"There are two main reasons prediction markets have blown up in the past couple of years. One is that they offer a large group of people something they want: the chance to put money on a wide range of outcomes, from sporting events to elections to how many times Mr. Beast will say the word dollar in his next video."
"The other is that, until quite recently, they weren't really legal. Things opened up for Kalshi, which had been seeking full regulatory clearance for years, in 2024. Polymarket, which had withdrawn from the U.S. in 2022 after an enforcement action by the Commodity Futures Trading Commission, only got the go-ahead to come back last year. The first big prediction market election came in 2024, and the first fully predictified Super Bowl was the Seahawks versus the Patriots."
""Under my leadership, the CFTC is charting a new course," Selig wrote. "Prediction markets have exploded in popularity as broad swaths of market participants seek to hedge portfolio risks and test their abilities to forecast truth," he argued, and in "order to achieve the golden age of American financial markets," regulators must "must break with the rigid and restrictive regulatory practices of the past.""
Prediction markets expanded rapidly for two main reasons: widespread consumer demand to wager on diverse event outcomes and a recent shift in regulatory treatment that legalized many platforms. Kalshi secured regulatory clearance in 2024, and Polymarket returned to the U.S. after a prior enforcement action. The market produced major events such as a 2024 prediction-market election and a predictified Super Bowl matchup. CFTC chair Michael Selig endorsed a more permissive approach, framing prediction markets as useful information-aggregation tools that can hedge risks and operate as regulated financial exchanges rather than mere gambling venues.
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