{"id":4280,"date":"2026-04-09T13:43:00","date_gmt":"2026-04-09T20:43:00","guid":{"rendered":"https:\/\/infonews.ca\/news\/7609758\/prediction-markets-are-back-the-spotlight-this-time-because-of-the-war-in-iran\/"},"modified":"2026-04-24T10:00:58","modified_gmt":"2026-04-24T17:00:58","slug":"prediction-markets-filled-with-247-bets-are-regulated-differently-than-traditional-gambling","status":"publish","type":"post","link":"https:\/\/infonews.ca\/in420\/news\/4280\/prediction-markets-filled-with-247-bets-are-regulated-differently-than-traditional-gambling\/","title":{"rendered":"Prediction markets, filled with 24\/7 bets, are regulated differently than traditional gambling"},"content":{"rendered":"

Prediction markets let people wager on just about anything \u2014 from basketball games<\/a> to elections<\/a>. And among the more jarring bets recently, the U.S. military capture of former Venezuelan President Nicol\u00e1s Maduro<\/a>.<\/p>\n

The raid has evolved into an insider trading scandal. This week, the federal government charged a U.S. special forces soldier<\/a> who was part of January’s capture with using classified information about the mission to bet on Maduro’s downfall, and pocket more than $400,000<\/a> on Polymarket soon after.<\/p>\n

Polymarket, one of the world’s largest prediction markets, said it alerted the Justice Department after determining that someone had traded on classified government information and cooperated with the investigation. In a statement, the company maintained that insider trading \u201chas no place\u201d on its platform.<\/p>\n

Still, the case is once again putting the spotlight on a murky (and growing) world of speculative, 24\/7 transactions now filling the internet. The timing and subjects of particular trades \u2014 particularly related to geopolitical conflicts \u2014 have fueled scrutiny recently. Earlier this month, The Associated Press reported<\/a> that a group of new accounts on Polymarket also made highly specific, well-timed bets on the fate of the U.S. and Israel\u2019s war against Iran.<\/p>\n

Because prediction market wagers are categorized differently than traditional forms of gambling, tensions about government oversight are rising. President Donald Trump’s administration has already thrown its support<\/a> behind company operators \u2014 and sued three states<\/a> over their efforts to regulate them further. Meanwhile, other lawmakers in Washington are calling for further investigations<\/a> and new guardrails.<\/p>\n

Here’s what we know:<\/p>\n

How prediction markets work<\/p>\n

The scope of topics involved in prediction markets can range immensely. Beyond geopolitical conflicts, there\u2019s been a surge of wages on elections and sports games recently. But users also bet on anything from weather forecasts, the likelihood of the U.S. government confirming the existence of extraterrestrial life and how much billionaire Elon Musk might post on social media this month.<\/p>\n

In industry-speak, what someone buys or sells in a prediction market is called an \u201cevent contract.\u201d They’re typically advertised as \u201cyes\u201d or \u201cno\u201d wagers. And the price of one fluctuates between $0 and $1, reflecting what traders are collectively willing to pay based on a 0% to 100% chance of whether they think an event will occur.<\/p>\n

The more likely traders think an event will occur, the more expensive that contract will become. And as those odds change over time, users can cash out early to make incremental profits, or try to avoid higher losses on what they\u2019ve already invested.<\/p>\n

Proponents of prediction markets argue putting money on the line leads to better forecasts. And some think there’s value in monitoring prediction markets for potential news, particularly elections.<\/p>\n

Still, prediction markets can also be wrong. Traders may be closely following certain events, but others could just be randomly guessing.<\/p>\n

Who is behind all of the trading is also pretty unclear, at least to the public. The companies running today\u2019s biggest platforms know who their customers are \u2014 as they collect personal information to verify identities and payments. But most users can trade under anonymous pseudonyms on the websites the world can see.<\/p>\n

Critics also stress that the ease and speed of joining these 24\/7 wagers leads to financial losses everyday, particularly harming users who may already struggle with gambling. The platforms themselves typically make money by taking a small cut of at least some trades, usually in the form of fees.<\/p>\n

The major players<\/p>\n

Polymarket is one of the largest prediction markets in the world. Users can fund event contracts through cryptocurrency, debit or credit cards and bank transfers. <\/p>\n

Restrictions vary by country, although experts note that users might still find ways to buy certain contracts while traveling abroad or through connecting to different VPNs. But for U.S.-based trades, the reach of these markets has expanded rapidly over recent years, coinciding with shifting policies out of Washington. <\/p>\n

While prediction markets have found backing from the Trump-controlled Commodity Futures Trading Commission, former President Joe Biden was more aggressive in cracking down. Following a 2022 settlement with the CFTC, Polymarket was barred from operating in the country. That changed under Trump late last year, when Polymarket announced it would be returning to the U.S. after receiving clearance from the commission. American-based users can now join a \u201cwaitlist\u201d to access the platform.<\/p>\n

Meanwhile, Polymarket\u2019s top competitor, Kalshi, has been a federally-regulated exchange since 2020. The platform offers similar ways to buy and sell event contracts as Polymarket \u2014 and it currently allows event contracts on elections and sports nationwide. Kalshi won court approval<\/a> just weeks before the 2024 election to let Americans put money on upcoming political races and began to host sports trading last year.<\/p>\n

