Close the Event-Contract Gap

Say in federal law that a contract paying out on the result of a game is a bet, and let the states regulate it as one.

AI evaluation · not yet reviewed by a human

This evaluation was produced and sourced by an AI model; a human review is still pending. Figures and conclusions may still change. The review log is at the foot of the page.How review works →

Federally licensed exchanges now sell contracts that pay one dollar if a named team wins and nothing if it loses. Because they are filed as derivatives under the Commodity Exchange Act, they fall outside state gambling law: no state licence, no state tax, an age limit of 18 rather than 21, and no connection to the register a person signs when they ban themselves from every sportsbook in their state. Thirteen states are in litigation over it and the federal courts have mostly sided with the exchanges. This measure would amend the Act so that contracts on sporting events are treated as wagers under the law of the state where the customer sits, leaving contracts on elections, economic data and other public outcomes where they are. This evaluation looks five years ahead.

Balance

Better for the future · 0.63 previous scale

Balance on the previous scale. The Bilanz 2.0 simulation is not yet available for this evaluation. The category comes from the share of the debate on the pro side (r).

For 19 · 63 % Against 11 · 37 %

Size class: small Scale of this evaluation: Normalised Impact — unitless, calibrated to this topic. For comparison: one point here is worth roughly 200 million euro per year. What decides the money arguments here is a figure nobody has published: how much retail customers lose on an exchange for every dollar they put in. The one transaction-level study reports an average return of about minus 20 percent per contract, but it notes that across all money invested the exchange is zero-sum before fees, so that number describes longshots rather than dollars. This evaluation uses 6 percent against the 10.2 percent a sportsbook keeps; above about 10 percent, the money argument would change sides. The second setting is what the money is worth wherever it lands: an operator's receipt counts in full rather than at a reduced rate, and one step below ordinary money, because a wager buys so little in return. The customers' extra loss and the operators' extra take are therefore booked as the two ends of one payment rather than netted into a single figure. How we score →

Arguments for

Arguments against

9 arguments evaluated · Scoring v1.3 Δ absolute +8

Arguments — For

5 arguments · top 3 shown

Eighteen-year-olds lose access

6.6of 100

Every state that licenses sports betting sets the age at 21. A federally regulated exchange sets it at 18. Three years is a long time at that age, and the age at which someone starts gambling is among the strongest predictors of whether they develop a problem with it.

Value 9 · HealthImpact 2.1Plausibility 3.5

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The stream is the mental health of people in late adolescence, when the impulse control that keeps most adults out of trouble with gambling is not yet fully in place. It sits in the class this site uses for life and health, one step below the top of it because what is lost can be regained. What is priced is the condition itself rather than the money lost, which for this group is small in absolute terms and large relative to what they have. Nothing here treats an eighteen-year-old as incapable of choosing; what is counted is only that starting earlier makes a problem more likely, which is a finding rather than a judgment. The value sits one step below the maximum: the stream is health, and health that can be regained.

About 13 million Americans are aged 18, 19 or 20. If 8 percent of them would use a prediction market where a sportsbook is closed to them, in a range from 2 to 20 percent, that is roughly 1.04 million young people gaining access to sports gambling three years early. Not all of them are harmed and most are not: an average loss of 0.01 quality-adjusted years a year across the whole group is used, in a range from 0.003 to 0.03, which amounts to assuming that something like one in twenty carries a real cost and the rest carry none. That gives 10,400 quality-adjusted years a year. The figure is deliberately built as an average across everyone rather than as a rate among the affected, because nobody knows which of them are affected. The Impact is comparable to the licensing protections above and reaches a different group, which is why the two are counted separately.

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	Americans aged 18, 19 or 20		13 million people
×	Share using a prediction market because a sportsbook is closed to them Setting, range 2 to 20 percent: every licensing state sets the age at 21, the exchanges at 18 [1]	8 %	1.04 million people
×	Quality-adjusted years lost, averaged across all of them Setting, range 0.003 to 0.03: equivalent to assuming about one in twenty carries a real cost and the rest none [3]	0.01 a year	10,400 quality-adjusted years
×	Value of the years the value of a healthy life year used across this site	40,000 euro each	416 million euro
÷	Normalised Impact scale of this evaluation	200 million euro a point	2.08

Score 2.08 Impact × 9 Value × 3.5 Plausibility ÷ 10 = 6.6 of 100

That the age of first gambling predicts later problems is well documented and the mechanism is not disputed. What is unmeasured is everything specific to this case. The counterfactual is the same cohort with the exchanges closed to them, and no source counts how many under-21s hold exchange accounts, because the exchanges do not publish it and no regulator collects it. The chain has three links — the age limit differs, young people use the lower one, using it earlier raises later risk — and the middle one has no number attached. The counter-mechanism is real and unanswered: an eighteen-year-old shut out of the exchange has an offshore site and a friend's account available, so the exclusion may be nominal. The confounder in the underlying literature is the familiar one, that people who start gambling young differ in ways that also predict problems later, and the studies establishing the link are observational. Reverse causation does not arise for the policy itself. The Plausibility is low because the number of young people this actually concerns has never been counted.

