Online betting grows faster than US public health resources, experts warn as Trump backs prediction markets

A The Guardian report says the expansion of prediction markets backed by Donald Trump is worrying addiction specialists, who say gambling harms are growing “out of control” while public treatment funding is not keeping pace. For PSPs and acquiring teams, the issue is not just regulatory noise: platforms such as Kalshi and Polymarket are expanding into states where gambling resources are thin or nonexistent.

1. The Guardian says platforms like Kalshi and Polymarket let users bet on event outcomes ranging from Tony Award winners to World Cup goals. Kalshi also promoted its services heavily during the NBA finals, and Polymarket’s logo appeared on the octagon at UFC fights held at the White House on Sunday (15/6).
2. Timothy Fong, a psychiatrist specializing in addiction and a gambling-disorder researcher at the University of California, Los Angeles (UCLA), said that when access, availability, and normalization increase, participation rises too. “With more participation and engagement in risk products, there will be more problems, more side effects,” he said.
3. Kalshi, Polymarket, and similar companies reject being classified as gambling operators, which are normally regulated state by state and need prior approval in each jurisdiction. They say they offer “event derivatives” supervised at the federal level by the US Commodity Futures Trading Commission (CFTC).
4. That position has allowed prediction markets to establish themselves in states such as Utah and Hawaii, where gambling has historically been prohibited. More than a dozen lawsuits in different states are challenging that interpretation, with regulators and lawmakers arguing that the platforms should follow state gambling laws.
5. The Trump administration has been sympathetic to the companies’ argument. Last month, the president said it was “of extreme importance” that the CFTC keep “exclusive authority” over prediction markets rather than the states. “It is a big industry and we need to protect it,” Trump said. In a statement, the CFTC said the Commodity Exchange Act gave it “exclusive jurisdiction to regulate swaps, including prediction markets, in order to ensure a federal framework and avoid a patchwork of conflicting state laws.”

The practical problem for high-risk payment providers is simple: the legal framework is still being fought over, but the products are already scaling. That tends to create the kind of merchant, jurisdiction, and compliance questions that no one enjoys answering after the volume has already shown up.