The Super Bowl is the most watched sporting event in our nation, with family gatherings, cookouts, and excited fans. Yet, for many young people it was only another opportunity for gambling companies to exploit them.
While traditional sports betting has been a strong subject of debate, gambling companies have exploited a unique loophole through what has been referred to as “prediction markets.” In this model of sports gambling, participants treat outcomes like a stock future. Instead of betting directly against the sports betting company, outcomes are traded between users.
The key difference between traditional sports betting law and prediction markets like Kalshi is that while sports betting is regulated as a gambling issue, Kalshi and other prediction companies are regulated like a stock future. The fundamental difference of course is that instead of investing in a company with real value behind it, participants are betting on an outcome.
The extent of this was on full display last week at the Super Bowl. Some participants even gambled on the outfit that Bad Bunny would wear during the halftime performance, what companies will run ads, and even what *words* will be used by the sports announcers. Because these are outcomes traded between users rather than just against the gambling company and the user, almost anything can be gambled on. Some young gamblers lost tens of thousands of dollars on Super Bowl Sunday alone.
The variety, easy availability, and high risk of prediction market gambling all contribute to the same factors that make traditional sports betting addictive and destructive. In addition, many of these platforms deliberately target young people with the promise of “easy money,” such as by comparing how much money a college student could make through gambling in an hour versus an hourly wage. Furthermore, many of these platforms do not require any real age verification at all. Thus, we can see that these platforms are not just interested in the customer that does an occasional wager on a sports game, they are cultivating lifelong gambling addicts, starting at an early age.
Due to the relatively new nature of these platforms, many states are still exploring what options they have to limit the damage. While most of the industry is regulated by the federal Commodity Futures Trading Commission, states like Alabama could, at a minimum, potentially look into age verification requirements for these platforms.
We are sharing this info as a resource for people to be aware of the dangers behind this growing problem. ALCAP will continue to advocate against predatory companies that profit off of gambling addiction.