People are divided on whether prediction markets are legally gambling. But a lot of people are using them to gamble on sports — and other things — no matter how you want to try to define it.
That is why it feels to many that it would be good policy to limit trading on prediction markets to people 21 and over. That’s the age for many forms of gambling …including sports betting.
A group representing Texas doctors is the latest to push for a minimum age of 21. Excerpts from a press release:
With online betting sites called prediction market platforms growing in popularity, the Texas Medical Association (TMA) is calling for increased regulations and safeguards to protect adolescents. …
Texas physicians recently adopted new TMA policy recommending the minimum age of 21 years for participating in these platforms, in line with gambling and sports betting apps.
“It is not considered gambling [by legal definition], although it has all of the psychological trappings of gambling,” said Lindy McGee, MD, former chair of TMA’s Committee on Child and Adolescent Health.
Texas has laws against most types of gambling, but the state does not govern prediction market platforms. The federal Commodity Futures Trading Commission regulates these platforms, which are not classified as gambling.
Concerns over young people using these apps trouble physicians who worry that young males are more likely to develop problem-gambling behaviors, driving many into addiction and other negative behavioral health impacts. … “The adolescent brain is primed to take risks,” making them susceptible to anything addictive like nicotine or alcohol – or gambling,” Dr. McGee said. “The younger you start, the more likely you are to become addicted to it.” …
The TMA policy also calls for adoption of these safety regulations:
Restrict advertising for prediction market platforms near schools and parks, and limit the presence of these ads on social media and gaming platforms that target adolescents;
Prohibit advertising using celebrities, cartoons, or characters from games and shows marketed toward teens and children; and
Ensure advertising for these platforms stipulates that participation is only for people aged 21 years or older.
This has become an increasingly common refrain:
Legislative proposals in a variety of states: New York, Illinois, New Jersey, and Connecticut to name a few.
Will this start to happen in a direct or self-regulatory way? It seems unlikely, at least for now, that the CFTC would move to impose a 21+ minimum age… but not impossible! Sports prediction market Novig has voluntarily set its minimum age at 21.
The Event Horizon briefing
A quick look at what matters most in prediction markets.
📍 The Big Story
Trump/Trump Jr. + prediction markets
Clash Between Prediction Markets and States Sets Off a Furious Political Battle (New York Times): “In early March, Donald Trump Jr. made a pitch to a crowd of Republican state attorneys general who had gathered for a three-day retreat at the Ritz-Carlton hotel in New Orleans. …”
“Sitting onstage for a question-and-answer session with Montana’s attorney general, Mr. Trump suggested that state leaders were being led astray by a ‘vested interest’ — gambling firms that wanted to protect their ‘monopolies’ by attacking prediction markets, four people familiar with his remarks said. In reality, he said, the markets already had robust oversight, describing them as a sophisticated financial tool overseen by federal officials, not state attorneys general.”
The Times also reported that the White House was involved in an effort to bless prediction markets in North Carolina with an operator-friendly tax while declaring them federally legal.
Kalshi offered a response to the NYT on its blog: “The New York Times asked a series of questions, then ignored almost every answer that didn’t align with the narrative that was being pushed. So we’re sharing the answers below.”
🔍 Much has been made of Trump Jr.’s involvement with both Kalshi and Polymarket, but there haven’t been any actual stories that would lead anyone to believe he was putting his thumb on any scales … at least until this report came out. It’s hard to separate the fact that he has a vested interest in these companies and that he has tried to insert himself into the legal morass.
➡️ More from Kalshi on the blog: “He’s a fan of the industry and has his own views. He provides advice on marketing strategy, but he does not advise on regulatory matters.”
And related to all of this, at the WSJ: “Kalshi—the prediction market operator that counts the president’s son, Donald Trump Jr., as a strategic adviser—has hired a former aide to President Barack Obama, Stephanie Cutter, as a policy adviser, and former Biden aide John Bivona, as head of federal government relations. Neal Katyal, who served as acting solicitor general during the Obama administration, this year signed Kalshi as a client. He also co-wrote a 2019 bestseller titled “Impeach: The Case Against Donald Trump.”
