I. Introduction

On October 13, the Washington Sun reported that the Federal Trade Commission (FTC) is preparing to probe online sports betting over possible deceptive advertising. Most curious — and revealing — is that the probe is expected to not encompass prediction markets like Kalshi and Polymarket. Along with affirming the prediction market lobby’s political power in Trump’s Washington, it also exposes the fake populism of the Federal Trade Commission (FTC) under Andrew Ferguson.

Gambling has become increasingly ubiquitous in modern American life. Once condemned as among the most harmful of vices, gambling on everything from pop culture to matters of life and death has become mainstream. Mainstream media partnerships and advertisements for popular prediction markets like Kalshi and Polymarket have become ubiquitous. In 2026, the cause of regulating prediction markets has gained momentum amid controversies over “death bets” on life-or-death matters including war. It is certainly alarming that prediction markets let users profit from contracts tied to war and the fate of political leaders. In elections, prediction markets have become increasingly mainstream among political pundits, who often treat Kalshi market fluctuations as data of comparable significance to polling. Beyond ethical concerns surrounding betting on election outcomes with real-world impacts, it is also something that poses clear insider trading risks — and which has, predictably, led to many likely cases of insider trading.

Though these are both issues with real importance, prediction markets primarily serve an equally harmful, if more mundane purpose: mainstreaming sports gambling, one that lacks existing safeguards that protect consumers. In 2025, 95% of Kalshi's revenue stemmed from “sports-related contracts”. There is growing popular awareness of the disproportionate impact of sports betting’s popularity increase among young men. A Siena Research Institute survey from February found that 33% of men aged 18 to 49, representing over double the total for Americans across age groups (15%) placed a sports bet on a prediction market like Kalshi or Polymarket. The same survey also indicated strong support for regulations that treat sports betting on prediction markets the same as those on traditional sportsbooks. In addition to a 65% majority in favor of regulating sports events contracts the same as normal sports betting, the survey found disproportionate support (73%) among young men.

With gambling a mounting public health crisis, failing to probe prediction markets as part of a sportsbook probe has dangerous implications. Leaving companies like Kalshi and Polymarket outside the probe’s defined area of scrutiny exposes the hollowness of the Trump era regulator’s supposed populism: a crackdown on predatory betting that spares companies with ties to administration officials and even Trump’s family isn’t worth taking seriously.

II. Gambling Harms and Selective Enforcement

SPORTS BETS FRAMED AS INVESTMENTS

While prediction markets insist that they operate legitimate financial exchanges, not gambling rings, this is legal fiction. No one who spends money on predicting the outcome of an NBA match views it as the purchase of an “event contract”: they view it as betting. Fans who are willing to put money behind their predictions on a game’s outcome are not “trading on sports": they are betting, and are aware of it. The Trump-led CFTC and industry groups insistent that their products amount to financial derivatives increasingly do not pass muster with the public. Kalshi's business model is overwhelmingly dependent on sports, capitalizing on high-profile events like the 2026 World Cup and NBA Finals to drive growth.

Research indicates that the expansion of online sports betting has real financial consequences for consumers. A UCLA study on sports betting found higher bankruptcy risk, debt collections, and loan delinquencies following legalization. These risks are precisely why the 39 states (and Washington D.C.) which legalized sports betting have regulatory infrastructures, however imperfect, with consumer protection safeguards. These include state self-exclusion lists designed to help individuals struggling with addiction, or cooling-off periods. The presence of adults under 21 on Kalshi has received particular attention given the said age group’s inability to use most sportsbooks.

In addition to the moral hazards associated with gambling and its financial impact on vulnerable people, the growth of sports betting on platforms like Kalshi also harms communities by undercutting state tax revenue. In Hawaii, where gambling is formally banned, the growth of prediction markets threatens to expose more residents to addiction risks the state's laws are meant to prevent. It's worth noting that the platforms' claims that they do not promote sports gambling have been rejected by addiction recovery advocates. The National Council on Problem Gambling’s acceptance of a $2 million donation from Kalshi sparked backlash that led to its executive director’s resignation.

