Prediction Markets Are Quietly Eating the NFL
Prediction platforms like Kalshi and Polymarket are pouring money into NFL markets while fighting regulators and the league itself over whether event contracts are investing or gambling.
The NFL season is becoming the biggest battleground in the fight over prediction markets, as platforms like Kalshi and Polymarket pour money into sports contracts while regulators, states, and the league itself push back.
Prediction markets let users trade on real-world events, from Federal Reserve decisions to pop culture. But the NFL season is showing how much the industry's growth now depends on sports [259793]. The two leading platforms, Kalshi and Polymarket, are expanding their event offerings even as they avoid state regulations [259301].
The industry is drawing serious money and a new generation of traders. Young trading firms are becoming major players on platforms like Kalshi and Polymarket, raising capital to grow bigger as what was once a niche space attracts a new class of participants [255894]. Combo contracts, which let traders bet on multiple outcomes at once, are driving volume growth, though they remain a small share of all transactions [255843].
Regulators are moving in. The Commodity Futures Trading Commission (CFTC) has proposed expanding the definition of swaps to include prediction markets trading. Under the proposal, the term "swap" would cover event contracts tied to sporting, political, cultural, and weather-related events [258683].
The NFL has taken its own position, telling the Supreme Court that sports prediction contracts are gambling and should be regulated by the states. In an amicus brief, the league backed New Jersey regulators in their fight against Kalshi, arguing the contracts are effectively sports betting, which states have the power to regulate [257331].
The legal fight is not the only sign of blurring lines. New exchange-traded funds (ETFs), which are baskets of investments that trade like a stock, now let people invest in the on-field performance of Major League Baseball (MLB) and National Hockey League (NHL) teams. Experts say these products look more like gambling than traditional investing and warn they push retail investors toward risky betting [257336]. One such fund tracks the New York Yankees, with critics calling it another form of gambling and supporters calling it a way to own a piece of a beloved team [255948].
Platforms are also expanding beyond football. X is turning its Gametime feature, once focused on the NFL, into a year-round sports destination, with MLB as the first addition and other professional leagues to follow [256966].
Even politics remains in play. Kalshi is reviewing a series of trades that correctly predicted President Trump would choose Katie Zacharia as his new White House Press Secretary, a pick that was not considered a leading candidate before the announcement [258664].