The Problems With Prediction Markets

1A

NPR

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4.3 • 4.5K Ratings

🗓️ 19 February 2026

⏱️ 27 minutes

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Summary

Prediction markets like Kalshi and Polymarket have seen explosive growth over the last year. These platforms allow people to put money on the outcomes of everything from local elections to the Super Bowl.

But an epic battle is underway between state regulators and these companies. At least 20 federal lawsuits have been filed against these companies. The cases claim these markets are simply gambling by another name and should be regulated like betting platforms.

Now, the federal government is putting its thumb on the scale, arguing prediction markets should be looked as as a financial exchange, not a betting platform. This paves the way for their further expansion, not regulation. What does the future hold for companies like these?

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Transcript

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0:00.0	Prediction markets have experienced explosive growth over the last 12 months.
0:12.4	They're online platforms where people can bet on everything from election outcomes to sporting events to economic data.
0:19.1	Nearly $12 billion was traded on sites like Kalshi and Polly Market in December 2025.
0:25.4	That's a 400% increase year over year.
0:29.0	Supporters argue these markets can produce surprisingly accurate and useful forecasts.
0:34.6	Critics say this is just gambling by another name, raising serious questions about regulation,
0:40.0	risk, and who's in charge of oversight. Those tensions escalated this week when Mike Seeley,
0:45.3	he's chair of the Commodity Futures Trading Commission, argued that the platform should be
0:49.4	seen as federally regulated financial markets, not betting sites under the jurisdiction of state-level regulators.
0:55.8	To those who seek to challenge our authority in this space, let me be clear. We will see you in court.
1:04.1	I'm Jen White, and you're listening to the 1A podcast. We'll be back with our guests to help us
1:08.6	understand how these markets work and why they're suddenly at the center of a regulatory fight right after this. Stay with us.
1:20.1	Let's get into the conversation with Bobby Allen. He's a technology correspondent for NPR and he joins us from Los Angeles. Bobby, welcome back to the
1:28.1	program. Hey, Jen. So, Bobby, before we get into this fight over who should regulate prediction
1:32.6	markets and how, I just want you to lay out some of the basics for us. For those of us who haven't
1:37.1	been following this, how would you define a prediction market? Sure, so prediction markets are
1:42.9	booming right now. The two big ones are Kaushi and Polly Market, and they are apps where you can open them up and place a bet on virtually anything. So if you're wondering if Eric Adams will be on the next season of Dancing with the Stars. You can place money on that.
2:02.8	If you're wondering if President Trump will say,
2:05.7	Drilled Baby Drilled at his next Oval Office appearance,
2:07.2	you could put money on that.
2:10.4	You could place money on whether a world leader will be toppled,
2:12.3	how much famine will be in Gaza.
	...

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