Public Resistance Puts US Prediction Markets Under Pressure

Six out of ten Americans oppose using prediction markets to wager on election results, according to a recent Reuters/Ipsos poll. This opposition adds a challenge to officials as they debate how to regulate the industry. The survey of 4,506 US adults nationwide, conducted from September 30 to October 5, shows that opposition to political-event betting crosses party lines, with 69% of Democrats and 61% of Republicans against it.

The poll found that 65% of respondents also opposed betting on US military actions, while 63% opposed wagers on government policy announcements or decisions. Only 8% supported betting on military actions and 9% supported policy markets. Polymarket and Kalshi are companies that offer markets on real-world events like elections, alongside sports.

They claim they have safeguards against misconduct and work with authorities to address any issues. According to the survey, 93% of Democrats and 89% of Republicans believe it is inappropriate for members of Congress or their staff to bet on political events. In April, the Senate prohibited senators, staff, and other officers from using prediction markets, and Democratic lawmakers have introduced bills to restrict the industry.

These efforts are driven by concerns that political-event markets could enable insider trading or manipulation, and that trading on government affairs could pose national-security risks. Some lawmakers have called for stricter safeguards in the prediction market industry. While views on professional sports betting through prediction markets are less opposed, still divided, with 43% against and 29% in favor.

Overall, three-quarters of respondents consider wagering on real-world events through prediction markets as a form of gambling, while 8% disagree. Polymarket argues that its markets offer information about events and that most visitors to its platform are there to view markets rather than trade. The poll provides a snapshot of public sentiment, rather than determining whether the contracts are legally gambling or should be permitted.

Federal and state regulators are at odds over which framework applies, with the CFTC asserting jurisdiction over the contracts as financial products and state regulators arguing that prediction markets facilitate gambling and should be subject to state gaming laws. This legal dispute could potentially reach the Supreme Court, according to legal experts cited by Reuters.

Until a resolution is reached, the poll highlights a political aspect of the debate, which will influence how operators like Kalshi and Polymarket can provide event contracts in the US.