Prediction markets soar ahead of 2026 Super Bowl
Sunday's Super Bowl is expected to see a record $1.76 billion wagered with sportsbooks. Emboldened by loosened restrictions from federal regulators, a newer form of betting — prediction markets — will also be looking to cash in on the night.
Prediction markets have emerged in recent years as a platform to place "investments" on the answers to a dizzying array of unknowns — including wagers on outcomes relating to Sunday's big game.
Two of the largest prediction markets, Kalshi and Polymarket, once were targets of federal enforcement actions under the Biden administration. But a decision last week from the Commodities Futures Trading Commission, an obscure federal agency that oversees the burgeoning field, could give them a chance at a major payout come Sunday.
In a statement last week, agency chair Michael Selig announced the commission will move away from its 2024 rule proposal which sought to prohibit political and sports-related contracts. Instead, he said the agency would draft "clear rules and a clear understanding that the [federal government] supports lawful innovation in these markets."
The decision reflects the Trump administration's push to lift restrictions on alternative forms of currency and investment. Critics have noted that the two leading prediction market companies appointed the president's son, Donald Trump Jr., to formal advisory roles on their boards of directors.
Since the federal government has changed its position on prediction markets, the share of action relating to sports has expanded. Betting on sports represents roughly 90% of trading volume on Kalshi, says Dustin Gouker, a gaming industry consultant.
Gouker is also the publisher of the Closing Line, which provides analysis and breaking news on the gambling industry. He told CBS News he wasn't surprised to hear the Trump administration's change in course, saying rule-making will play a key role in solidifying prediction markets' ability to grow in the future.
"It is saying out loud, 'Hey the federal government wants prediction markets to exist,'" he said. "It's a sign along the road toward prediction market growth, that this isn't going away in the short term."
He said he worries that sports-related contracts could further blur the lines between what is sports gambling — which is not legal in some states — versus investing.
"We now have not just sports betting, but betting on pretty much any event that you want in 50 states," he said. "That's a huge thing that we've basically done with very little thought."
While the federal regulator, the CFTC, has seemingly cleared the way for political and sports-event related contracts, not everyone is on board with its sudden growth, including the NFL. The league announced a new move to prevent prediction markets from gaining even more traction during the game.
According to a source familiar with the league's advertising policy, commercials relating to prediction markets will not be permitted to air during the Super Bowl this Sunday. The decision came a month after Jeff Miller, the NFL's executive vice president of public affairs and policy, testified before a House committee in December.
The league "has no plans to participate in prediction markets due to several outstanding legal, regulatory, and commercial concerns on how these markets operate and the possible impact on the integrity of sporting events," Miller said in prepared remarks.
Miller warned that the large monetary push of sports-related gaming contracts could pose "substantially greater risks to contest integrity."
Kalshi says it has safeguards in place, touting its "extensive in-house surveillance monitors for suspicious activity" alongside a partnership with IC360, an integrity monitoring firm that is used by sportsbooks and sports leagues across the nation.
CBS News has reached out to Polymarket for comment.
Jonathan Cohen, author of "Losing Big: America's Reckless Bet on Sports Gambling," told CBS News that he believes the consequences extend beyond sports integrity.
"Sports gambling companies are not required to do enough to protect consumers, and prediction markets are required to do even less to protect consumers," he said.
Cohen worries that the rise in popularity of prediction markets, coupled with their nationwide access will have devastating impacts on young men. A 2024 poll from Fairleigh Dickinson University found that 24% of men reported at least one problem gambling behavior. That figure rose to 45% for men 30 and under.
"What we've done is unleashed a technologically supercharged version of gambling that can ensnare young men, and that puts young men and their finances and their mental health particularly at risk," he said.
