Americans view prediction markets as gambling, not trading
US research into the public’s attitudes toward prediction markets such as Kalshi and Polymarket suggests many Americans see them as closer to gambling than investing.
The survey, which was conducted by market research firm Ipsos and the American Institute for Boys and Men, found that 61% of those polled believe trading on prediction markets resembles gambling, while only 8% view it as investing.
Ipsos surveyed 2,363 adults between February 27 and March 1, with the majority being men aged 18 to 24, according to Axios.
Young men are more at risk of developing gambling addiction, according to American Institute for Boys and Men policy lead Jonathan Cohen, who added that prediction markets are “particularly problematic.”
Speaking to Axios, Cohen said, “The harms of sports gambling are disproportionately concentrated among younger men, and so the prediction markets are clearly the new frontier in this conversation about sports gambling.”
However, Kalshi founder Tarek Mansour told Axios last year that sports-event contracts did not constitute gambling, adding, “If we are gambling, then I think you’re basically calling the entire financial market gambling.”
The comments come as concerns grow over the regulation of prediction markets. Some US states believe that prediction market platforms should be regulated by state gambling bodies, whereas operators like Kalshi and Polymarket maintain that they can operate nationwide as they are federally regulated.
Most recently, Arizona regulators joined the fray, with Kalshi suing the state to stop it from forcing it to shut down its operations.
Despite rising interest, public awareness remains limited. The survey suggests that broader familiarity with prediction markets could shape what lawmakers ultimately decide to do.
Charlotte Capewell brings her passion for storytelling and expertise in writing, researching, and the gambling industry to every article she writes. Her specialties include the US gambling industry, regulator legislation, igaming, and more.
Verticals:
Sectors:
Topics:
Dig Deeper
Related stories
2025/11/21: Financial trading firm Jump Trading hops onboard sports event markets trend
2025/12/02: Kalshi and Polymarket hit record US$10 billion trading volume for November
2025/11/28: Prediction markets expected to win big from Thanksgiving NFL matchups
2026/03/13: CFTC issues guidance to prediction markets on sports event contracts
2025/11/21: Financial trading firm Jump Trading hops onboard sports event markets trend
2025/12/02: Kalshi and Polymarket hit record US$10 billion trading volume for November
2025/11/28: Prediction markets expected to win big from Thanksgiving NFL matchups
2026/03/13: CFTC issues guidance to prediction markets on sports event contracts
The Backstory
Why this debate is breaking out now
Public skepticism toward prediction markets is arriving as the industry scales and collides with long-standing gambling rules. Over the past year, the two dominant platforms have posted rapid growth in trading tied to elections, sports and economic releases. In November, Kalshi and Polymarket set a combined record of about $10 billion in monthly volume, an expansion analysts called an emerging duopoly that feeds on retail participation and nonstop news catalysts. That surge, paired with fresh capital and broader integrations, has pushed the question at the center of today’s story into sharper focus: whether trading on these contracts is investing or gambling. The stakes are clear for platforms, investors and state regulators that are already testing their jurisdictional boundaries.
Momentum has also pulled the broader financial sector into the conversation, with trading firms and asset managers experimenting at the edges of sports and event-driven markets. That interest offers liquidity and legitimacy, but it also invites harder questions about market integrity, consumer protections and who gets to regulate what.
At the same time, state-level actions and court rulings have begun to outline a patchwork of interpretations that could determine where and how these markets operate, even as federal oversight bodies seek to define the rules from the top down. The result is a fast-growing market whose future hinges on how policymakers and the public answer a basic definitional question.
A market outpacing its rulebook
The growth story has been stark. In November, Kalshi led gains with spot volume jumping to $5.8 billion, while Polymarket climbed to more than $3.7 billion, according to The Block’s data cited in coverage of the record month. Analysts described the pair’s dominance as a de facto duopoly, reinforced by deeper platform integrations and a steady news cycle that kept traders engaged. Expansion has been matched by capital: Kalshi doubled its valuation to $11 billion after a $1 billion raise, while Polymarket announced high-profile partnerships and an $8 billion valuation tied to a strategic investment, signaling investor conviction in the model and its scale potential.
