It’s Gambling

What's the difference between betting on sports and "trading on a prediction market?" For the gambler herself, very little. If you go on Kalshi, the suddenly ubiquitous "prediction market" platform that has enjoyed the backing of the Trump administration, one can click on the "sports" tab and see a list of, among other events, all the college basketball games being played today. One can "buy shares" in, say, Kennesaw State to beat Gonzaga, and if that result happens, she will collect profit from the money "invested" by the losers. Kalshi, with a straight face, argues that this is different from traditional sportsbook betting because they are a neutral party simply charging transaction fees, instead of a bookmaker charging a vig. But if you define sports gambling as "risking money on a sporting event in the hopes of making more money," all the synonyms in the world can't hide that. The state of Arizona sees it this way, too. This week, the AG of the Copper State became the first to file criminal charges against Kalshi for running an illegal gambling operation. Their argument quite simply amounts to "You can gamble on Kalshi," with the lawsuit detailing 20 straightforward instances of various bets on sports and elections accepted by the platform. That you can bet on any world event besides sports on these things opens up a whole other kind of hell, but for today let's keep the focus limited to sports. On Thursday, MLB announced that it is partnering with Polymarket, a Kalshi competitor prepping for a full-scale U.S. launch, to make them "MLB’s Official Prediction Market Exchange." The deal gives Polymarket the right to use MLB's IP and data, and it supposedly gives the league some power to put restrictions on certain kinds of bets that would be especially vulnerable to insider trading, like individual pitches and manager decisions. As of this writing, MLB's press release refers to this as an "iintegrity framework" [sic].