A young soccer instructor had already blocked access to sports betting applications when he discovered prediction market platforms.
A tax professional described experiencing “the same high” from these trading sites that he felt while gambling. “That was how I relapsed — with Kalshi and Polymarket. I lost a bunch of money.”
The explosive expansion of prediction markets has ignited an intense regulatory battle unfolding in courtrooms and state capitals nationwide. Platform operators argue they should face oversight similar to stock exchanges due to federal regulations and their peer-to-peer trading structure, while sports betting companies and state authorities believe they require the same supervision as gambling platforms.
As this dispute continues without resolution, mental health professionals treating gambling disorders express growing concern about patterns they observe in their patients. In treatment settings, sports betting and prediction markets produce nearly identical outcomes.
Two individuals struggling with gambling addiction who shared their experiences with The Associated Press — the soccer instructor and tax professional — describe experiencing relapses on prediction platforms after taking legal steps to shield themselves from sports betting temptation. They are identified by profession due to the sensitive nature of their circumstances. Their experiences mirror what specialists report seeing among their clients.
“There may be real differences in how these products are defined or regulated, but in the therapy room, we are often seeing the same cycle of anticipation, action and reaction play out again and again,” said Dr. Cynthia Grant, the vice president of clinical for Birches Health, which operates a national network of providers for treating gambling addiction.
“I sometimes think of it like different doors into the same room. The label on the door may change, but once someone’s inside, the experience can feel very familiar.”
Sports betting sites and prediction markets provide many comparable wagering opportunities. Bets on games, player statistics and various outcomes. However, their operational structures differ.
Sports betting platforms employ internal specialists who establish odds determining payouts for successful wagers. It’s the house competing against bettors. Prediction market participants exchange contracts based on yes-or-no propositions, with gains and losses determined by market dynamics. Successfully holding a “yes” position on an event where most traders chose “no” yields larger returns. Prediction markets typically generate revenue through contract fees.
For those battling addiction, these represent two routes to identical consequences.
The soccer instructor who contacted the AP began gambling at age 16. Small wagers with neighborhood friends in New York, covering everything from card games to basketball and tennis. Upon turning 18, he frequented casinos and placed bets through sportsbooks. Facing increasing losses, he turned to prediction markets.
“I would be in all this debt and get a paycheck for $2,000 on a Friday and it would be gone by Saturday or Sunday,” said the instructor, 21. “I wouldn’t have money to fill up my gas tank.”
He struggled with loans and maxed-out credit cards while working and attending college before stepping away in January to address his addiction issues, which also included marijuana use.
He joined Gamblers Anonymous and was instructed to avoid associating with people who gamble.
“For a younger crowd, that’s difficult because it’s everywhere,” the instructor said. “My friends from childhood — most of them all gamble.”
Both the instructor and tax professional had formally excluded themselves from sportsbooks before beginning to trade on prediction markets. Self-exclusion programs allow gamblers to ban themselves from gambling establishments and betting applications. Many states offer these as part of gambling regulations, but no comprehensive national system exists.
The self-exclusion landscape becomes even more complicated when prediction markets are considered. Kalshi launched a voluntary opt-out program when it introduced a customer protection center in March 2025, joining several platforms — including Polymarket — collaborating on a national self-exclusion system for prediction markets. Whether this program would integrate with state gambling regulator systems remains unclear.
The accountant, 33, said his gambling issues began after New York launched legalized mobile sports betting in January 2022. He accumulated “a boatload of debt” by August 2023 when he disclosed his situation to his then-fiancée.
She proceeded with their marriage. Seeking to reduce expenses after their wedding, they moved into a rental property owned by his parents. He excluded himself from sportsbooks. Following the couple’s pregnancy loss, the accountant began day-trading before registering with Kalshi.
“Prediction markets are the same thing packaged in a different way,” the accountant said. “It’s a dangerous loophole. … How can you do all that and say you’re not a sportsbook?”
Tennis became his preferred sport — he appreciated the match pace — before entering rehabilitation in Virginia last year.
He experienced a setback in December when he downloaded Polymarket and placed a complimentary $10 wager. His wife, who had access to his email through her phone, confronted him and contacted his sponsor.
Although no comprehensive research exists on prediction markets’ impact on sports gambling addiction, the experiences of the instructor and accountant are familiar to treatment specialists.
“You’re seeing a lot of the same behaviors, whether it’s a prediction market or it’s gambling,” said Jody Bechtold, the CEO of The Better Institute, a Pennsylvania practice that works with people impacted by gambling disorders. “You’re seeing, you know, wagering more and more. Chasing losses, so ‘Oh, today was a bad day, I have to work tomorrow at the prediction markets to get my money back.’ … The lies, the secrecy, and that it’s impacting everyday life.”
Kalshi representative Elisabeth Diana emphasized its responsible trading programs — including trading pauses and self-imposed limits — and mentioned ongoing development of additional measures to promote healthy trading practices.
Compared to casinos, Diana stated, Kalshi is “fairer, more transparent, and less predatory.”
“There is no house that wins when customers lose,” she said. “This means that Kalshi doesn’t hook losers and penalize winners.”
Polymarket did not respond to requests for comment.
Sports have emerged as a significant category for prediction markets. Kalshi recorded over $2 billion in total trading volume during this year’s NCAA men’s basketball tournament, according to Diana. Michigan’s 69-63 championship victory over Connecticut generated $10.6 million in volume on Polymarket.
The U.S. market for sports-focused event contracts could reach approximately $1.1 trillion in annual volume, according to a Bank of America analysis.
“A year ago, if you said prediction markets, I mean I don’t know what that is, I don’t see it,” said Dr. Timothy Fong, the co-director of the UCLA Gambling Studies Program. “Now we’re starting to see it more and more in our patients that come into the clinic. And it’s usually not one, it’s multiple platforms they’re betting on, right? … When you have something that’s available, that’s accessible, that’s anonymous, is super easy to use, multiple times in a day, of course that’s going to raise the risk of addiction for any human on Earth.”
Multiple active lawsuits involve states and prediction markets, with consequences from the legal dispute affecting various levels.
Marlene Warner, the CEO of the Massachusetts Council on Gaming and Health — a private nonprofit health organization providing educational gambling programs and other services — described the prediction market situation as feeling “a bit like the wild, wild west right now.”
“We’re very used to like going to our state regulator or, you know, seeing a process go through where all of a sudden now you’re like, ‘OK, a piece of legislation has outlined what is appropriate for a licensed sports betting operator to do,’” Warner said. “And then you see the regulation come into place. And so you can track it. But right now, nobody knows kind of what the limits are.”
In most states with legal sports gambling, participation is restricted to ages 21 and older, while prediction markets accept 18- to 20-year-olds with some exceptions. Prediction markets also operate in states where sports betting remains illegal, including Texas and California.
“I don’t know enough frankly, we don’t know enough, nothing’s been studied about them, I can’t tell you whether they’re more less or exactly the same in terms of risk level,” Warner said. “But what I do know is they’re in a very gray, unregulated space and that alone makes it difficult.”
Prediction markets operate under federal Commodity Futures Trading Commission jurisdiction, which maintains regulations prohibiting event contracts “that involves, relates to, or references terrorism, assassination, war, gaming, or an activity that is unlawful under any state or federal law.”
CFTC chairman Michael Selig supports prediction markets in their legal battles against multiple states, claiming the commission’s “exclusive jurisdiction over these markets.”
While this debate continues, the soccer instructor and tax professional work to rebuild their lives — remaining vigilant about their addictions.
“You have to face this stuff or it just keeps getting worse,” the instructor said.