The space is now crowded with other big names. Major League Baseball inked a deal<\/a> with Polymarket last month, following other partnerships in professional hockey and soccer. Meanwhile, sports betting giants DraftKings and FanDuel have launched their own prediction platforms. Trump\u2019s social media site Truth Social has also promised to offer an in-platform prediction market through a partnership with Crypto.com \u2014 and one of the president\u2019s sons, Donald Trump Jr.<\/a>, holds advisory roles at both Polymarket and Kalshi.<\/p>\n

Last month, The Associated Press agreed<\/a> to sell its U.S. elections data to Kalshi.<\/p>\n

Loose regulation and calls for reform<\/p>\n

Because they\u2019re positioned as selling event contracts, prediction markets are regulated by the CFTC. That means they can avoid state-level restrictions or bans in place for traditional gambling and sports betting<\/a> today.<\/p>\n

\u201cIt\u2019s a huge loophole,\u201d Karl Lockhart, an assistant professor of law at DePaul University who has studied this space, previously told<\/a> the AP. \u201cYou just have to comply with one set of regulations, rather than (rules from) each state around the country.\u201d<\/p>\n

Sports betting<\/a> is taking center stage. There are a handful of big states \u2014 like California and Texas, for example \u2014 where sports betting is still illegal, but people can now wager on games, athlete trades and more through event contracts. <\/p>\n

A growing number of states<\/a> and tribes<\/a> are trying to stop this. But the Trump administration has already pushed back, maintaining<\/a> that the CFTC has the sole authority to regulate prediction markets. Many lawyers expect litigation to eventually reach the U.S. Supreme Court.<\/p>\n

Despite overseeing trillions of dollars for the overall U.S. derivatives market, the CFTC is much smaller than the Securities and Exchange Commission, which regulates the securities industry. And at the same time event contracts are growing rapidly on prediction market platforms, there have been sizeable workforce cuts and leadership departures. CFTC chairman Michael Selig is the sole member filling just one of five commissioner slots.<\/p>\n

Meanwhile, Congress members from both sides of the aisle have introduced broad legislation for more guardrails in recent months \u2014 including a ban on prediction market bets related to war, assassinations or terrorist attacks. Federal law already gives the CFTC the authority to bar these kinds of event contracts, but some lawmakers are seeking an outright ban. <\/p>\n

Calls for change also arrive as insider trading allegations pile up. Beyond the charges spanning from the Maduro-related bets on Polymarket, Kalshi just earlier this week<\/a> fined and suspended three congressional candidates who it said wagered on the outcome of their own elections.<\/p>\n

Both Kalshi and Polymarket have rolled out added guardrails in efforts to combat insider trading<\/a> recently, notably soon after Congressional pushes for increased oversight.<\/p>\n

\n \"|\"
FILE – Venezuelan President Nicolas Maduro gives a press conference at the Miraflores presidential palace, March 12, 2020, in Caracas, Venezuela. (AP Photo\/Matias Delacroix, File)<\/figcaption><\/figure>\n","protected":false},"excerpt":{"rendered":"

Prediction markets let people wager on just about anything \u2014 from basketball games to elections. And among the more jarring bets recently, the U.S. military capture of former Venezuelan President Nicol\u00e1s Maduro. The raid has evolved into an insider trading scandal. This week, the federal government charged a U.S. special forces soldier who was part […]<\/p>\n","protected":false},"author":521,"featured_media":4281,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"guid":"6f87001f-7ce2-4d21-82ba-99fe8f435afe","source":"The Associated Press","byline":"Wyatte Grantham-philips","published":"2026-04-09 13:43:00","updated":"2026-04-24 09:58:43","_infotelid":"","_prepressid":"","_multisite_post_sync":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[847,383,848,728,732,849,566],"tags":[],"region":[360],"class_list":["post-4280","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-baseball","category-business","category-hockey","category-international","category-politics","category-soccer","category-sports","region-world"],"blocksy_meta":[],"parsely":{"version":"1.1.0","canonical_url":"https:\/\/infonews.ca\/in420\/news\/4280\/prediction-markets-filled-with-247-bets-are-regulated-differently-than-traditional-gambling\/","smart_links":{"inbound":0,"outbound":0},"traffic_boost_suggestions_count":0,"meta":{"@context":"https:\/\/schema.org","@type":"NewsArticle","headline":"Prediction markets, filled with 24\/7 bets, are regulated differently than traditional gambling","url":"http:\/\/infonews.ca\/in420\/news\/4280\/prediction-markets-filled-with-247-bets-are-regulated-differently-than-traditional-gambling\/","mainEntityOfPage":{"@type":"WebPage","@id":"http:\/\/infonews.ca\/in420\/news\/4280\/prediction-markets-filled-with-247-bets-are-regulated-differently-than-traditional-gambling\/"},"thumbnailUrl":"https:\/\/infonews.ca\/in420\/wp-content\/uploads\/sites\/3\/in420-848f11223e13a309123fcee7743b08b8c21bfa9b0886d066d70dae26bf279ff6.jpg?w=150&h=150&crop=1","image":{"@type":"ImageObject","url":"https:\/\/infonews.ca\/in420\/wp-content\/uploads\/sites\/3\/in420-848f11223e13a309123fcee7743b08b8c21bfa9b0886d066d70dae26bf279ff6.jpg"},"articleSection":"Baseball","author":[{"@type":"Person","name":"The Associated Press"}],"creator":["The Associated Press"],"publisher":{"@type":"Organization","name":"iN420","logo":""},"keywords":[],"dateCreated":"2026-04-09T20:43:00Z","datePublished":"2026-04-09T20:43:00Z","dateModified":"2026-04-24T17:00:58Z"},"rendered":"