🔭 What To Watch For
NFL Won’t Reach Prediction-Market Deals Before Start of Season (Front Office Sports): “For months behind the scenes, the league has been holding talks with companies including Kalshi and Polymarket, as well as the CFTC. But it remains unready to get into business with prediction-market platforms, and there will be no deals in place when the regular season begins, sources tell Front Office Sports.”
“The NFL is ‘alarmed’ about markets ‘related to injuries’ that are being offered by some platforms, the source familiar with the league’s thinking tells FOS…”
❓ Would the league be more inclined to partner with prediction market operators if they could exert some control over the available offerings? Would prediction markets even be open to those terms? It seems like a game of chicken, in some ways.
🔥 Hot Market
Football is almost back!
Nearly half a million dollars has been traded on the winner of North Carolina vs. TCU on Saturday:
📝 New Event Contracts
New self-certifications listed with the Commodity Futures Trading Commission:
Kalshi: Three more perpetual crypto futures — Worldcoin, Aave, and Venice Token
Gemini: Football markets
💬 Quote Of The Day
“I’m not the most observant person but I was like, ‘Oh, this smells bad.’”
—North Carolina state Rep. Pricey Harrison, on a provision added to the state budget friendly to prediction markets. From the NYT story referenced above.
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News roundup
Everything else important that happened in or was written about prediction markets:
🚨 Important stuff
Joint Canadian Securities Administrators and Canadian Investment Regulatory Organization Staff Notice 91 – 307 Guidance related to Event Contracts: Compliance with Regulatory Requirements
CSA staff recognize that Event Contracts may fall within the broad definitions of securities or derivatives under securities and derivatives legislation. However, securities and derivatives legislation, related rules, and guidance, contemplate that certain instruments are outside the scope of that framework, or are otherwise excluded, depending on the facts and circumstances.
CSA staff’s view is that Event Contracts based on sports and entertainment events or outcomes should not be regulated within securities and derivatives legislation.
CIRO staff do not consider it appropriate to facilitate or approve an application by their dealer members to trade these types of Event Contracts.
Coverage from Covers: “The notice follows guidance issued earlier this year that came in the wake of some limited approvals of Canadian prediction markets. The offerings on those exchanges were limited from the outset and subject to certain terms and conditions. Thursday’s notice reiterated those limitations.”
And this: “Prediction markets do not enjoy the same kind of broad regulatory cover in Canada as their counterparts in the U.S. And, among other things, Canadian securities regulators prohibit offering “binary” options that mature in 30 days or less.”
Reaction from Canadian Gaming Association: “The Canadian Gaming Association welcomes today’s guidance from CSA and CIRO staff. It brings clarity to a question that matters a great deal to Canadian consumers, provincial governments, and the licensed gaming industry: sports wagering is sports betting, whatever the platform, and it belongs within the framework that provinces have built specifically to regulate it,” said Paul Burns, President & CEO, Canadian Gaming Association.
More from the CGA: The CGA has long held that sports wagering, in whatever form it takes, should be offered only through provincial gaming regulators, and that the framework governing a product should be determined by what it does, not by what it is called. Today’s guidance affirms that principle, as CSA and CIRO have drawn a clear and sensible line: the distinction between a sports contract and a sports bet should not be reduced to semantics.
More from Canadian Gaming Business: “Key context here is that the Criminal Code of Canada legally bestows the right to regulate gambling products, including sports betting, to the provinces. Ontario and Alberta have opted to open up their gambling markets by licensing commercial operators, while the other provinces maintain that their respective government-owned and -operated platform is the only legal one in their jurisdiction.”
U.S. Servicemember, KPMG Employee Are Targets of Prediction Markets Crackdown (WSJ): “Federal authorities are preparing charges against a U.S. servicemember suspected of placing Polymarket bets on military operations that earned him more than $1 million, part of a coming batch of insider trading cases, according to people familiar with the matter. …”
“Another case authorities are pursuing focuses on an employee at KPMG, the global accounting and consulting firm, people familiar with that investigation said. The employee is under investigation for betting on whether a specific public company would beat the consensus estimate for quarterly earnings, one of the people said.”
