US Prediction Markets Surge as Gambling Support Lags Behind

Public health advocates in the US are warning that resources for people with gambling problems are not keeping pace with the rapid growth of prediction markets and online betting. Their concerns have grown as platforms such as Kalshi and Polymarket expand across the country, including in states with limited support for problem gambling.

Read more Brazil Expands Financial Enforcement Against Illegal Betting Operators

Expanding Market Reach

Prediction market platforms now let users wager on a wide range of outcomes, from Tony Award winners to World Cup goals. Leading brands have also been pushing hard for visibility, with Kalshi advertising around the NBA finals and Polymarket’s logo displayed on the cage hosting UFC fights at the White House last Sunday.

Advocates say the spread of these platforms across the US, including in states that have long prohibited gambling, means they are operating in places where public resources for people with gambling problems are limited. Addiction psychiatrist and gambling expert Timothy Fong at UCLA noted that increased access and normalization of gambling-like services result in increased usage and, consequently, more side effects.

The expansion of digital betting has been greatly enhanced since the Supreme Court of the United States overturned the federal ban on sports betting in 2018. Sports betting has become legal in 39 states and Washington D.C., while prediction markets have gained traction more recently.

Federal And State Divide

Kalshi and Polymarket argue that they are not gambling operators and should instead be treated as sellers of event derivatives under federal oversight from the US Commodity Futures Trading Commission. That argument has allowed them to operate in much of the country, including states such as Utah and Hawaii, where gambling has long been illegal.

There are more than a dozen lawsuits filed in multiple states questioning this viewpoint, where the regulators and lawmakers claim that the services should be regulated by state gambling laws instead. The legal fight is still unfolding while the industry continues to expand.

The Trump administration has been sympathetic to the industry’s position. Donald Trump said last month that it was critically important for the CFTC to keep exclusive authority over prediction markets rather than leaving the matter to the states.

A CFTC spokesperson said Congress gave the agency exclusive jurisdiction over swaps, including prediction markets, in order to create a federal framework and avoid a patchwork of conflicting state laws. The spokesperson also said the agency would defend that jurisdiction against states that try to bypass federal law.

Read more How Belgium tie vs. Iran could shake up USMNT knockout bracket at 2026 World Cup

Help Systems Under Strain

While the legal battles continue, public health experts say support systems for gambling addiction remain thin. Fong said resources are far behind the growth of online betting and prediction markets, adding that California spends about $9m a year on problem gambling through its Department of Health, far less than what it allocates to tobacco and alcohol-related harms.

He said the central question is who is responsible for helping people harmed by these products. In his view, many people who develop gambling problems never seek help and simply suffer quietly.

In Utah, where gambling remains illegal and anti-gambling laws are among the strongest in the US, there are no federal or state-funded resources dedicated to problem gambling. Yet the National Council on Problem Gambling’s helpline, which depends on donations, has still received nearly 18,000 calls from Utah residents since 2016.

Calls For Federal Action

The increase in calls has not surprised experts, given the growth of online betting and prediction markets. Cole Wogoman of the National Council on Problem Gambling said the helpline can only offer resources if those resources exist in the caller’s state. In Utah, that may mean budgeting guidance, peer-support information, and telehealth counseling services, but little else.

Gamblers Anonymous has just 1 in-person meeting in Utah, in St. George, although virtual meetings have expanded access since the pandemic. Michael C, a trustee whose district includes parts of Utah, said gambling can still exist even where it is not legal, and said he also sees day trading and stocks as forms of gambling when people have no control over the outcome.

The National Council on Problem Gambling supports the Points Act, introduced in Congress in March, which would create the first federal funding stream for gambling addiction prevention and treatment. Wogoman said it is long past due for the federal government to take the addiction seriously.

Read more How Belgium tie vs. Iran could shake up USMNT knockout bracket at 2026 World Cup

Source: The Guardian