Kalshi and Polymarket Excluded from FTC Sports Gambling Probe
FTC probe targets traditional sportsbooks, not prediction markets
Kalshi and Polymarket will reportedly not be included in the Federal Trade Commission's investigation into deceptive practices in the online sports gambling industry, according to a report from Protos.
The FTC probe, which examines the $167 million online sports gambling market, will instead focus on traditional sportsbooks such as DraftKings and FanDuel. The investigation is expected to look into misleading advertisements and the harm caused by the industry, including rates of suicides, hospitalizations, and bankruptcies linked to sports betting.
What sources say about the probe
- The FTC evaluation is in its early stages and is being conducted by political and career staffers, according to sources familiar with the matter.
- Sources spoke to The Washington Sun about the probe.
- Kalshi and Polymarket are already under separate scrutiny from an insider trading investigation overseen by House Oversight Committee member James Comer.
New York's legal action against both firms
The state of New York has sued both Kalshi and Polymarket this year, accusing them of running illegal gambling operations that encourage problem gambling among people under 21.
The Polymarket suit referenced a study by the National Institutes of Health and the American Psychological Association linking pathological gambling to mental health disorders, suicidal behaviors, and substance abuse.
Prediction markets deny they are gambling
Neither Kalshi nor Polymarket considers itself a gambling operator. Both companies argue they should be regulated at the federal level by the Commodity Futures Trading Commission rather than by individual states.
Kalshi CEO Tarek Mansour recently said prediction markets are not gambling because they match buyers and sellers in an open financial market, unlike casinos that profit when customers lose.
Polymarket CEO Shayne Coplan last year called DraftKings and FanDuel a "duopoly" that acts against winning bettors, saying Polymarket offers derivatives and should not be regulated like sportsbooks.
Trump Jr.'s ties to both companies
Donald Trump Jr. holds advisory roles at both Kalshi and Polymarket. He owns $300,000 worth of Kalshi shares, and his investment firm, 1789 Capital, has invested $500 million in Polymarket.
Key numbers
- $167 million: size of the online sports gambling industry under FTC review
- $300,000: value of Donald Trump Jr.'s Kalshi shares
- $500 million: 1789 Capital's investment in Polymarket
What is confirmed
The FTC probe is focused on traditional sportsbooks like DraftKings and FanDuel, not on Kalshi or Polymarket. Both prediction markets face separate legal and regulatory challenges, including lawsuits from New York and an ongoing congressional insider trading investigation.
What is still unclear
It remains unconfirmed whether the FTC's exclusion of prediction markets from the probe reflects a formal policy decision or simply the current scope of the investigation. The article notes the probe is in its early stages.
Why this matters for crypto investors
Kalshi and Polymarket are two of the most prominent crypto-linked prediction markets. Exclusion from the FTC sports gambling probe could signal a regulatory distinction between traditional sports betting and prediction markets, potentially reducing near-term enforcement risk for both firms.
What happens next
The FTC probe is ongoing and in its early stages. No timeline has been announced for its completion or any resulting enforcement action.
Sources
Newisty Editorial Team covers technology, cryptocurrency, digital products, online platforms, developer tools and the wider digital economy. Our content is researched from official sources, company announcements, public documentation, market data and other primary or reputable sources. Articles are reviewed and edited before publication for clarity, accuracy and useful context.