Yet growth has complicated the regulatory map. The Commodity Futures Trading Commission has sought to formalize oversight through advisories and consultations while reminding exchanges of their duties under the Commodity Exchange Act. At the same time, state gambling bodies have pursued cases that treat sports event contracts as wagers under local law. That tension sets up the current perception gap, where many Americans see gambling risk even as platforms and some investors argue the contracts resemble hedging tools or sentiment-driven trading.
Wall Street tests the waters
Institutional interest has added fuel. Chicago-based Jump Trading began creating markets on Kalshi’s sports event contracts, drawing on a history of sports trading that included a London team active on Betfair for more than a decade, as reported in a look at financial firms moving into event contracts. Jump also backed Sporttrade, framing the U.S. sports betting landscape as ripe for a market-style model. Other managers, including quant heavyweight Cliff Asness, have discussed exploring the space as the line between retail speculation and institutional market-making blurs.
That participation brings liquidity and tighter pricing to contracts that behave like yes-no derivatives. It also raises questions echoed in today’s survey findings: if professional traders treat these venues as markets, why do many retail users and a broad swath of the public view them as gambling? The answer may lie in product design. Sports and political contracts look familiar to bettors, and the payoff structure mirrors wagers even when wrapped in exchange-style mechanics. That optics challenge is hard to unwind, particularly when sports calendars and viral news drive activity spikes.
Sports as the volume catalyst
Sports programming has become a prime accelerant. Analysts at Piper Sandler projected November volumes of about $10 billion for Kalshi and Polymarket, with roughly 28% tied to NFL-related contracts, according to reporting on expected Thanksgiving week surges. Volume bumps were strongest when teams hailed from states without legal online sports betting, highlighting how event contracts can function as substitutes where sportsbooks are limited.
The NFL’s audience trends added to the momentum. Games averaged 17.7 million viewers through week 11, the highest since 2015, helping pull more casual users onto prediction platforms on marquee days. That attention loop created the conditions for rapid growth but also sharpened regulatory scrutiny. As sports volumes rise, the comparison to gambling becomes more intuitive for the public and for state regulators, which in turn shapes enforcement decisions and court outcomes.
Regulators draw their lines
Federal regulators have tried to get ahead of the risks while signaling openness to innovation. In an advisory to exchanges, the CFTC warned designated contract markets to scrutinize sports-related contracts vulnerable to manipulation, especially those based on a single player’s actions that resemble sportsbook prop bets. The guidance, part of a broader effort to build a framework for event contracts and invite public comment, underscored concerns around insider information and consumer safeguards. Those details were outlined in coverage of the new CFTC guidance, which landed during a wave of state challenges that argue certain contracts amount to illegal gambling.
The agency has also emphasized its enforcement reach. After Kalshi flagged and penalized traders for alleged violations, including a political candidate trading on a contract linked to his own prospects and an editor with potential inside knowledge on a media-linked market, the commission reaffirmed it can police misconduct such as fraud, manipulation and misuse of confidential information. The stance, detailed in a report on the CFTC’s authority, suggests a federal backstop even as over 50 court cases proceed nationwide.
What’s at stake for classification
How policymakers resolve the definition fight will determine who regulates event contracts, how products are designed and which markets survive. If more states classify sports event contracts as gambling, platforms face a patchwork of licensing and potential shutdowns within state lines, as seen in recent actions that included an Ohio ruling against certain Kalshi markets. If federal derivatives rules prevail, exchanges may gain a clearer, nationwide path, but they will need to meet market integrity standards that go beyond sportsbook norms.
The investment flowing from Wall Street and the record-setting activity on the largest platforms show there is demand for price discovery on real-world events. But public perception remains a moving target. As volumes rise and platforms cement their lead, the optics of sports-heavy contracts and prop-like structures could continue to color how voters and lawmakers view the sector. The outcome will hinge on whether regulators can draw lines that protect against manipulation and addiction risk without choking off a market that many traders now treat as a new venue for expressing views on politics, sports and the economy.