Polymarket’s AI is Feeding Users Fabricated Information (Columbia Journalism Review): “Polymarket, a betting website where users can place wagers on current events, publishes AI-generated news timelines on its website that are saturated with hallucinations ranging from misrepresentations and misattribution of news to outright fabricated references to nonexistent news stories, a Tow Center for Digital Journalism analysis finds. … Polymarket positions itself as a boon to journalism and a source of information rather than just a place to gamble, as my colleague Klaudia Jaźwińska pointed out in April, but its misrepresentations of legitimate news content undermine these claims.”
Kalshi and The Weather Company partner to bring trusted scientific weather data to the prediction market space (Kalshi News): “Kalshi will use The Weather Company’s enterprise-grade weather data feeds as its trusted source for verifying weather-related market outcomes. The Weather Company will also incorporate Kalshi’s real-time probability data within select experiences on its flagship digital brand The Weather Channel app and weather.com, giving consumers new ways to understand how markets are pricing weather risk.”
“The total volume for Kalshi’s climate and weather vertical alone has grown 500% year over year and is pacing toward $1.1 billion in annualized volume as traders look to hedge weather risks or trade on shifting climate trends.”
⚖️ Legal and regulatory news
Google Engineer Accused of Polymarket Insider Trading Says He Was Just ‘Gambling’ (Wired): “Michele Spagnuolo, the Google engineer arrested in May by US authorities for alleged insider trading on Polymarket, is making a new bold bet. On Wednesday, his legal team filed a motion to dismiss the charges against him. Spagnuolo isn’t outright denying that he made money using internal information from Google. Instead, his legal team says that the wagers were not financial instruments subject to regulation by the United States’ Commodities Exchange Act but rather good old-fashioned international betting that the US has no authority over.”
“In addition to disputing the idea that prediction markets offer swaps, Spagnuolo’s legal team argues that the US government had no jurisdiction over him in the first place because he’s a non-US citizen who was wagering on a non-US platform.”
Kate Knibbs 🏄🏻♀️@KnibbsThis is very similar to arguments made by Gannon Ken van Dyke (the special forces officer accused of profiting off Maduro trades)7:24 PM · Aug 27, 2026 · 170 Views
Jamie McDonald’s prediction market ties could supercharge prosecutions in Manhattan (Politico): “The Manhattan U.S. attorney’s office has taken the lead on high-profile cases involving online prediction markets — and the office’s new leader has a history with both the betting sites themselves and their chief regulator.”
“Jamie McDonald, the new chief of the Southern District of New York, is the former enforcement director of the Commodity Futures Trading Commission, the chief watchdog of prediction markets. The CFTC has brought two civil cases that parallel SDNY’s criminal prosecutions involving prediction markets.”
DraftKings faces California predictions suit as it ramps ads in biggest states (SBC Americas): “DraftKings faces allegations of illegal sports betting via prediction markets in a new class-action lawsuit filed in federal court in California, at the same time as it is ramping up its advertising in the biggest states where online sports wagering is not legal.”
“Alleging violations of the state’s Unfair Competition Law and False Advertising Law, the suit aims not only to block DraftKings from offering Predictions in California, but also to recover the amounts that the plaintiffs spent on the platform. The complaint suggests aggregate claims could exceed $5m.”
How College Football Could Stoke States’ Legal Ire with Prediction Markets (Covers): “In short, then, the kickoff of the college football season could reinvigorate the whole fracas over the trading of sports event contracts. While there is a prediction market boom looming for the NFL season, college football could prompt unique concerns.”
“An NCAA official noted during the June meeting that 19 U.S. jurisdictions to legalize sports betting have moved to ban college player props. If a ban is approved at an IGC meeting next month, Indiana could become another. Even then, though, prediction markets would still be present in the state. College player prop bettors could just migrate their action to the exchanges.”
📣 Industry news
FalconX and Kemet Collaborate to Further Expand Institutional Prediction Markets Trading on Kalshi (press release): Kemet, the execution and risk platform for institutional digital-asset derivatives, and FalconX, the leading digital assets prime brokerage, today announced a collaboration to enhance institutional exposure to event contracts on Kalshi, the world’s largest prediction market.
