The first time I encountered the headline announcing that ICE would be investing as much as two billion dollars in Polymarket, I instinctively did a double take. My first thought was one of disbelief mixed with confusion: why on earth would the immigration enforcement agency, commonly known as the Immigration and Customs Enforcement division, be funneling billions into a prediction market platform? Only moments later did I realize my mistake — this ICE was not the one tasked with border enforcement, but rather the Intercontinental Exchange, the powerful parent company that owns and oversees the New York Stock Exchange. My sense of confusion turned into a muted recognition of logic, yet there remained a flicker of bemusement. After all, weren’t these the supposed pillars of financial seriousness, the traditional gatekeepers of capital markets dedicated to disciplined investment, sustainable corporate growth, and safeguarding the retirement savings of ordinary Americans? And yet, here they were aligning themselves with entities that profit from allowing users to place monetary bets on whether, for instance, the U.S. government might finally confirm the existence of extraterrestrial life. It seems that such contradictions are symptomatic of the era we live in — the year 2025 — when Americans’ appetite for speculation and risk has grown insatiable, and industries, always keen to seize opportunity, eagerly build new ways to monetize that tendency.
As Jordan Bender, an equity research analyst at Citizens JMP, succinctly put it: when people are given access to tools that permit betting, they inevitably use them. This helps explain the extraordinary spread of gambling and speculative culture in the United States. Its modern resurgence can be traced back to the 2018 Supreme Court decision that struck down the federal prohibition on sports betting, igniting a transformation that has since seen wagering legalized in dozens of states. Yet today, the public conversation surrounding gambling has progressed far beyond traditional sports. The new frontier is prediction markets, digital platforms that let participants stake real money on outcomes ranging from electoral contests and geopolitical events to fluctuations in natural disasters or policy changes. For most of their existence, these markets have existed only at the margins, constrained by uncertain legality and limited regulatory tolerance. But a new generation of companies has discovered ways to exploit permissive interpretations of federal regulation and perceived jurisdictional loopholes to start operating more widely across the country.
Steve Ruddock, a veteran gambling-industry analyst and author of the newsletter *Straight to the Point*, observes that prediction markets “look, smell, and feel like gambling” — and that superficial resemblance is hard to dispute. What is perhaps even more striking is how this resemblance now extends far beyond the confines of casinos or sportsbooks. The boundaries between gambling and legitimate investing have become increasingly porous. From the volatile cryptocurrency exchanges to day-traded equity markets and fantasy sports wagers, everyday financial behavior often blends speculation with play. The earlier rationale for prediction markets — that they might reveal collective intelligence, correct inefficiencies, or aid in price discovery — is being met with growing skepticism. Meanwhile, the commercial world, always receptive to consumer impulses, is rushing to meet demand. Even established institutions once considered conservative are now partaking in the game. In today’s financial landscape, nearly every arena bears the aesthetic and psychological imprint of a casino. One either joins the bettors or risks being left behind.
I often recall a conversation I had several years ago with Chris Grove, a sports-betting investor at Acies Investments, as we discussed the rapid ascent of mobile gambling applications like DraftKings and FanDuel. Grove articulated an idea that at the time I dismissed: once an individual experiences the excitement of a wager on a single category — say, a sports outcome — they quickly become inclined to wager on virtually anything. This so-called ‘gateway effect’ of gambling, he argued, represented immense opportunity not only for sportsbook operators but for a broader ecosystem of investing and crypto platforms that translate risk-taking into entertainment. I had once thought this a slightly conspiratorial notion; in hindsight, it now appears almost prophetic.
The current epicenter of expansion lies in platforms such as Kalshi and Polymarket, both designed to pair users wishing to bet on opposing sides of discrete events. Kalshi has spearheaded a notable foray into sports-related contracts, even in jurisdictions like Texas and California where conventional sports betting remains illegal. Meanwhile, Robinhood — once a pure stock-trading platform — has begun integrating prediction market features through a partnership with Kalshi, reshaping its image toward becoming a so-called “financial super app.” ICE’s multibillion-dollar investment in Polymarket signifies another institutional endorsement. By distributing Polymarket’s data to investors interested in gauging sentiment on political, economic, or social developments, Intercontinental Exchange positions itself at the crossroads of trading and speculation. Polymarket, which once faced U.S. restrictions, is now poised to become nationally accessible, and even the NHL has entered partnerships with both Kalshi and Polymarket.
Meanwhile, traditional sportsbooks are not content to sit idly on the sidelines. Companies such as FanDuel and DraftKings are diversifying their portfolios, mirroring the innovation of nimble upstarts by venturing into areas like online casino gaming. FanDuel’s partnership with the global derivatives powerhouse CME Group, for instance, will enable users to speculate on financial indicators such as the future prices of gold, oil, GDP trends, and inflation. DraftKings, unwilling to be outdone, has acquired the predictions platform Railbird. Nonetheless, there looms a cloud of uncertainty: substantial investments in these markets could evaporate if regulators one day decide the entire enterprise violates gambling laws.
FanDuel, when asked for comment, simply referred to its public statement regarding the CME collaboration, while DraftKings’ CEO Jason Robins has dismissed prediction markets as minor competition, calling dedicated sportsbooks a “vastly superior experience.” Polymarket, notably, declined to comment — a silence that mirrors the industry’s general sense of precarious expansion.