It would be indefensible for any betting platform-related scrutiny to exclude prediction markets. Nevertheless, it is particularly indefensible that the FTC would exclude these platforms in a probe over deceptive advertising of all things. Likely deceptive advertising practices by prediction markets have drawn lawmaker scrutiny amid mounting investigations into misleading advertising campaigns. This year, an investigation of Polymarket by The Wall Street Journal documented widespread deceptive tactics by influencers paid to promote the company. One creator purported to place around $400,000 in bets that, according to the investigation, were never made. These deceptive promotional tactics serve to obfuscate the reality that users overwhelmingly lose money on prediction markets.

FAKE POPULISM BY FERGUSON’S FTC

Andrew Ferguson, Trump’s choice to chair the FTC, has worked to shed his Republican establishment pedigree by embracing an image more aligned with the party's “populist” wing. This has meant, among other things, giving Amazon a slap on the wrist over dark patterns practices while framing it as a victory against Big Tech. It has also meant rolling back agency actions to rein in surveillance pricing and noncompetes while occasionally feigning interest in both policy areas. Other actions, like receiving glowing headlines for taking Live Nation to court over resale practices, coincided with more meaningful action by other agencies to abandon accountability. In the case of the Ferguson-era FTC’s reported concern over betting platforms, it comes at a time when regulators with real power to curb gambling are embracing it.

As we examined in September, the Commodity Futures Trading Commission (CFTC) in Trump’s second term has effectively become a rubber stamp, if an outright promotional vehicle, for the industry’s interests. CFTC decisions under chair Michael Selig have consistently sought to promote the prediction market interests while crushing state efforts to regulate them. This includes invoking “emergency authority” in response to a New York lawsuit against Kalshi. Earlier in October, the CFTC proposed treating event contracts, including sports contracts, as swaps. In contrast, the commission implemented a separate interim rule that excluded traditional sportsbook wagers from said regulatory category. As a result, the CFTC effectively put its thumb on the scale to help prediction markets claim federal protection while states try to enforce gambling safeguards.

Outside prediction, CFTC officials have reportedly worked directly against accountability for insider trading more generally. Mel Gunewardena, who leads the CFTC’s office of international affairs and directly advises Selig, reportedly intervened to thwart scrutiny of suspiciously-timed oil trades. The gutting of the CFTC’s capacity amid an industry boom, tied with prediction markets' newfound lobbying prowess, has enabled them to amass serious influence in Washington. Perversely, this includes hiring former lawmakers who once worked to rein in sports-related gambling on prediction market platforms while in office.

Just as bank regulators have approved controversial decisions that stand to financially benefit Trump’s family, the CFTC’s friendliness towards prediction markets aligns with Trump’s relatives’ financial interests. In September, Donald Trump Jr.’s venture capital firm 1789 Capital announced an investment of some $300 million in Polymarket; Trump Jr. also reportedly holds equity in Kalshi, alongside holding advisory positions in both companies.

III. Conclusion

Ferguson’s selective rhetorical populism has accompanied retreats from broader protections against noncompetes and surveillance pricing. Ferguson went from publicly warning of Big Tech platforms’ economic and political power to joining Trump’s pro-laissez faire tech regulation “Super Intelligence Force”. The FTC’s recent decision to probe OpenAI and Anthropic over agent-related safety concerns is unlikely to prove meaningfully different. Given his record, it is wholly unsurprising that Ferguson reportedly considered leaving after just a year as chair to join a Big Law firm. Reportedly initiating a probe of betting platform-related harms while excluding perhaps the two most ubiquitous gambling platforms is par for the course for Ferguson’s tenure.

Turning sporting events into an endless opportunity for Americans to gamble from their phones is immoral and exploits desperate and vulnerable people. Even worse is insulting Americans’ collective intelligence by insisting “sports-related bets” constitute a different category from sports betting. If Ferguson had any meaningful interest in protecting vulnerable Americans from financial exploitation, the FTC would not conveniently exclude Kalshi and Polymarket from a betting probe.