As institutional participation in prediction markets grows, firms increasingly expect the execution quality, flexibility, and controls available across more established derivatives markets. The engagement builds on Kemet’s work to support institutional trading on Kalshi and reflects FalconX’s continued momentum in prediction markets.
As one of the largest prime brokers and derivatives dealers in the digital asset space, FalconX is at the forefront of bridging institutional liquidity in frontier markets. The engagement marks the next phase of FalconX’s work with Kalshi to expand institutional access to liquidity in prediction markets. Through FalconX’s leading OTC derivatives trading desk, hedge funds, asset managers, and other counterparties can access event contract exposure with deeper liquidity to support institutional needs.
Sportradar, Polymarket Announce Significant Relationship Expansion (press release): Under the U.S. agreement, the expansion adds premier global leagues including the Bundesliga, Euroleague Basketball, the Chinese Basketball Association (CBA), the National Basketball League (NBL), Tennis Grand Slams, and UTR Pro events, among others, deepening Polymarket’s coverage across soccer, basketball, and tennis, backed by the deepest and broadest sports data and content portfolio in the industry.
This builds on Sportradar’s previously announced relationship with Polymarket, for the ATP Tour, Major League Baseball (MLB), National Hockey League (NHL), Major League Soccer (MLS) and Ultimate Fighting Championship (UFC). The two companies expect to continue building their partnership with additional products, properties, and markets.
Farewell, American odds:
Jacob Fortinsky@j__fortAmerican odds are no longer available on Novig. While percentages may not be native for sports fans today, moving away from sportsbook-style odds is another step toward building a product that looks like what it is: a financial market. We are committed to making the2:17 PM · Aug 27, 2026 · 138K Views81 Replies · 11 Reposts · 193 Likes
📖 Everything else you should know/read
What a fake poll reveals about worries around prediction markets and the midterms (NPR): “Rahil Prakash, who The Guardian revealed to be the man behind the fake polling outfit, does have an account on Kalshi. But when the company dug into his activity, it did not find that he put money down on any of the races related to his fabricated polls, according to two people with direct knowledge of his trades who were not authorized to speak publicly.”
A startup bet on Kalshi that Houston will hit 103 degrees this summer. It hopes to lose. (Houston Chronicle): “Houston is at the center of a first-of-its-kind deal to protect companies against fallout from the city’s punishing summer heat: a bet that the temperature will hit 103 degrees in August. If it does, risk-management startup Discrete will walk away with $25,000, almost four times what it put into the trade brokered by Houston-based Greenlight Commodities. The company’s leaders think they’ll come out ahead, even if they lose the bet.”
Texas Tech QB Case Shows NCAA Sports Betting’s Governance Problem (Bloomberg Law): “Sorsby also illustrates the challenges universities face when enforcing sports-betting rules against athletes. But institutions face a related problem on the other side of the equation. Wagering venues have vastly expanded, and the rules governing those products aren’t uniform. Prediction markets, which allow someone to buy a contract based on whether an event will occur, are the clearest example.”
“College sports can’t keep wagering outside the gates. The more realistic task is ensuring that institutions know which rules apply; what information requires protection; and who makes decisions when NCAA rules, courts, conferences and new betting markets point in different directions.”
From Substack:
Rocha: Kalshi Could Become Regulated Sports Betting Operator (Legal Sports Report): “Victor Rocha, Conference Chair of the Indian Gaming Association, believes there’s a world in which Kalshi could become a regulated sports betting operator in the future.”
"‘Mark my words, Kalshi is going to pivot to sports betting, because that’s where the money is,’ Rocha said on The New Normal podcast on Wednesday.”
Eddie Teare urges Isle of Man to consider prediction market sector (NEXTPredict): “Teare raised the idea while discussing what a future government should consider to strengthen the economy with Manx Radio. He said the island needed to identify potential new sectors rather than watch established industries decline.”
“Teare pointed to a recent gaming company decision to surrender its Isle of Man license. The company retained licenses in Jersey and Malta.”
