Prediction Markets Are Simply Casinos, Says Public Policy Expert
Posted on: January 26, 2026, 07:53h.
Last updated on: January 26, 2026, 07:53h.
- Kalshi, Polymarket aren’t “genuine markets,” says Better Markets director
- He says “prediction market” is a disingenuous label
- Adds CFTC is “ill-suited” to regulate prediction markets
A public policy expert believes there’s no essentially no difference between prediction markets and casinos, local bookies, and any other betting avenue.
In a new report titled “Predictably, ‘Prediction Markets Are Just Casinos,’” Better Markets Director of Securities Policy Benjamin Schiffrin says just that: Prediction markets are casinos. He also adds to the growing chorus of critics noting companies like Kalshi and Polymarket use the term prediction market to skirt state gaming laws.
Prediction markets are virtually indistinguishable from a casino, a street corner bookie, a gambling app, or any other place you can place bets,” says Schiffrin. “They call themselves prediction markets to avoid longstanding regulation by the states, which have regulated gambling for many decades to protect customers and reduce the involvement of organized crime and other financial predators.”
While the term “financial predators” may seem harsh, Kalshi, as just one example, is facing a class action suit in which the plaintiffs claim the company preyed on clients with problem betting patterns while disguising itself as a safer alternative to standard sports betting. Schiffrin adds that prediction markets aren’t representative of the general public. Rather, as is the case with old guard sportsbooks, the typical prediction market bettor/trader is a young man — a demographic provably vulnerable to harmful betting habits.
Prediction Markets ‘Aren’t Real Markets’
Schiffrin contends that prediction markets aren’t based in reality as are equity, fixed income, or other traditional financial markets.
“Real markets are properly regulated to ensure that the activity is real, that there is a level playing field, and that participants make good on their trades,” observes the Better Markets director. “That results in genuine trading and fair dealing among participants. Real markets have a regulator to prevent conflicts of interest and to stand between the buyer and seller to ensure the well-functioning of the market. None of that is applicable to these so-called prediction markets.”
In the wake of insider trading issues, including those centering around technology product launches and the recent US incursion in Venezuela, Schiffin notes it’s difficult for bettors and traders to make money on yes/no exchanges without insider information.
“Kalshi and Polymarket contend that by letting the world know what the ‘crowd’ thinks will happen, their sites provide valuable information that is more accurate than polls or prognostications,” he said. “The problem is that, absent inside information, the users on these sites are no more likely to know whether a candidate will win an election or a team will win a game than anyone else.”
Currently, there are no insider trading laws governing prediction markets as there are in the bond and stock markets, but some policymakers are looking to change that.
CFTC Not Up to the Regulatory Task
The Commodities Futures Trading Commission (CFTC) regulates prediction markets and the industry has leaned into that status, claiming it allows their platforms to operate in all 50 states without permission from the various state gaming regulators.
Schiffrin says the CFTC isn’t up to the task of regulating an industry that’s essentially a new form of gambling and that court decisions support that perspective.
“Several judges have found these sites indistinguishable from gambling,” he concludes. “Policymakers should follow the lead of these courts. Prediction markets should be recognized for what they are—unregulated, 24/7 casinos. They must be regulated as gambling operations to protect the public before it’s too late.”
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