Odds are you were miserable watching Drake Maye eat dirt on national television a few weeks back. All my friends certainly were. Ah, if only I had money on the game to ease my pain! See, if I were 18 a few years back, placing a bet on the Super Bowl would be illegal — poorly regulated and probably doable — but illegal, nonetheless. In Massachusetts, 21 is the minimum age to wager on an over-advertised online sportsbook. This year, though, it was completely legal for me to put the house on the winning team’s Gatorade color being lemon-lime. State law hasn’t changed, so what gives?
Prediction markets. Out with FanDuel and DraftKings, in with Kalshi and Polymarket! You only have to be 18 to “predict” events with your wallet. If the Super Bowl got you hooked, Polymarket’s even offering the chance to wager on whether Jesus Christ will return in 2026! On prediction markets, the world is your oyster to bet on.
Except it’s not “betting,” at least in legal terms. What Kalshi and Polymarket claim to offer is an exchange of financial products tied to real-life outcomes. In other words, instead of playing against a sportsbook or casino, prediction market users buy and sell event contracts from each other. Why is it legal? Well, because it’s technically not “betting,” a domain controlled by the states. Prediction markets are regulated by the federal government’s Commodity Futures Trading Commission (CFTC). Hence, Kalshi is legal in all 50 states for 18-year-olds, but traditional gambling is not. On a spectrum of financial activities, Kalshi CEO Tarek Mansour claims his company is more like the New York Stock Exchange than DraftKings.
If you take a step back from the legalese and spend five minutes on Kalshi, however, the “it’s not betting” argument falls stunningly flat. The app lets users toggle between “prediction mode” and “sports fan mode.” The latter of the two presents moneylines and odds in an interface practically identical to FanDuel and other online sportsbooks. When “predicting,” you can stack prop bets in what Kalshi refers to as a “combo.” If you’re familiar with sports betting, that sounds an awful lot like a parlay. Despite wanting to distinguish itself as an “exchange” as opposed to a “sportsbook,” Kalshi hasn’t been very subtle with its intentions. Social media ads for the company at one point read, “BREAKING NEWS: SPORTS BETTING IN CALIFORNIA IS NOW LEGAL.” Actual sports betting is not legal in California.
Here’s where prediction markets proponents may also argue that their technology serves an academic purpose. Said purpose? To predict the future.
Polymarket CEO Shayne Coplan recently boasted to Anderson Cooper on “60 Minutes” that prediction markets like his are “the most accurate thing we have as mankind right now.” Coplan’s logic relies on the “wisdom of crowds”: the theory that when you aggregate individual decisions within a group, the result is closer to reality than you might think. To some extent, prediction markets do work in this regard. Polymarket had Donald Trump winning in 2024 while pundits were still debating. Compared to analysts, bettors wager according to their true beliefs and aren’t forced to make a prediction if they’re unsure.
“If the Super Bowl got you hooked, Polymarket’s even offering the chance to wager on whether Jesus Christ will return in 2026! On prediction markets, the world is your oyster to bet on.”
Ask most Kalshi users, though, and they’ll tell you they use the app to bet. Is Polymarket’s goal to predict the future or make billions while claiming they’re doing it?
As new prediction markets sprout with a friendlier CFTC, and as every major company under the sun (think media, tech, sports) lines up to partner with Kalshi and Polymarket, the threat of gambling-related disorders continues to loom over young adults. You can bet on anything these days. I kid you not, there’s a market on Polymarket about when the Supreme Court will accept a case regulating sports event contracts.
Imagine if The Vanguard were to unveil a prediction market for who the next school co-presidents are or how many times Ms. Keimowitz mentions “phones” at the next assembly. We’d call it absurd. We’d call it betting. The law should, too.
