Prediction markets are being aggressively sued by state governments across the United States.

As of today (April 25, 2026), nine states have officially sued various prediction market platforms in court, including Kalshi, Polymarket, Crypto.com, Gemini, and Robinhood (which is Kalshi's broker).
Some states have filed counterclaims against the CFTC (U.S. Commodity Futures Trading Commission).
The main reason for the lawsuits is almost always — prediction markets violate the state's gambling laws and are considered illegal gambling.
The debate centers on whether the CFTC (which has already licensed these four prediction markets) has regulatory authority over prediction markets — should regulation be under federal law by the CFTC, or under state law?
This essentially boils down to a fundamental question — are prediction markets really casinos?
From the perspective of state governments, they are casinos; but the CFTC does not see them as such, instead defining prediction markets as binary options markets.
Personally, I believe prediction markets cannot be classified as casinos.
There are many differences between the two:
1. Most casino games involve poker, dice, or sports betting; whereas prediction markets, besides sports betting, include financial, economic, and cryptocurrency prediction events.
2. In casinos, most bets are placed with the expectation of waiting for the result and then settling; prediction markets operate as an order book, allowing traders to realize profits or cut losses at any time before the event outcome.
3. Casinos are almost entirely games between casual players and house, with the house's advantage making it a zero-sum game; prediction markets are PvP markets, where the platform simply lists markets without directly betting against users. Users can earn money by trading shares or by market making and arbitrage (though it's difficult).
4. Casinos are purely for entertainment, with no financial attributes; prediction markets can serve as a hedging tool for traders and institutions to manage sudden events (e.g., Federal Reserve interest rate decisions and market hedging).
5. Casino odds are not accessible for use; prediction markets are based on Hayek's "wisdom of crowds," and the information is widely available. Polymarket's market data has been aggregated by major information websites like Yahoo and Bloomberg.
6. Casinos settle and process transactions through internal systems, with data that is not publicly transparent; prediction markets rely on blockchain technology for trading and settlement, using multi-party oracles for result verification.
These six points demonstrate that prediction markets and casinos are fundamentally different, even though they may seem similar.
If prediction markets are classified as gambling, then the stock market, futures market, and forex market are also gambling, right?
After all, they all involve price fluctuations, and most people lose money...