JEFFERSON CITY, MO.- Days after Missouri’s legal sportsbooks accepted their first wagers, state gaming regulators were already deliberating how they would handle prediction markets.
- Missouri regulators are already evaluating how prediction markets fit into the state’s new sports betting landscape.
- Major operators like FanDuel, DraftKings, and Fanatics plan prediction market offerings as legal questions continue nationwide.
- States must decide how to treat sports event contracts long before federal courts deliver a final ruling.
After more than a year of preparations, Missouri Gaming Commission staff commended the successful launch of eight sportsbooks. But with countless hours behind them working on the sports betting launch, the MGC was already facing a new way to wager on sports.
The MGC is looking at existing prediction markets such as Kalshi that have offered sports event contracts for months, chair Jan Zimmerman told Covers last week. The board has not taken any action so far, but gaming regulators in Missouri - and all other states - will have to come to grips with prediction markets.
“I’m for sure watching this and how it will impact sports wagering,” Zimmerman said.
Background
Missouri voters approved sports betting on the state’s November 2024 ballot via a constitutional amendment. During that same election cycle, Kalshi and Polymarket entered the national consciousness by offering event contracts on the presidential election, along with hundreds of other topics, including pop culture, current events, and awards shows.
It wasn’t until the Super Bowl three months later that prediction markets offered similar contracts on sporting events. These contracts, which allow users to trade on the outcome (wins or losses), resembled bets at sportsbooks.
State regulators in Nevada, New Jersey, and other states subsequently challenged the legality of sports event contracts. Prediction markets have countered that they are akin to stock trading and are subject to federal government regulation, which supersedes enforcement from the individual states.
A final court ruling, likely by the Supreme Court, isn’t expected for years. In the meantime, prediction markets have become increasingly prominent - and intertwined with online sports betting providers.
Underdog told Missouri regulators it was pulling it's sportsbook license application in November, shortly before the state's sports betting launch, Gaming Commission Chair Jan Zimmerman told @Covers
— Ryan Butler (@ButlerBets) December 3, 2025
Fanatics became the first regulated sportsbook operator to launch a prediction market, offering its platform in multiple states days after it launched its sportsbook in Missouri. FanDuel and DraftKings, the two U.S. sports betting revenue market share leaders, expect to have their prediction market offerings live in the coming weeks.
Unlike Kalshi, Polymarket, and several other existing prediction markets, the sportsbook operators plan to only offer their sports event contracts in states where they don’t have sports betting licenses. This is partially due to greater financial windfalls from sportsbooks compared to sports event contracts; it’s also to avoid upsetting state regulators.
But as prediction markets' legality awaits court determination, and the sportsbook operators-turned-prediction market proprietors face growing ire from state gaming regulators for their sports event contract launches, it’s become increasingly clear that these major stakeholders believe the benefits of these actions are worth the risk.
Underdog, which had earned a Missouri sports betting license, withdrew its application days before the Dec. 1 go-live date. This came despite months of preparation and after raising billboards along major Missouri highways and signage within the St. Louis Blues’ arena.
For Underdog, a minor player in real-money sports betting but a U.S. leader in daily fantasy pick’em games, the potential for sports betting in Missouri was outweighed by the opportunities from prediction markets.
Prediction markets' future in Missouri, nationwide
The regulated sports betting industry is a far different place in December 2025, when Missouri’s sportsbooks went live, compared to November 2024 when they were first approved.
The digital-focused market leaders - FanDuel, DraftKings, and Fanatics - are separating from the historic brick-and-mortar leaders, including Caesars and MGM. The latter two have not pursued prediction markets, lest they harm their licensure in Las Vegas; not coincidentally, FanDuel and DraftKings have severed all ties with America’s gambling capital.
The eight sportsbooks that entered Missouri undoubtedly prefer a regulated sports betting market over a chance to offer sports event contracts. Prediction markets require buyers and sellers on either side of a contract, reducing potential bet types, especially individual player props that make up the most profitable wagers for sportsbooks.
But the potential to capture would-be sports bettors’ dollars remains tantalizing in states such as California and Texas that have no legal sportsbooks and likely won’t for years. Until a final court ruling, the question comes down to how states with - and without - legal sports betting deal with sport event contracts in the meantime.