evidence basis: Mechanism · P ceiling 5.5 identification: Associational · rung ceiling 5.5 band: Chain open · P 3–3.5

Counterfactual: the same cohort with exchanges closed to them; nobody counts under-21 exchange accounts. Design: associational — the age-of-onset link rests on observational studies without exogenous variation; the take-up link has no source at all. Confounder: young starters differing in ways that also predict later problems, unaddressed by the underlying literature. Direction: no reverse causation for the policy. Ceiling: associational 5.5 binds. Band: chain open, because the take-up share carries the whole quantity and the counter-mechanism — offshore sites and borrowed accounts — is unanswered.

The chain is named but the link carrying the quantity — how many 18-to-20-year-olds actually use exchanges because sportsbooks are closed to them — has no source, and the counter-mechanism that they can reach offshore sites anyway is unanswered. Read back: about a third of the time, roughly the assumed share of that cohort gains three years of early access.

Open: Exchanges hold the age distribution of their accounts and file reports with the federal regulator. Publishing it by state, against the state age limit, would settle the take-up link outright.

The protections that come with a licence

6.1of 100

A state gambling licence carries a package: an exclusion register a person can put themselves on, deposit caps, mandatory funding for treatment, and rules on how the product may be sold. A federal derivatives licence carries none of it. The same wager, placed two ways, comes with two entirely different sets of safeguards.

Value 9 · HealthImpact 1.7Plausibility 4

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The stream is mental health: gambling disorder and the depression, anxiety and suicide risk that travel with it. This site places that in the class it uses for life and health, one step below the top of it because the condition is one most people recover from. What is priced here is the person's own state, not the money they lose, which is counted separately, and not the harm to their household, which nothing available measures well enough to price. That the people concerned chose to open the account does not lower the weight — a disorder is a disorder however it began. The value sits one step below the maximum: the stream is health, and health that can be regained.

One exchange alone traded 1.7 billion dollars of notional volume in June 2026, roughly four fifths of it on sport ^[1]. Across the sector something like 24.1 billion euro a year in sports contracts is a reasonable estimate. At an average annual turnover of about 8,000 euro per active account that is roughly 3 million accounts — accounts rather than people, since one person can hold several, which is one reason the range is wide. Of those, the roughly 1.04 million held by people under 21 lose access altogether and are counted in their own argument, and about 98,000 held by adults who would not have started under gambling advertising rules are counted in theirs; about 1.86 million accounts stay and come under a licence. In the national gambling survey, 17 percent of sports bettors and 24 percent of fantasy sports players report problematic gambling behaviour many times a year; 19 percent is used here, and there is no reason the figure differs on an exchange ^[3]. That gives about 354,000 people. What the licensing package reaches — an exclusion register, deposit caps and treatment funded from the tax — is set at 12 percent of them, in a range from 4 to 25 percent: 42,500 people. Each carries a loss of 0.2 quality-adjusted years a year. The Impact is close to the age-limit gain and heavy in weight, because the group it reaches is narrow and what happens to them is not.

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	Sports event contract volume across the sector Setting, range 12 to 60 billion dollars a year [1]		24.1 billion euro
÷	Active accounts Setting, range 4,000 to 20,000 euro; accounts rather than people, since one person can hold several	8,000 euro of turnover each a year	3 million accounts
−	Accounts counted in their own arguments the age limit and the advertising rules reach these groups first; counting them here as well would count them twice	1.04 million under 21 + 98,000 adults who would not have started under advertising rules	1.86 million accounts
×	Showing problematic gambling behaviour repeatedly between the 17 percent of sports bettors and the 24 percent of fantasy sports players who report problematic behaviour many times a year [3]	19 %	353,780 people
×	Reached by the licensing protections Setting, range 4 to 25 percent: an exclusion register, deposit caps and treatment funded from the tax [4]	12 %	42,454 people
×	Quality-adjusted years lost per person a year	0.2	8,491 quality-adjusted years
×	Value of the years the value of a healthy life year used across this site	40,000 euro each	340 million euro
÷	Normalised Impact scale of this evaluation	200 million euro a point	1.7

Score 1.7 Impact × 9 Value × 4 Plausibility ÷ 10 = 6.1 of 100

Every link here is visible and none of the numbers has been measured. The counterfactual is the same customers on a federally regulated exchange with no state protections. That exclusion registers and deposit caps reach problem gamblers is supported by the limit-setting evidence from Europe, though from before-and-after comparisons rather than controlled ones, and none of it was done on an exchange ^[4]. That the rate of problem gambling among exchange customers matches that among sportsbook customers is an assumption, and the loss data now available cut against the benign reading of it: a venue where two thirds of contracts are priced below 10 cents or above 90 is a longshot market, and longshot betting is the pattern most associated with chasing ^[6]. The confounder that matters is selection — the people who seek out an exchange are not a random sample of bettors — and nothing addresses it. The counter-mechanism, that a determined customer moves to an offshore market with no protections at all, is booked as its own argument against this measure. The Plausibility is below the middle: the protections plainly do something, and how much of it reaches this particular population has never been looked at.

