Democratic Congressmen Ask FTC to Investigate “Prediction Markets” Over Deceptive Trade Allegations
Earlier this month a group Democratic congressmen called on the Federal Trade Commission (FTC) to investigate whether “prediction markets” are engaging in deceptive trade practices.
Gambling has exploded across the U.S. in recent years, and studies show more than half of men ages 18 – 49 now have an active sportsbook account online. But experts are sounding the alarm over internet gambling and federally regulated “prediction markets” that many say are just as addictive as other forms of gambling but not accountable to state gambling laws.
Prediction markets like Polymarket and Kalshi exploit loopholes in federal law to bring casino-style gambling to anyone with a smartphone. The companies running these platforms claim it’s not gambling. They just offer “financial products” that let people “invest” in the outcome of a ballgame, tomorrow’s weather, foreign policy, and so on. But calling it an “investment” does not change what it is: Gambling.
On June 3, a group of congressmen led by U.S. Reps. Kevin Mullin (CA-15) and Gabe Vasquez (NM-02) sent a letter urging the FTC to investigate whether online “prediction markets” are misleading consumers by engaging in unfair and deceptive trade practices.
The letter alleges that “prediction markets” like Kalshi and Polymarket have advertised themselves to consumers as gambling platforms, but have claimed in court that they are actually just investment companies. The letter says that is a contradiction that the FTC needs to investigate.
We have written before about how prediction markets are particularly troubling because they operate without state oversight. When prediction market platforms let users trade hundreds of millions of dollars on the Super Bowl game outcomes — plus millions more on trivial bets like which song would play first at halftime — that is not investing. That is gambling.
Several states have tried to enforce their state gambling laws against “prediction markets.” However, the federal Commodity Futures Trading Commission (CFTC) has filed lawsuits to stop those states from regulating “prediction markets.” That’s a problem.
As powerful corporations try to make gambling part of everyday life, it’s important for Arkansas to protect its citizens and families from predatory gambling. Otherwise gambling addiction will simply continue wrecking lives and hurting families in our state.
Articles appearing on this website are written with the aid of Family Council’s researchers and writers.
