Kalshi and Crypto.com are among prediction markets launching a national coalition.
Key Takeaways
- Kalshi and Crypto.com announced the formation of the Coalition for Prediction Markets on Thursday.
- The new alliance may give Kalshi more credibility and support in its ongoing lawsuits.
- Kalshi’s main competitor and two prediction market newcomers are notably absent from the coalition.
Prediction market operators Kalshi and Crypto.com announced the launch of the Coalition for Prediction Markets (CPM) on Thursday. CPM’s website also lists Robinhood, Coinbase, and Underdog as members.
The announcement comes at a critical juncture for prediction markets, which are striving to find solid regulatory footing. Although prediction markets are currently registered and regulated by the U.S. Commodity Futures Trading Commission (CFTC), state gambling regulators are currently challenging their legality. This is true especially for those prediction markets offering sports contracts, which mimic the offerings of sportsbooks.
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Coalition goals
Like most alliances, the Washington D.C.-based CPM will give prediction markets more leverage in government policies affecting their industry. It could also help address the questions about safety and standards that have risen in the wake of their widespread introduction.
The CPM states it wants to “expand consumer access to safe, transparent, and integrity-driven prediction markets in the United States.” Although it’s very clear the CPM is designed to combat state regulators, which it claims are not protecting consumers but are instead “pursuing regulatory capture - prioritizing control and revenue over innovation and consumer choice.”
Kalshi could have the most to gain with the CPM's launch. It is currently embroiled in legal challenges in more than half a dozen states. Demonstrating that prediction markets can offer the same legal protections, standards, and safety as state-regulated sportsbooks can only help its cause.
Sara Slane, Kalshi’s head of corporate development and CPM executive member said, “We spent years working with the CFTC because prediction markets must operate with strong federal safeguards that prevent insider trading, protect consumers, and ensure these markets remain transparent and corruption-free.”
Kalshi’s standing could also be aided if more members joined the CPM. But for now, there are some notable absentees.
Will Polymarket, DraftKings, or FanDuel join?
The CPM is in the process of enlisting more companies. The most notable missing member is Polymarket, which is in the process of re-entering the U.S. market.
Two other notable companies are also absent. DraftKings and FanDuel have recently entered the prediction markets space. Both market-leading sportsbook firms recently dropped their memberships in the American Gaming Association over the organization’s anti-prediction market bent.
When it comes to coalitions, more is better. So, it’s possible the CPM is also courting the many newcomers that have recently announced plans to become prediction market operators, including Fanatics and Betr.
