Is Sports Betting Legal? It’s a Prediction Market in Some States
In recent years, the legality of sports betting has been a subject of considerable debate across the United States. While certain states embrace it, others remain firmly against it. Among the latter is Minnesota, where online sports betting is still illegal.
Emergence of Prediction Markets
Despite state laws, individuals like Ian White, a special education paraprofessional, are exploring alternatives. White uses Kalshi, a prediction market app, which allows users to make financial predictions tied to the outcomes of sporting events. After seeing advertisements for Kalshi on TikTok, he decided to give it a try.
How Kalshi Differs from Traditional Sportsbooks
Kalshi operates under a unique framework. Rather than being classified as a traditional sportsbook like FanDuel or DraftKings, it markets itself as an exchange for financial products related to sports outcomes. This distinction is crucial, as it allows Kalshi to bypass the gambling laws that restrict traditional sports betting in various states.
- Kalshi is available nationwide due to the support of the Trump administration.
- In September 2024, over $2.5 billion in sports contracts were traded on Kalshi.
- By contrast, online sportsbooks took in approximately $14 billion in the same month.
Public Skepticism and Regulatory Challenges
Kalshi’s rise comes amid growing scrutiny of legal gambling, with a significant portion of the American population expressing skepticism. A recent Pew Research poll indicated that 43 percent of adults view legal sports betting negatively, while only 7 percent believe it benefits society.
Criticism of Kalshi is also emerging from various quarters, including politicians in states with both legal and illegal gambling frameworks. Senator Catherine Cortez Masto, a Democrat from Nevada, voiced concerns about Kalshi’s operations. She argued that the platform is simply a rebranding of sports betting, which undermines regulatory efforts in states that have established regulated frameworks for sports wagering.
Conclusion
The discussion around sports betting and prediction markets like Kalshi is likely to continue as public opinion evolves. With many states grappling with the implications of legal gambling, the future landscape of sports betting remains uncertain.
