Not so long ago, the industry buzz was all about the Metaverse; then it was sweepstakes casinos; and more recently, how artificial intelligence (AI) would influence the industry. There is always a hot topic that platforms, reviewers, and pundits coalesce around. The irony is that no one really saw the arrival and significance of prediction markets (well, apart from a savvy few). Imagine how you could have cleaned up if you had predicted that this would be the next big trend?
While some platforms and developers have been caught napping, others have embraced the opportunities. We sat down exclusively with Jemma McColgan from Casino.org to get her view on what this all means for the industry.
Q: Hi Jemma, thanks so much for taking the time to share your insights on the rise of prediction markets. Before we go into what it means for the industry, could you give our users a little bit more context about what this kind of betting entails?
Hi, thanks for having me here. Prediction markets are about predicting future events. They let you trade on real-world outcomes, such as sports and politics. They are legal trading platforms where users buy and sell contracts tied to actual events.
Rather than bet against a sportsbook, you trade NO or YES contracts with other prediction traders. Each trade has two sides. So, if you are buying a YES, then someone is selling a NO. If you are selling a YES, then someone is buying a NO. The platforms do not set the odds or take a position; they just run a marketplace and settle the result when the outcome is known.
Q: In a market like the US, where gambling laws are restrictive, does this make betting more or less accessible?
The important thing to remember is that prediction markets are not sportsbooks, and the legal versions operate more like regulated marketplaces with users trading contracts on real-world outcomes as opposed to betting against the house. It is this exchange style model that is why platforms can legally offer event contracts under federal oversight.
Q: So, does this mean there is just a free-for-all among the platforms?
No, not at all. Only some platforms are legal, and what users can access and where they can access it from vary by platform and state. However, there is no doubt that they have gone mainstream, and Southpark recently created an episode around a prediction market app.
Q: Would you say they challenge the status quo in the world of gambling?
Well, they certainly open up new opportunities for people who like to have a bet. How many times have any of us kicked ourselves when we felt sure that something would happen and it did? We have probably all said, “If only I had put money on that.” Well, now punters can, and that is proving to be incredibly popular.
At Casino.org, we take all forms of gambling and iGaming very seriously. Therefore, we offer guides and reviews of prediction sites, much as we would of any other gambling site. That means we review and rate prediction market apps the same way we would other betting sites. We put them through the same rigorous process to ensure that our users can make predictions safely and with minimal risk.
As it is a new market, there are quite a lot of unknowns, so we have put together guides and advice too. Unlike the online slots, the outcomes are not governed by Random Number Generators but by real-life events. Real life can be unpredictable, so users do not want the app to be unstable!
Most prediction market apps fall into one of two types – Order Book or Buy-and-Sell interface. The former works more like a trading exchange, and the latter is a straightforward YES-or-NO trade ticket.
Q: How are these sites regulated?
It’s complicated because they are regulated at both the federal and state levels. At the federal level, they fall under the jurisdiction of the Commodity Futures Trading Commission (CFTC). This is the body that oversees the US derivatives market, with a focus on market integrity, contract permissibility under the Commodity Exchange Act, and fraud prevention.
However, the individual states retain significant authority via the gambling regulators. So even if a platform operates federally, states have a say in how its services are promoted and offered to their residents. There is particular scrutiny in states where prediction apps directly challenge sportsbooks if the contracts resemble traditional sports wagers. Some states, like Michigan, have issued public statements and even taken the platforms to court to restrict operators’ access.
Q: Could these sites be a direct threat to the industry?
Well, yes and no. It does depend so much on what is accessible and legal in the individual state. Availability can vary significantly by location. It is important for users to stay up to date with federal and home-state regulations, as rules can change quickly and affect which markets a platform can list on. Or, of course, they can keep an eye on our pages, and we will stay abreast of the news as things change. Because it is new, industry reactions remain quite volatile and unpredictable.
However, as we always seem to see, people have an innate impulse to gamble and bet. While regulators scramble to keep up with market developments, new operators emerge and offer people the playing opportunities that they are looking for. We only offer details of prediction market apps that we can verify. Our Chief Gaming Officer, Alex Korsager, manually compares our pages against the prediction app and, if anything is unclear, he contacts the operator, thereby allowing our users to make informed and accurate decisions.
Q: Is there much to choose from between the sites?
While they all operate similarly and under the same regulations, there are clear differences in the overall experience due to variations in bonuses and event coverage. For example, Kalshi offers the best overall experience, while Crypto.com is great for crypto users (no surprises there), Underdog suits fantasy-first users who want bonus entries, and Novig is the best fee-free, exchange-style sports market app.
Not so long ago, the industry buzz was all about the Metaverse; then it was sweepstakes casinos; and more recently, how artificial intelligence (AI) would influence the industry. There is always a hot topic that platforms, reviewers, and pundits coalesce around. The irony is that no one really saw the arrival and significance of prediction