prediction market, by contrast, adjusts prices based solely on public participation.) If its all-but-legal “events contracts” are to be applied to professional-game outcomes and legally deemed to be materially different from the process that undergirds apps like BetMGM, then Kalshi can hardly be limited by the same terms governing other sports-betting apps—and the whole gambling space will be even more of a Wild West than it is now.