Prediction markets soar ahead of the Super Bowl

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Sunday's Super Bowl is expected to spot a grounds $1.76 cardinal wagered with sportsbooks. Emboldened by loosened restrictions from national regulators, a newer signifier of betting — prediction markets — volition besides beryllium looking to currency successful connected the night.

Prediction markets person emerged successful caller years arsenic a level to spot "investments" connected the answers to a dizzying array of unknowns — including wagers connected outcomes relating to Sunday's large game.

Two of the largest prediction markets, Kalshi and Polymarket, erstwhile were targets of national enforcement actions nether the Biden administration. But a determination past week from the Commodities Futures Trading Commission, an obscure national bureau that oversees the burgeoning field, could springiness them a accidental astatine a large payout travel Sunday.

In a connection past week, bureau seat Michael Selig announced the committee volition determination distant from its 2024 regularisation connection which sought to prohibit governmental and sports-related contracts. Instead, helium said the bureau would draught "clear rules and a wide knowing that the [federal government] supports lawful innovation successful these markets."

The determination reflects the Trump administration's propulsion to lift restrictions connected alternate forms of currency and investment. Critics person noted that the 2 starring prediction marketplace companies appointed the president's son, Donald Trump Jr., to ceremonial advisory roles connected their boards of directors.

Since the national authorities has changed its presumption connected prediction markets, the stock of enactment relating to sports has expanded. Betting connected sports represents astir 90% of trading measurement connected Kalshi, says Dustin Gouker, a gaming manufacture consultant.

Gouker is besides the steadfast of the Closing Line, which provides investigation and breaking quality connected the gambling industry. He told CBS News helium wasn't amazed to perceive the Trump administration's alteration successful course, saying rule-making volition play a cardinal relation successful solidifying prediction markets' quality to turn successful the future.

"It is saying retired loud, 'Hey the national authorities wants prediction markets to exist,'" helium said. "It's a motion on the roadworthy toward prediction marketplace growth, that this isn't going distant successful the abbreviated term."

He said helium worries that sports-related contracts could further blur the lines betwixt what is sports gambling — which is not ineligible successful immoderate states — versus investing.

"We present person not conscionable sports betting, but betting connected beauteous overmuch immoderate lawsuit that you privation successful 50 states," helium said. "That's a immense happening that we've fundamentally done with precise small thought."

While the national regulator, the CFTC, has seemingly cleared the mode for governmental and sports-event related contracts, not everyone is connected committee with its abrupt growth, including the NFL. The league announced a caller determination to forestall prediction markets from gaining adjacent much traction during the game.

According to a root acquainted with the league's advertizing policy, commercials relating to prediction markets volition not beryllium permitted to aerial during the Super Bowl this Sunday. The determination came a period aft Jeff Miller, the NFL's enforcement vice president of nationalist affairs and policy, testified earlier a House committee successful December.

The league "has nary plans to enactment successful prediction markets owed to respective outstanding legal, regulatory, and commercialized concerns connected however these markets run and the imaginable interaction connected the integrity of sporting events," Miller said successful prepared remarks.

Miller warned that the ample monetary propulsion of sports-related gaming contracts could airs "substantially greater risks to contention integrity."

Kalshi says it has safeguards successful place, touting its "extensive in-house surveillance monitors for suspicious activity" alongside a concern with IC360, an integrity monitoring steadfast that is utilized by sportsbooks and sports leagues crossed the nation.

CBS News has reached retired to Polymarket for comment.

Jonathan Cohen, writer of "Losing Big: America's Reckless Bet connected Sports Gambling," told CBS News that helium believes the consequences widen beyond sports integrity.

"Sports gambling companies are not required to bash capable to support consumers, and prediction markets are required to bash adjacent little to support consumers," helium said.

Cohen worries that the emergence successful popularity of prediction markets, coupled with their nationwide entree volition person devastating impacts connected young men. A 2024 canvass from Fairleigh Dickinson University recovered that 24% of men reported astatine slightest 1 problem gambling behavior. That fig roseate to 45% for men 30 and under.

"What we've done is unleashed a technologically supercharged mentation of gambling that tin ensnare young men, and that puts young men and their finances and their intelligence wellness peculiarly astatine risk," helium said.

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