Prediction Markets Coalition Forms as Kalshi Crypto.com Seek Regulatory Clarity
Why the Coalition Was Formed
Prediction markets allow users to trade contracts based on the outcome of real-world events, ranging from economic indicators to elections and sports. As these platforms expand, they have drawn attention from both federal and state regulators. While some operators function under federal commodities regulations, several states argue that certain contracts resemble traditional gambling products.
The Coalition for Prediction Markets was created to address this uncertainty. By uniting major players under one banner, the group aims to advocate for consistent regulatory treatment and prevent a fragmented, state-by-state approach that could limit consumer access and innovation.
Key Companies Behind the Initiative
Kalshi and Crypto.com are leading the coalition, joined by well-known financial and technology firms such as Coinbase, Robinhood, and Underdog. The involvement of these companies highlights how prediction markets are no longer a niche concept. Instead, they are increasingly intertwined with mainstream finance, digital assets, and retail trading platforms.
Industry observers note that the coalition brings together both crypto-native companies and traditional fintech brands, signaling a shared interest in protecting prediction markets as a legitimate financial product rather than categorizing them solely as gambling.
Regulatory Debate Around Prediction Markets
At the center of the debate is whether prediction markets should be regulated at the federal or state level. Supporters of the coalition argue that event-based contracts fall under commodities trading and should remain federally supervised. They claim this approach ensures transparency, market integrity, and uniform consumer protections.
Opponents, including some state regulators and sportsbook stakeholders, argue that certain contracts especially those related to sports mirror sports betting and should be subject to state gaming laws. This disagreement has led to enforcement actions and legal challenges in several jurisdictions, creating uncertainty for platforms and users alike.
Goals and Policy Focus of the Coalition
The Coalition for Prediction Markets says its primary goals include promoting clear federal oversight, educating policymakers about how prediction markets function, and establishing best practices for consumer protection and market integrity. The group also plans to engage lawmakers to explain the economic and informational value of prediction markets, which are often cited for their ability to aggregate public expectations efficiently.
By coordinating advocacy efforts, the coalition hopes to shape future legislation and regulatory guidance that supports responsible growth of the industry.
What This Means for the Future
The formation of the coalition marks a turning point for prediction markets in the U.S. Rather than reacting individually to regulatory challenges, companies are now taking a unified approach. As debates over digital assets, online trading, and alternative financial products continue, prediction markets are positioning themselves as a permanent part of the financial landscape.
How regulators respond may determine whether prediction markets expand further or face tighter restrictions in the years ahead.
