Prediction markets are attracting significant attention in the United States. Individuals are wagering billions of dollars on these platforms, focusing on diverse topics such as elections, music sales, and sports outcomes. This trend is under the radar for many as these activities don’t fit the traditional definition of gambling.
Legal definitions play a significant role in the operation of these markets. Federal regulators, along with those operating the platforms, categorize prediction markets as investment venues. They treat the agreements offered in these markets as financial derivatives, rather than gambling contracts.