Published on: January 26, 2026, 07:53h.
Updated on: January 26, 2026, 07:53h.
- Director of Better Markets claims Kalshi and Polymarket aren’t “true markets”
- Critiques the term “prediction market” as misleading
- Argues that CFTC inadequately regulates prediction markets
A public policy analyst suggests that prediction markets are fundamentally similar to casinos, local bookmakers, and other gambling platforms.
In a recent analysis titled “Predictably, ‘Prediction Markets Are Just Casinos,’” Benjamin Schiffrin, Director of Securities Policy at Better Markets, asserts that prediction markets function like casinos. He joins a growing number of critics who claim that platforms such as Kalshi and Polymarket utilize the term “prediction market” to bypass state gaming regulations.
“Prediction markets are virtually indistinct from casinos, local bookmakers, or any gambling application,” Schiffrin remarks. “They label themselves as prediction markets to evade the stringent regulations established by states to protect consumers and curtail organized crime’s involvement.”
While the descriptor “financial predators” may appear severe, Kalshi is currently facing a class-action lawsuit in which litigants argue the company exploited clients with troubling betting behaviors while presenting itself as a safer alternative to conventional sports wagering. Schiffrin observes that prediction markets do not accurately reflect the broader populace; typically, bettors on these platforms are predominantly young men, a demographic with a higher susceptibility to problematic betting habits.
Prediction Markets Are ‘Not Authentic Markets’
Schiffrin contends that prediction markets lack the foundational realities found in equity, fixed income, or traditional financial marketplaces.
“Authentic markets are meticulously regulated to ensure fairness, facilitate genuine trading, and protect participant interests,” Schiffrin comments. “In contrast, these so-called prediction markets function without such safeguards.”
Following controversies related to insider trading—especially linked to tech product launches and the recent US intervention in Venezuela—Schiffrin emphasizes that it’s challenging for bettors to profit in yes/no exchanges without insider knowledge.
“Kalshi and Polymarket argue that revealing the ‘crowd’s’ predictions offers insights that surpass polls or forecasts,” he notes. “However, without insider intel, users on these platforms are no better equipped to predict election outcomes or game results than anyone else.”
Currently, prediction markets lack the insider trading regulations that govern stock and bond markets, although some lawmakers are advocating for changes in this area.
CFTC Lacks the Capability for Adequate Regulation
The Commodities Futures Trading Commission (CFTC) oversees prediction markets, and the industry highlights this governance as a means to operate nationwide without the need for state gaming permits.
Schiffrin asserts that the CFTC is ill-prepared to regulate what is fundamentally a new category of gambling, supported by several court rulings.
“Numerous judges have determined that these platforms are indistinguishable from gambling activities,” he concludes. “Policymakers must heed these judicial findings. Prediction markets should be acknowledged as unregulated, continuous casinos and should be governed as gambling establishments to safeguard the public before it’s too late.”