Better Markets, a nonpartisan public policy organization, is intensifying criticism of prediction market operators, arguing that platforms offering so-called event contracts are effectively providing nationwide gambling services while avoiding state gaming regulations.
The group says companies such as Kalshi, Polymarket, and Crypto.com present their products as financial instruments even though users are wagering on real-world outcomes, including elections, sporting events, and entertainment awards.
“These activities are no different in substance than gambling at a casino, sportsbook, or corner bookie, which is why ‘prediction market’ users can bet on everything from elections and sporting events to the Golden Globes and the return of Jesus Christ,” says Better Markets.
According to the organization, the use of the term event contracts allows operators to bypass long-standing state oversight of gambling despite offering services similar to those provided by casinos and sportsbooks.
Better Markets has also raised concerns about the regulatory framework governing the industry, directing criticism toward the Commodities Futures Trading Commission, the federal agency responsible for supervising derivatives markets and currently overseeing prediction market platforms.
“The CFTC is a federal financial regulatory agency with no experience, expertise, personnel, technology, or budget to police gambling in all 50 states covering an unlimited number of topics, and trying to do so will distract the CFTC from its critical mission of policing the multi-trillion derivatives and commodities markets,” adds the group.
“All Americans depend on the CFTC to make sure that everyday essentials from cereal at breakfast and bread for lunch sandwiches to gas for the car and oil to heat a home, are available at the right time, in the right quantities, and fairly priced based on supply and demand.”
The organization has been involved in the policy debate over prediction markets since 2022 through regulatory filings, court proceedings, and public advocacy.
The policy group argues that event contracts tied to outcomes such as sports competitions do not meet the requirements of the Commodities Exchange Act, which authorizes the CFTC to regulate derivatives like futures, options, and swaps when those products have genuine financial utility and hedging functions.
Better Markets also points to a 2011 decision in which the CFTC prohibited event contracts involving war, assassination, terrorism, gaming, or activities unlawful under state or federal law.
Moreover, during earlier congressional discussions about derivatives regulation, says Better Markets, Senator Blanche Lincoln, then chair of the Senate Agriculture Committee, said lawmakers did not intend to “enable gambling through supposed ‘event contracts,” including any event contracts on “sporting events such as the Super Bowl, the Kentucky Derby, and Masters Golf Tournament.”
Better Markets also noted that Kalshi acknowledged similar distinctions in past court filings, stating that “Congress did not want sports betting to be conducted on derivatives markets.”
The group argues that prediction market operators are introducing gambling activity nationwide without the oversight typically required for betting industries.
“These companies have unleashed unregulated nationwide gambling without the involvement or review by any elected official, regulator, or policymaker, even though there is a very significant public interest in properly regulating gambling to keep criminals out, prevent minors from engaging in gambling, prohibit the use of nefarious gamification and AI deepfakes, deal with addiction and other social consequences like alcoholism, drug abuse, bankruptcy, spouse and child abuse and other anti-social activities often associated with gambling,” said the policy group.
Original article: https://www.yogonet.com/international/news/2026/03/09/117955-better-markets-says-prediction-market-platforms-amount-to-nationwide-unregulated-gambling
