WASHINGTON, D.C.— Benjamin Schiffrin, Director of Securities Policy for Better Markets, issued the following statement in connection with Better Markets’ new Fact Sheet entitled “Predictably, ‘Prediction Markets’ Are Just Casinos”: 

“So-called ‘prediction markets’ operated by firms like Kalshi and Polymarket are not genuine markets. They’re unregulated gambling platforms that function like casinos. These firms disingenuously use the label ‘prediction markets’ to avoid longstanding state gambling laws designed to protect consumers, detect manipulative betting patterns, and prevent crime. 

“Despite claims from these prediction market platforms, prediction markets also fail to predict the future. Their users are ordinarily no more likely to know who will win an election or a sporting event than anyone else. But because insiders can use these sites to profit from their knowledge, they lend themselves to manipulation and insider trading. Look no further than the recent Polymarket user who bet big – and won—on an unlikely trade predicting that Maduro would shortly be deposed. The incident bore all the hallmarks of an insider trade. 

“For these reasons, prediction markets must be properly regulated. Yet Kalshi and Polymarket claim they should be regulated by the CFTC, the financial regulator for the derivates market. The CFTC is ill-suited to regulate what is essentially gambling activity. Recent federal court decisions bear this out, as several judges have found these sites indistinguishable from gambling. Policymakers should follow the lead of these courts. Prediction markets should be recognized for what they are—unregulated, 24/7 casinos. They must be regulated as gambling operations to protect the public before it’s too late.” 

Read the fact sheet here. 

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Better Markets is a non-profit, non-partisan, and independent organization founded in the wake of the 2008 financial crisis to promote the public interest in the financial markets, support the financial reform of Wall Street and make our financial system work for all Americans again. Better Markets works with allies—including many in finance—to promote pro-market, pro-business and pro-growth policies that help build a stronger, safer financial system that protects and promotes Americans’ jobs, savings, retirements and more. To learn more, visit www.bettermarkets.org.