Regulators worldwide are branding prediction markets as gambling, while Kalshi, Polymarket, and now Binance.US bet big on a very different definition.
Binance.US just made it official: the exchange will apply to the CFTC in August for a license to run its own prediction market.
It joins a stampede that already includes Coinbase, Robinhood, Gemini and DraftKings. Meanwhile, across the world and in over a dozen US states, regulators are reaching a very different conclusion about prediction markets—deeming them gambling.
Are Prediction Markets Trading or Betting?
A sportsbook is the "house": it sets the odds, takes your wager, and profits when you lose. In a prediction market, which the industry argues is an exchange, traders buy and sell yes-or-no contracts against each other, prices float with supply and demand, and the platform collects a fee for matching orders, indifferent to who wins.
Have you checked out Vortex's Prediction Market tracker yet?
That structure is the legal foundation of the industry. Kalshi is registered with the Commodity Futures Trading Commission (CFTC) as a designated contract market, the same category as CME and other major US futures exchanges, and argues its event contracts are derivatives, not wagers.
Sportsbooks, CEO Tarek Mansour told WIRED, are different in kind: "With gambling, the company is the house." When Axios pressed him on the gambling label, he pushed back and said that if event contracts count, "you're basically calling the entire financial market gambling."
Polymarket's Shayne Coplan went further, framing prediction markets as information machines rather than entertainment: "the most accurate thing we have as mankind right now," as he put it on 60 Minutes. Users profit by being right, and the resulting prices double as real-time forecasts.
Critics see a game of semantics being played. Sports contracts now drive roughly 80% of Kalshi's volume, and to a user, buying "yes" on the Chiefs looks a lot like betting on the Chiefs.
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The World Says: Prediction Markets Are Gambling
Outside the US, regulators continue to reject the financial-instrument framing. Here’s where major jurisdictions stand:
Even Gibraltar, the friendliest jurisdiction on the list, welcomed prediction markets by treating them as gambling companies. Polymarket now geo-blocks roughly 33 jurisdictions. Outside of the US, the pigeonhole is winning.
America's State vs. Federal Battle
The US is shaping up as the real battleground because its two levels of government can't agree on what prediction markets are.
The CFTC claims exclusive jurisdiction over its licensed exchanges. Meanwhile, state gaming regulators claim anything resembling a sports bet belongs to them, as well as to the casinos, sportsbooks, and tribal operators who pay for state licences.
The courts are split on it. In April 2026, the Third Circuit handed Kalshi its biggest win, ruling that New Jersey likely cannot regulate contracts listed on a federally licensed exchange. But a New York federal judge reached the opposite conclusion in July, plus Nevada has blocked Kalshi's sports and election contracts, and Arizona's attorney general filed criminal charges before a federal judge intervened. Minnesota went furthest, making it a felony to operate a prediction market, prompting the CFTC to sue the state within 24 hours. The dispute looks headed for the Supreme Court.
The gambling industry isn't staying quiet. American Gaming Association CEO Bill Miller says prediction markets are "making a mockery of congressional intent," and the AGA claims states and tribes have lost over $1 billion in tax revenue to platforms that skip licensing, age-verification, and consumer-protection rules.
Unlike the offshore casinos of an earlier era, these platforms want to operate inside the system. Polymarket, banished from the US in 2022, spent $112 million acquiring CFTC-licensed exchange QCEX specifically to return home as a regulated entity.
For these companies, achieving federal oversight is a win.
Everyone Wants In Anyway
For all the legal risk, the land grab is extraordinary. The current list of players is a who's who of industry giants.
Gemini launched event contracts in all 50 states after winning its CFTC licence. Robinhood has built its own exchange with Susquehanna. Coinbase is routing prediction trades through Kalshi while building in-house infrastructure. DraftKings, a sportsbook theoretically threatened by all this, acquired Railbird and launched its own exchange, DKeX. And now Binance.US is betting its American comeback on a DCM licence of its own.
When you look at the numbers, it's easy to see why everyone's in a rush. In March 2025, the entire sector traded around $2 billion a month. By June 2026, monthly volume had blown past $50 billion (supercharged by the FIFA World Cup). Kalshi's valuation has risen from $11 billion last December to roughly $22 billion, and Polymarket's climbed to a reported $15 billion after Intercontinental Exchange (ICE) committed up to $2 billion.
The world may continue to call it gambling. But with Wall Street, crypto exchanges, and even sportsbooks buying tables, the game isn't going anywhere. Only the rulebook is still unsettled.
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