If you believe the multibillion-dollar firms behind “prediction markets” and the individuals who are handsomely paid to promote them, two things are absolutely clear: These exchanges are not gambling, and they certainly don’t prey upon young or vulnerable people. But many lawmakers, as you might suspect, don’t seem convinced. Undeterred, the industry has been furiously adding to its roster of lobbyists and advocates over the past year, hoping to build on the Trump administration’s support, which is no doubt founded partially on Donald Trump Jr.’s positions at both Kalshi and Polymarket. But support from the administration and the first family does not seem to be enough, and the prediction market industry has been mobilizing an effort to ensure incipient attempts to rein in the industry die in the cradle. Key to these efforts are prediction market advocates who cut their teeth working on behalf of addictive industries in the past.
Prediction markets are bracing for a drawn-out fight, and they’ve staffed their front group with executives well versed on issues of gambling and addictive products. The Coalition for Prediction Markets, or CPM—a trade group backed by some of the largest players in the prediction market industry, including Kalshi, Coinbase, Crypto.com, Robinhood, and Underdog—has recruited a bipartisan dynamic duo of influential former congressmen to be the faces of the industry. In addition to the political firepower, CPM added an influential former gambling industry advocate and a former vaping executive to help manage the organization’s direction.
Prediction markets, which offer customers a chance to wager their money on uncertain outcomes in return for payouts from correct predictions, have claimed exemption from state and local gambling laws. They’ve managed to dodge regulations despite the fact that many of the predictions made on these platforms are on the outcome of sporting events, with one measure finding that up to 90 percent of trading volume on Kalshi, the industry’s largest domestic player, comes from sports.
While this might sound like gambling to you or me, in the eyes of the industry, and of the Trump-controlled Commodities Future Trading Commission, or CFTC, the products offered by these firms are not gambling but swaps—sophisticated investment products that are regulated solely by the CFTC. State and local governments disagree. Forty-one state attorneys general have challenged this claim, with Minnesota going so far as to pass a law banning them, while Arizona’s attorney general filed criminal charges against Kalshi.
Despite claims that prediction markets operate as investment tools, they are not sound investments for the average person. An analysis from The Wall Street Journal recently found that just 0.1 percent of accounts on Polymarket earn 67 percent of all profits on the platform, and that there are nearly three unprofitable accounts for every one that makes money on Kalshi. In one study, users of prediction markets were worse off, on average, than customers of traditional sports books.
With lawmakers, regulators, and even the general public turning against the industry due to its avoidance of state laws, the industry banded together last December to launch CPM. The organization is headed by a onetime rising star of the Democratic Party, former Congressman Sean Patrick Maloney, who had advised Coinbase prior to his 2024 assumption of the ambassadorship to the Organization of Economic Co-operation and Development. At his side is former Republican Congressman Patrick McHenry. The onetime chair of the powerful House Financial Services Committee, McHenry has turned to advising financial firms since he left office in January 2025. At last count, McHenry held seven positions at financial firms, including four where he served as a “senior adviser,” counting CPM. Together, Maloney and McHenry are the bipartisan tag team tasked with protecting prediction markets from the dreaded threat of being regulated like gambling.
In its campaign to achieve the joint goals of ensuring every American has access to a prediction market and blocking states from regulating them, CPM has shared a series of misleading facts about the nature of the predictions market industry. In one graphic, the organization touts that “nearly half of all adults under 45 have participated in an online financial or prediction market.” Key to this claim is the inclusion of other online financial markets, which could presumably encompass not only cryptocurrency exchanges but also run-of-the-mill investment accounts or even retirement accounts accessed via the internet.
Other claims promoted by CPM seem even more dubious. In another graphic, CPM states that “70%+ of voters agree financial markets and gambling are not the same and shouldn’t be regulated alike.” This number is not linked to any polling, and it differs wildly from recent polling by Ipsos, which found that 61 percent of Americans felt prediction markets were closer to gambling than investing, with a scant 8 percent believing that event contracts on prediction markets were closer to investing.
Other polling results have also differed wildly from CPM’s assertions. The same Ipsos poll found that a mere 21 percent of Americans reported being even somewhat familiar with prediction markets, a stark contrast to the 50 percent of people under 45 who CPM would have you believe are not only aware but participating in them. The Coalition for Prediction Markets did not respond to questions about how it arrived at numbers so out of step with public polling figures. Only 3 percent and 2 percent of respondents had heard of the prediction market firms Kalshi and Underdog, respectively. But the negative polling hasn’t prevented CPM from mounting a robust defense of the industry.
When McHenry testified on behalf of CPM before the Senate Subcommittee on Consumer Protection, Technology, and Data Privacy in mid-May, he was pressed by senators on both sides of the aisle about the business practices of the prediction markets industry. Colorado Senator John Hickenlooper asked McHenry about a recent lawsuit that alleges that Kalshi has used social media influencers as young as 15 years old to promote its products, and Senator Marsha Blackburn grilled McHenry about the industry’s use of social media advertisements that may reach children.
