Prediction market platforms Polymarket and Kalshi are facing regulatory challenges outside of the United States, with authorities in Taiwan, France, and Singapore viewing them as unlicensed gambling operations. However, in the US, prediction markets are considered investment tools rather than gambling because they are designed for forecasting outcomes based on probabilities. The Commodities Futures Trading Commission regulates prediction markets as event contracts. While both Polymarket and Kalshi have had disputes with the CFTC, Kalshi has gained permission to offer election-based event contracts and has enlisted Donald Trump Jr. as an advisor. Despite criticisms, Polymarket has seen significant post-election success, with $1.6 billion in monthly volume. However, much of this volume comes from sports-themed prediction market contracts, leading to comparisons with online sports betting. Jurisdictions like Singapore, which have licensed online sportsbooks, may instigate bans on prediction markets, while state-level gaming regulators in the US could also take interest. Nonetheless, there may be room for sports-themed prediction market contracts, particularly related to valuable broadcasting rights in the media industry.



Other News from Today