Prediction markets have decided that a united front is a more powerful force battling state gaming regulators than opposing them individually. The major platforms have banded together to form the Coalition for Prediction Markets.
United We Stand
The preeminent mobile sportsbooks formed the Sports Betting Alliance (SBA) to promote their interest throughout the nation. Therefore, it is not surprising that industry leaders Kalshi and Crypto.com announced that they, too, have forged an alliance of prediction platform providers, including Coinbase, Robinhood, and Underdog, called the Coalition for Prediction Markets.
The organization is designed to promote the prediction market platforms through the federal authority of the Commodity Futures Trading Commission (CFTC). They do not want to be beholden to state gaming agencies that demand all operators obtain a license and pay taxes to those states in which they operate as gaming companies.
“Prediction markets are a new layer of civic infrastructure—public-good technology that gives people clearer insight and helps institutions make better decisions. They democratize financial participation by rewarding what people know, not who they know. As consumer interest accelerates and regulation evolves, this coalition will champion responsible, transparent growth to ensure the benefits of prediction markets reach the broader public,” said Matt David, Executive Board Member of the Coalition and President of North America & Chief Corporate Affairs Officer at Crypto.com.
Implementing Guardrails
Some of the criticisms levied at the prediction markets have been a lack of clear and transparent guardrails.
The state gaming regulators for the mobile sports betting industry are keen to implement consumer protection and responsible gambling initiatives, which is something they say is lacking with the sports event contract trading companies.
The Coalition for Prediction Markets aims to negate that criticism and work with the CFTC to build its own consumer protections, much like those implemented on the state level for mobile sportsbooks. One other hallmark of the federal protections will be one set of rules as opposed to the many that vary from state to state for mobile sports betting.
Sara Slane, Executive Board Member of the Coalition and Head of Corporate Development at Kalshi, stated, “From day one, we wanted to be regulated. We spent years working with the CFTC because prediction markets must operate with strong federal safeguards that prevent insider trading, protect consumers, and ensure these markets remain transparent and corruption-free.”
Although Underdog has joined the union of prediction market platforms through its association with Crypto.com, it is important to note that other, more well-established sportsbooks like Fanatics that are entering the prediction market have not joined.
Fanatics Markets will be the first mobile sportsbook brand to compete in the sports prediction market. However, DraftKings and FanDuel are also poised to enter, but they are all doing so while walking a tightrope with the state regulators with whom they have built relationships and who also decide whether or not to renew their licenses.
Those three sportsbooks have vowed not to enter their prediction platforms in any state that currently has mobile sports betting or is in the process of launching. Underdog Sports has no such worries, as they are no longer active in the mobile sports betting industry after withdrawing from North Carolina and relinquishing their license in Missouri only weeks before it launched on December 1st.
