Prediction markets more like gambling than investing, Americans say
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Americans view prediction market trading as more like gambling than investing, according to a new poll by Ipsos and the American Institute for Boys and Men.
Why it matters: Prediction markets have emerged as an increasingly popular — and controversial — way to bet on everything from sports and politics to business, news and entertainment.
Driving the news: 61% of adults say prediction market trading is "closer to gambling," while 8% say it's "closer to investing," according to the poll.
- 18% say it's a mix, while 12% say it's neither.
What they did: Ipsos surveyed 2,363 adults in a poll commissioned by the American Institute for Boys and Men from Feb. 27 to March 1.
- It included an "oversample" of 18- to 24-year-old men, the institute reported.
Threat level: Young men are particularly susceptible to risky behaviors such as gambling, making the widening availability of sports contracts via prediction markets particularly problematic, says Jonathan Cohen, policy lead at AIBM.
- "The harms of sports gambling are disproportionately concentrated among younger men, and so the prediction markets are clearly the new frontier in this conversation about sports gambling," Cohen tells Axios.
The other side: Tarek Mansour, CEO of prediction market Kalshi, told Axios in April that sports event contracts are not gambling.
- "I just don't really know what this has to do with gambling," he said. "If we are gambling, then I think you're basically calling the entire financial market gambling."
State of play: Policymakers are debating the regulatory landscape for prediction markets.
- The Commodity Futures Trading Commission recently signaled plans to wage a legal battle to retain regulatory oversight of prediction markets.
- But state gaming commissions — including the influential gaming panel in Nevada — and multiple states have sought to block prediction markets from operating.
The big question: Will public opinion sway the debate?
- "If people see this as more like gambling than investing, then certainly these platforms — especially the sports contracts — should be regulated more like gambling than investing," Cohen says.
The intrigue: Awareness and usage of prediction markets are still limited.
- Only 1 in 5 Americans were very or somewhat familiar with them, according to the survey.
- And only about 4% of the respondents had used a prediction market in the last six months.
- Cohen says that means there's still time to shape the public's relationship with prediction markets and the regulatory treatment of them.