Anyone feeling dizzy while following these developments might be forgiven, for the rapid acceleration of gambling-related innovation is both fascinating and bewildering. The key legal tension centers on a fundamental question: are prediction markets a form of gambling, and if so, who has the authority to regulate them? Historically, gambling oversight has rested with individual states; yet prediction market companies argue that by structuring their offerings as futures contracts, similar to those trading in traditional commodities like oil or gold, their activities should be under federal jurisdiction — specifically that of the Commodity Futures Trading Commission (CFTC). For the moment, federal regulators seem ambivalent, leaving a patchwork of interpretations. As a result, scenarios arise in which an 18-year-old Californian might legally place an event contract bet on Kalshi while, paradoxically, sports betting remains banned for anyone under 21 in that same state. Moreover, prediction markets avoid state gambling taxes and treat winnings differently under federal law.
As Jordan Bender of Citizens JMP explains, most insiders recognize that no matter how it is packaged, this remains gambling — and several states, including Nevada and Massachusetts, have already issued lawsuits or cease-and-desist notices claiming these platforms facilitate illegal sports betting. Native American tribes that operate casinos have echoed the same grievances, seeing potential threats to their sovereign gaming revenues. Asked whether this booming sector truly complies with legal standards, many industry participants shrug, conceding the murkiness.
Chad Beynon, an equity analyst at Macquarie, articulates the prevailing uncertainty: the pivotal debate is whether event contracts infringe upon sports-betting regulations, and since the answer is unresolved, investors face significant risk. Nonetheless, companies such as Kalshi maintain public confidence, asserting through official statements that their operations rest firmly under the CFTC’s authority — a jurisdictional battle that, as they note, has been fought in America’s commodities markets for generations.
Despite regulatory ambiguity, heavyweight financiers have entered the fray. Notably, Peter Thiel’s Founders Fund has invested in Polymarket, and Donald Trump Jr. is associated with both major prediction market players. Even Trump Media, the parent company of Truth Social, has signaled an impending integration that would let users participate directly in such markets. As Chris Grove points out, this influx of capital from previously gambling-averse quarters indicates just how powerfully these ventures have redefined boundaries between finance and play.
The difficulty of defining gambling itself compounds the challenge. Legal scholars such as Peter Malyshev of Cadwalader, Wickersham & Taft note that the distinction between legitimate futures trading and prohibited wagering has long been contested. The current framework was crafted long before digital mobile interfaces made speculative betting a universal pastime. In his view, the line dividing gambling from investing remains as loosely drawn as ever — a reflection of human behavior more than jurisprudence.
Statistically, the normalization of betting is undeniable. The American Gaming Association recently found that over half of U.S. adults — 55 percent — gambled at least once in 2024, collectively staking nearly 150 billion dollars on sports alone. Those figures exclude quasi-gambling activities such as speculative trading in options, cryptocurrencies, or prediction markets. Indeed, even among families historically disengaged from gambling, many now cross state borders on weekends to place legal bets. I confess to a similar curiosity: during a visit to Chicago, I stepped into a DraftKings bar near Wrigley Field to test the user-friendly betting interfaces and later wandered into a FanDuel lounge during a preseason basketball game, placing small wagers from my phone. Five years ago, this seamless integration of gaming into everyday life would have seemed implausible. As Parker Bach, a doctoral researcher at the University of North Carolina–Chapel Hill studying digital political culture, observes, “once upon a time you needed a bookie or a casino; today it’s just a few taps on your screen.”
Yet with convenience comes ethical risk. The recent NBA betting scandal has laid bare how the gambling ecosystem breeds temptation, even among professional athletes. Federal prosecutors allege schemes involving insider information exchanged for illicit wagers, demonstrating that even sophisticated systems can be manipulated. While sportsbooks were technically victims of fraud, the episode highlighted the vulnerabilities inherent in a society where wagering opportunities are ubiquitous.
If one strips away euphemism, much of what now passes as financial engagement amounts to gambling. From a macroeconomic standpoint, the shift has unsettling implications. Genuine investing — in theory — allocates capital toward productive enterprise that generates innovation, jobs, and societal value. Gambling, by contrast, is entertainment, a zero-sum redistribution of money that produces no tangible good. Tyler Gellasch, the CEO of the Healthy Markets Association, warns that this blurring diverts meaningful capital from constructive economic activity into speculative side bets that do nothing to strengthen the real economy.
Even so, advocates of prediction markets continue to emphasize their utility. They argue that by aggregating public expectations, these markets can forecast real-world events with accuracy surpassing traditional polling or expert opinion. For instance, investors can hedge against unlikely but costly occurrences — betting on outcomes like a wildfire damaging a property as an insurance-like offset. Yet even these supposed advantages have limits. Prediction markets misjudged, for example, the outcome of the 2025 papal conclave, undercutting claims of collective foresight.
Ultimately, it has become difficult to deny that the cultural ethos of speculation now permeates nearly every domain. As Steve Ruddock candidly remarks, “it’s all gambling.” The proliferation of such behavior suggests something deeper in the national psychology: a collective cynicism — perhaps even nihilism — grounded in the belief that established systems are rigged, so one might as well indulge in chance. Yet beyond cynicism lies pleasure; wagering, for many, remains exciting, social, and momentarily empowering. Debate over legal classification may continue indefinitely, but one truth stands firm: the hunger to speculate persists, and the industry supplying it shows no intention of slowing down.
Emily Stewart, senior correspondent at Business Insider, concludes this examination by reminding readers that her coverage of business and the economy aims to reveal precisely such tensions at the heart of our financial culture — where the line between rational investment and chance-driven play increasingly dissolves before our eyes.
Sourse: https://www.businessinsider.com/kalshi-polymarket-fanduel-draftkings-sports-betting-gambling-2025-11
