Better Markets Director Dubs Kalshi, Polymarket Unregulated Gambling Sites
Summary
Benjamin Schiffrin, director of securities policy at non-profit Better Markets, has published a report arguing that platforms such as Kalshi and Polymarket are essentially unregulated casinos rather than legitimate prediction markets. Schiffrin contends these sites use the “prediction market” label to sidestep state gambling rules while falling under Commodity Futures Trading Commission (CFTC) jurisdiction, which he says is ill-suited to policing gambling-like activity.
Schiffrin argues prediction markets do not reliably forecast outcomes, can enable insider trading, lack the consumer protections of regulated markets and operate round-the-clock without state gambling oversight. He points to recent court decisions — including a Massachusetts order restricting Kalshi’s sports contracts — as evidence judges increasingly view these platforms as gambling. Schiffrin urges policymakers to treat and regulate them as gambling operations to protect the public.
Key Points
- Better Markets’ Benjamin Schiffrin calls Kalshi, Polymarket and similar platforms “unregulated gambling platforms that function like casinos.”
- Operators label themselves “prediction markets” to argue they fall under CFTC jurisdiction and so avoid state gambling regulation.
- Schiffrin says prediction markets do not reliably predict outcomes and can allow insiders to profit from non-public information.
- The CFTC lacks the consumer-protection focus of gambling regulators, creating regulatory gaps, he argues.
- Recent court rulings (eg. a Massachusetts judge blocking Kalshi’s sports contracts) support the view that some courts see these services as gambling.
- Schiffrin recommends policymakers follow the courts and regulate prediction markets as gambling to protect consumers and curb abuse.
Context and Relevance
This critique arrives amid growing state-level scrutiny of prediction markets: Massachusetts, Nevada and other jurisdictions have recently taken legal or regulatory action targeting Kalshi, Polymarket and similar operators. The dispute centres on whether these platforms are financial markets or gambling products — a classification that determines which regulators apply, what consumer protections exist and which activities are permitted in each state.
If Schiffrin’s recommendations gain traction, operators could face tighter rules, licensing requirements, trading restrictions or state-level bans. That would affect market access for users, commercial partners (including sports and media firms) and the broader fintech and iGaming ecosystem that has engaged with these platforms.
For regulators, the issue raises familiar tensions between innovation, federal vs state jurisdiction, and protecting consumers from insider abuse and gambling-related harms.
Why should I read this?
Because it tells you straight: these prediction sites are under legal fire and could change quickly. If you use, partner with, invest in or cover Kalshi/Polymarket, this is one of those short sharp reads that flags real regulatory risk and likely shifts in how these platforms will be treated. Worth a five-minute skim if you want to avoid surprises.