Key facts
- Prediction market platforms are expanding rapidly across the US, including in states where gambling is illegal.
- Companies like Kalshi and Polymarket claim federal oversight by the CFTC as 'event derivatives', not state-level gambling regulation.
- Donald Trump has publicly supported the CFTC's exclusive jurisdiction over these markets.
- Public health advocates and addiction researchers warn that resources for problem gambling are inadequate to meet the growing demand.
- There is currently no dedicated federal funding for gambling addiction prevention or treatment in the US.
- The National Council on Problem Gambling reports a significant increase in calls from states with limited legal gambling, like Utah.
Public health resources in the United States are struggling to keep pace with the rapid expansion of online gambling, particularly prediction markets, according to health advocates. These platforms, where users can wager on a wide range of events, have seen significant growth following the Supreme Court's 2018 decision to overturn the federal ban on sports betting. Major prediction market operators like Kalshi and Polymarket are actively advertising and operating across the country, including in states that have historically prohibited gambling.
Companies such as Polymarket and Kalshi assert that they are not traditional gambling operators but rather offer 'event derivatives' that fall under the federal jurisdiction of the U.S. Commodity Futures Trading Commission (CFTC). This distinction has allowed them to operate nationwide, even in states like Utah and Hawaii. However, numerous lawsuits are challenging this interpretation, arguing that these platforms should be subject to state gambling laws. Donald Trump has publicly supported the CFTC's claim of exclusive authority, stating it is "critically important" to protect the industry.
A CFTC spokesperson affirmed the commission's exclusive jurisdiction over swaps, including prediction markets, under the Commodity Exchange Act, aiming to prevent a fragmented legal landscape. Despite ongoing legal battles and the sector's boom, experts like Timothy Fong, an addiction psychiatrist at UCLA, warn that gambling addiction is escalating. Fong highlighted the disparity in public funding, noting California spends significantly more on tobacco and alcohol harms than on problem gambling.
Currently, there is no dedicated federal funding stream for gambling addiction prevention or treatment in the US. States where gambling is illegal often have limited or no public funding for such issues. In Utah, for instance, despite strong anti-gambling laws, the NCPG helpline has received thousands of calls from residents seeking assistance. Many individuals suffering from gambling harm do not seek help, enduring their struggles quietly.
Advocates emphasize the need for accessible support infrastructure, especially in states lacking a formal safety net for gambling addiction. They argue that lawmakers must recognize that residents engage in risky trading and betting behaviors regardless of legality. While some states fund problem gambling resources through tax revenue from legal casinos, advocates suggest general budgets could also be utilized. The NCPG supports the Points Act, a proposed federal bill that would establish the first dedicated federal funding for gambling addiction prevention and treatment.