Despite the respect he still commands on Capitol Hill after two decades in Congress and holding some of the most influential positions in the House of Representatives, McHenry seemed to struggle to answer. But to his colleague on the board of CPM and the chief corporate affairs officer of Crypto.com, Matt David, presumably watching the event transpire from the sidelines, questions along these lines might have felt oddly familiar.
Before David joined Crypto.com in 2021 as the company’s chief communications officer, he worked for Juul Labs, the company that helped bring nicotine vapes to mainstream popularity, particularly among young people. When the company came under scrutiny by state and federal regulators for allegedly advertising its product to minors and representing them as safer than cigarettes in 2019, David was serving as the company’s spokesperson and chief external affairs officer. Given the public outcry at how quickly Juuls became ubiquitous in high schools (to the extent that the company’s name became a verb, juuling), David’s job largely consisted of trying to protect the firm’s media profile by denying Juul’s role in getting kids hooked on nicotine vapes.
When confronted with public anger toward the company, David insisted that Juul’s product, much like Kalshi, was merely angering people because of its Silicon Valley–esque “disruption” of traditional business methods. “Like many Silicon Valley technology startups, our growth is not the result of marketing but rather a superior product disrupting an archaic industry,” he told CNBC when asked about an inquiry by the Massachusetts attorney general into underage use of Juul vapes.
When Juul’s rapid growth attracted attention to the growing number of people, especially young adults and children under the age of 18, using nicotine products, Juul’s defense became that the company was offering an alternative to the dangerous use of cigarettes. In 2019, David told the Los Angeles Times that Juul was “work[ing] cooperatively as we continue to combat youth usage and eliminate cigarettes.” This was despite the fact that the previous year, Altria, the parent company for tobacco giant Philip Morris, had purchased a 35 percent stake in Juul, something that would likely disincentivize the firm from aggressively shrinking the market of cigarette smokers. In 2018, David himself admitted that efforts to persuade existing smokers to switch to Juul had been largely unsuccessful, though he did not stop using the “healthier option” excuse in his communications going forward.
In many ways, this effort mirrors that of prediction markets today, which claim to offer a different, better product for their customers than traditional gambling. But the rise in prediction markets has not led to a decline in gambling addiction, nor does it truly offer its customers a healthier option to gambling. According to one analysis, users of prediction markets were more likely to lose money than users of traditional sports books, while the risk of gambling addiction remains—in fact, prediction markets, as financial products, do not participate in state-run voluntary exclusion programs designed to keep problem gamblers from accessing the products to which they are addicted.
Prediction markets, like Juul before them, have a younger pool of consumers. Because federal law allows anyone over 18 to invest in financial markets, prediction market firms are open to adults who would otherwise have to wait until they are 21 to access state-regulated sports books or visit a casino. Advertisements run by prediction market firms also seem to encourage risky behavior, in campaigns targeting young people looking to strike it rich. Posting about Kalshi’s March Madness promotion, its CEO said, “You owe it to your grandchildren” to make “generational wealth.” In other advertisements, Kalshi has promoted risky bets by telling consumers, “I would put everything I own on this.” Another ad featuring a young college-age woman in a TikTok video, accompanied by two smiley face emojis surrounded by hearts, says, “POV: I was about to be unable to pay my rent, but I got two years of rent through Kalshi’s predictions. It’s amazing.”
While David’s past experience is potentially indicative of how prediction market firms believe the fight over their product’s legality will go, so too is that of the other board member listed on the CPM website, Sara Slane. Prior to joining Kalshi in 2025, and CPM in 2026, Slane spent almost two decades working in the gambling industry as an executive for MGM and the American Gaming Association, and running her own consultancy where she worked with sports leagues and gambling firms. Slane takes personal credit for helping organize the sustained campaign that eventually saw the Supreme Court overturn the nearly 30-year-old federal ban on sports betting in all but a select few jurisdictions. For this, Slane received numerous awards from the gambling industry, including being inducted into the sports betting hall of fame, being named to the Sports Business Journal “40 under 40,” and being listed in The Hill’s top lobbyists of 2018.
Despite spending years arguing in public and before Congress that sports betting regulation was best left up to states, Slane has been forced to take the opposite tack in her new role with the prediction market firm. With state regulation being a threat to the loophole that Kalshi depends on, federal regulation by the CFTC is the only acceptable outcome for prediction markets. Slane’s old employer, the American Gaming Association, the preeminent gambling trade group in the country, has also become one of the most implacable opponents of the prediction markets industry, as its members are forced to compete with an industry that has declared itself exempt from the state and local gambling regulations to which they must adhere.
The way in which the prediction market industry has filled the ranks of the Coalition for Prediction Markets reveals how it expects this fight to proceed. Prediction markets expect the backlash to their products to be similar to the original backlash to vapes: anger and outrage at first that slowly dies down as lawmakers accept that the battle has been lost and a new generation has become addicted to a vice we thought was on permanent descent. If the gambling industry was able to legalize widespread sports betting after decades of severe limitations, what is to limit the prospects of prediction markets doing the same while sidestepping the onerous state and local regulations that slightly mitigate gambling’s depredations?
