Cheng Xin, Getty Images photo illustration A person holds a smartphone displaying the Kalshi app page on the Apple App Store, with the Kalshi branding visible in the background, on February 8, 2026, in Chongqing, China. My two youngest sons are home from college for a few weeks before fall semester. Last weekend, I watched them pull up an app and buy “contracts” on an NFL preseason spread that I didn’t know existed until they explained it to me.
They weren’t using a sports book. According to the platform, they weren’t gambling at all. They were trading.
I have spent thirty years building and running regulated financial products, from hedge funds to private credit strategies. I can tell you exactly what that product looked like to me: a derivative, but with none of the guardrails I would have had to clear before I could put it in front of a client.
That’s the trick sitting at the center of the fastest-growing corner of American wagering. Unfortunately, Congress has just proved again it has no idea what to do about it.
Legislation meant to rein in sports gambling and the newer prediction market business stalled out completely last week, even as insider trading scandals keep surfacing. The SAFE Bet Act, which would set minimum federal consumer protections for online sports betting, has not gotten a floor vote. Sen. Richard Blumenthal (D-Conn.), one of its sponsors, said the gambling and prediction market industries are simply outspending Congress’s patience, throwing lobbyists and money at the problem until lawmakers move on to something else.
I get why the platforms fight this hard. Kalshi is reportedly looking to raise funds at a $40 billion valuation. Polymarket is near $15 billion. Both built those valuations partly on sports contracts that look, walk and pay out exactly like sports bets on the Chiefs covering the spread.
The difference is regulatory, not economic. A sports book is licensed state by state, limited to those 21 and older, and subject to consumer protection rules built up over a decade of legalized gambling. A prediction market, on the other hand, is federally regulated by the Commodity Futures Trading Commission as a derivatives exchange. It is open to anyone 18 or older and functionally exempt from the entire state regulatory framework, all because Congress failed to specify that gambling on sports outcomes is, in fact, gambling and belongs in the realm of state regulation.
Yet the difference is obvious. If I were to offer my firm’s clients the equivalent of one of these sports contracts, I would end up in front of a FINRA arbitration panel by week’s end. Listing a new derivative product means proving you have the capital, the margin rules, the know-your-customer controls, and the disclosure regime to support it. None of that happens when you gamble on your team winning a game or beating the spread.
A recent House Agriculture Committee hearing produced a lot of handwringing about whether the Commodities Futures Trading Commission even has the staff to police such futures markets. The agency is asking Congress for $410 million next year. In contrast, the Securities and Exchange Commission, which regulates a market not nearly as chaotic, is asking for $1.9 billion. Regulatory arbitrage is not a side effect of this fight — it is the entire business model.
Then there is the part that actually got my attention as a father, instead of as a licensed professional. Kalshi and Polymarket set their minimum age at 18, three years below the 21-plus threshold every legal sportsbook has to enforce.
A 2026 Common Sense Media study found that more than one-third of boys aged 11 to 17 have gambled in the past year. That figure jumps above 50 percent among 16- and 17-year-olds.
Researchers at the Institute for Strategic Dialogue traced part of the reason: They registered test accounts as 15-year-olds and found that Kalshi and Polymarket’s official pages, along with athlete-promoted content for both, were sailing right past moderation filters that block traditional sportsbook ads from minors.
Pew’s research on adults under 30 that shows online wagering has nearly tripled in the last three years. My own children are grown, informed, and financially literate enough to know what leverage means. But plenty of 18-year-old college freshmen are none of those things, and the platforms know it. That is not an accident of marketing. That’s the business model.
I believe in free markets, and I’m not interested in being the guy who wants to ban things he doesn’t personally use. And there is a real case where prediction markets produce better information than a Vegas line: A market where thousands of people are pricing an outcome with real money behind it beats a bookmaker setting odds to balance his book. I don’t dismiss that. Price discovery is a genuine public good, and I would rather see it applied to elections and economic data than banned outright.
But that argument works only for genuine event contracts. It falls apart the moment the “event” is whether the Cowboys cover by a field goal. At that point, you are no longer discovering information the public needs. Rather, you are running a sportsbook with a futures trading license instead of a state gaming license, skipping every consumer protection that license was designed to require.
Sens. John Curtis (R-Utah.) and Adam Schiff (D-Calif.) have a bipartisan bill that would do the obvious thing: bar CFTC-registered platforms from listing contracts that are functionally sports bets and put that business back under state gambling law, where it belongs. It would also restore the state age limits and consumer protections that come with it.
But this bill has not moved. Nor has the SAFE Bet Act. That is beacause the gambling industry and the prediction market industry are both spending heavily to make sure the other guy gets regulated first, and that nobody gets regulated at all, in that order.
The NFL’s Hall of Fame Game kicks off the preseason on August 6 , with the full three-week slate underway a week later and running through August 29. That is roughly the entire runway Congress has left before contract volume on real games spikes again and this debate gets a lot more expensive.
My kids are now more engaged with football than I have ever seen them, checking win probabilities between plays like a second scoreboard. I don’t necessarily worry about that. But every parent watching this preseason should worry that Washington seemingly cannot tell the difference between trading and obvious sports gambling.
Jay Rogers is a financial professional with more than 30 years of experience in private equity, private credit, hedge funds, and wealth management.
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