Study Shows 85% of US Public Think Prediction Markets Are Like Sportsbooks

The American Gaming Association revealed a new study on the public consensus surrounding sports events contracts. The goal of the study was to determine how the US public feels about these products. More specifically, if they are seen as gambling or if America thinks prediction markets are financial trades.

85% of respondents said they think sports event contracts are a form of gambling, similar to sports betting. While this does potentially throw some heat by way of prediction market exchanges, it is important to understand where they are coming from.

As it is no secret that prediction markets are a hot topic among US bettors. Especially among NFL bettors and college sports fans. More sports-related markets have cropped up in recent months on these prediction markets. And pundits reckon the 2025-26 NFL season will bring a huge volume of bettors to the exchanges. Some sportsbook brands have also publicly expressed interest in the up and coming industry.

Over 8 in 10 Want Prediction Markets Regulated

The research continued. 80% of the questioned people think that prediction markets should be regulated in the same way as sportsbooks. 57% of people agreed strongly with sports betting-like regulation for prediction markets, and a further 25% agreed “somewhat”.

When asked if prediction markets are exposing a loophole, and providing sports betting products, only 70% of the respondents agreed. The next question was whether prediction markets should be rolled into in-state sportsbooks. That means, prediction markets can only offer these sports trades if they are offering those products in the framework of a sportsbook. This got a high 84% vote.

The survey went into finer details on the latter, asking whether the CFTC should regulate the markets, or whether it should be regulated by each state, and the tribal gaming regulators. Again, 65% backed the state over the federal CFTC.

To summarize:

• 85% – Event contracts are gambling
• 84% – Prediction markets should trade “inside” online sportsbook platforms
• 80% – These markets should be regulated like sportsbooks
• 70% – Prediction markets are exposing a loophole
• 65% – States should take over from the CFTC and regulate the markets

What to Take From the Poll

The online poll ran from August 1 to 8, and 2,025 respondents took part in it. They were all adults aged over 18, and registered voters. The survey was conducted by YouGov, and the findings were published by the American Gaming Association. Ben Miller, the President and CEO of AGA, stated:

“With sports betting operational in 38 states and Washington, D.C., consumers expect prediction markets to follow the same rules and safeguards as state-licensed sportsbooks. This research makes clear: Americans know a sports bet when they see one—and they expect regulators and policymakers to treat them accordingly.”

Before reading too much into the research, it is important to note that just over 2,000 people took part in the study. It is by no means a nationwide opinion, nor one that speaks for the entirety of Washington DC, where the poll was taken.

Prediction Markets on the Rise

This survey was made well before FanDuel expressed interest in launching a prediction market. The respondents wouldn’t have known about Polymarket getting the greenlight to return to the US either. Throw in the facts that Predictit got the go ahead from the CFTC, and will finally enter the US.

The NZ based company did run in the US, but, like Polymarket, it was forced to leave. That is, until Predictit was cleared just recently to come back to the USA, with licensure and permissions from the CFTC.

Kalshi, which has long held approval from the CFTC and has built a sturdy reputation in the US, made a major move in anticipation of the NFL season. Now, the prediction exchange also offers event contracts with multiple event possibilities. In sports betting terms, it is basically a parlay bet.

Though we should note, you can’t assemble or build parlays here, only decide to bet Yes or No on the prebuilt event contracts. And each contract needs buyers and layers to become active. Just like P2P betting exchanges, only prediction markets cover a wider scope of topics.

How Prediction Markets are Regulated

Right now, sports event contracts and prediction markets are governed by the federal CFTC. The Commodity Futures Trading Commission is a government agency, launched in 1974, to regulate the nation’s derivatives markets. Winnings from the prediction market are considered taxable income by the IRS. That means participants have to pay federal tax on any money they make from winning predictions.

The courts have ruled that contracts in regulated prediction markets are legal, and they extend to areas where even the USA’s biggest sportsbooks don’t. For example, prediction markets were heavily used in the 2022 and 2024 US Presidential Elections. These are fully allowed by law, with election-related contracts permitted so long as the prediction market is properly regulated.

Also, licensed prediction markets can also trade with cryptocurrencies. That means, effectively, funding sports predictions with crypto. Polymarket uses USDC, a federally regulated stablecoin backed by the US dollar. It uses USDC on the Polygon network for transactions. Crypto.com has a prediction market that accepts USD and BTC for contract trading.

Sports Brands Bet Big on Prediction Markets

For the time being, there are no indications to suggest prediction markets will be regulated like sportsbooks. The CFTC has given the green light to several platforms to go live in recent months, and the market is still in its infancy.

While FanDuel and Underdog have both made moves to launch prediction markets of their own, not all sportsbook operators feel the same way. CEO, Jason Robins, stated that prediction markets are a significant opportunity in cracking states where sports betting is not yet legal. He did not have to mention the states he had in mind, which will no doubt be Texas and California, for their sheer size and potential betting market. But he also indicated that it would be difficult for DraftKings to create a product that has an offering like the DraftKings sportsbook.

State regulators have also expressed their concerns about prediction markets. And another community that is worried about the implications are the tribal entities, who are worried that the prediction market operators may infringe their rights. Recently, the tribal nation of Ho-Chunk in Wisconsin filed a lawsuit against Kalshi and Robinhood markets.

It is definitely controversial, and while flexible right now, the CFTC and state authorities will no doubt follow the space closely.

Predicting What’s Next for Prediction Markets

If the products are too similar to gambling, it may see responsible gambling initiatives roll out in the near future. Further rulings against these markets may lead to potential clampdowns and restrictions down the line. For the time being though, we would stress the importance of investing wisely in prediction markets. Whether you think they are in fact like sportsbooks or not.

There are risks, and when buying contracts, you run the same danger of losing your money. So trade only with what you are comfortable to lose, and practise caution if you trade on prediction markets.