Derek Stevens Says Kalshi and Polymarket Have an Unfair Edge Over Licensed Sportsbooks

Circa Sports owner Derek Stevens has taken aim at prediction markets, arguing that platforms like Kalshi and Polymarket compete for the same customers as sportsbooks without paying the taxes, fees, and regulatory costs that licensed operators carry. For PSPs and other high-risk payment players, the point is simple: if a product behaves like betting and pulls betting traffic, the regulatory fight around it is not an abstract one.

1. In an interview with CDC Gaming, Stevens called prediction markets “pirates” and “thieves,” saying they can offer better prices because they avoid the extra costs that come with regulated sportsbooks.
2. Licensed sportsbook operators pay state and federal taxes, league-related fees, licensing fees, and contributions to responsible gambling programs. Stevens said Circa could offer significantly more competitive odds if it did not have those costs, and that its low-hold model is especially exposed to this kind of competition.
3. Stevens also pointed to consumer protection issues, including different age minimums and responsible gambling safeguards. Critics of prediction markets argue that letting 18-year-olds trade in markets that function like sports betting creates a gap with state-regulated sportsbooks.
4. The broader dispute is already spilling into lawsuits between states and prediction market operators as regulators try to assert authority over what they view as another form of sports betting. Stevens said states will not simply accept a federal framework that would reduce gambling tax revenue.
5. New York and Nevada are among the jurisdictions that are unlikely to allow federally regulated prediction markets without a fight. For sportsbooks, the pressure is pushing them closer to regulators as they try to preserve the current licensing-and-tax model.

Circa is still expanding despite the fight: the company recently received its Arizona license and is targeting a 2027 online launch, with possible retail expansion later. The dispute is widely expected to reach the Supreme Court sometime next year, which would finally give the industry something it rarely gets: a clear answer.