evidence basis: Mechanism · P ceiling 5.5 identification: Associational · rung ceiling 5.5 band: Chain closed, unevidenced · P 4–5

Counterfactual: the same customers on a federally regulated exchange without state protections. Design: associational for the harm rate — survey prevalence among online bettors with no counterfactual [3]; mechanistic for the policy link, supported only by European limit-setting studies done elsewhere [4]. Confounder: selection into exchanges by a different kind of bettor, unaddressed; the favourite–longshot pattern in the transaction data [6] suggests the selection runs toward, not away from, chasing behaviour. Direction: reverse causation is unresolved for the prevalence figure. Ceiling: associational 5.5 binds. Band: chain closed but unevidenced — every link named, the offshore counter-mechanism booked as con-2; only the measurement is missing.

Nothing measured argues against the claim; what is missing is any study of problem gambling on prediction markets specifically. The counter-mechanism, customers moving offshore, is booked separately as con-2. Read back: about half the time, state licensing protections reach roughly the share of affected customers assumed here.

Open: State exclusion registers record who has self-banned. Matching those lists against exchange account data — which the exchanges hold — would show directly how many excluded gamblers are trading sports contracts, and could carry P to 6.

States collect on it

2.4of 100

A sportsbook hands its state between a tenth and half of what it keeps. An exchange selling the identical wager hands it nothing, because a derivative is not a gambling product. Moving the volume into the licensed channel moves the tax with it.

Value 5 · Public financesImpact 0.9Plausibility 5.5

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The stream is state and local revenue, priced at the middle of the scale like any other public money. What is counted here is only the receiving end of a transfer whose paying end is the customers' loss at the sportsbook, which is netted inside the argument on what the same bet costs at a sportsbook rather than booked as a separate cost. Booking the whole sum on both sides would say something false about what the measure does. Several states earmark this money for problem gambling treatment, which is not counted separately because an earmark is a budgeting choice rather than a second good. The value is the middle of the scale, the level this site uses for public money whatever it is spent on.

About 24.1 billion euro a year of sports contracts would come under state gambling law, counted at the dollar each contract pays out, which is what its two sides put in between them ^[1]. Half of that is retail customers' money, and 65 percent of it is assumed to reach a licensed sportsbook — 7.83 billion euro of handle. American sportsbooks keep 10.2 percent of what is staked, and states take about 22 percent of that in tax, which is what the 2025 figures of 16.96 and 3.71 billion dollars imply ^[2]. Applied here that is 176 million euro a year, in a range from 70 to 400 million. The euro carries the standard weight of one for public money. The exchanges' own fee revenue, which is federally rather than state taxed, is not counted. The Impact is the smallest gain here and it is the one figure in the debate that follows almost entirely from published tax rates.

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	Sports event contract volume [1]	notional, one dollar per contract	24.1 billion euro
×	Put in by retail customers Setting, range 35 to 65 percent: every contract has two sides, and the professional side posting prices does not move to a sportsbook	50 %	12.05 billion euro
×	Share reaching a licensed sportsbook	65 %	7.83 billion euro
×	Kept by the sportsbook 16.96 billion dollars of 166.94 staked in 2025 [2]	10.2 %	799 million euro
×	Taken in state tax 3.71 billion dollars of 16.96 in 2025 [2]	22 %	176 million euro
×	Weight of a euro in a state budget the standard weight for public money on this site	1.0	176 million euro
÷	Normalised Impact scale of this evaluation	200 million euro a point	0.88

Score 0.88 Impact × 5 Value × 5.5 Plausibility ÷ 10 = 2.4 of 100

The tax arithmetic is not in question: rates are published, sportsbook revenue is reported monthly, and the ratio between them is measured rather than modelled ^[2]. The counterfactual is the current position, in which the same wagers generate no state revenue at all. What is estimated is how much volume actually arrives in the licensed channel, and that is the same number carrying the argument on what the same bet costs at a sportsbook, so the two move together. The confounder that matters is that customers used to a low stated fee may bet less once they face a sportsbook's margin; how much less has not been measured, and the switching share of 65 percent is set with that in mind. Reverse causation does not arise. The Plausibility is at the upper end of what a projection can carry: the tax rate is published and only the volume it applies to is estimated.

evidence basis: Projection · P ceiling 6 identification: Definitional · no rung ceiling

Counterfactual: the current position, in which sports event contracts generate no state gambling tax. Design: definitional — tax follows from published rates applied to reported revenue [2]; the estimated element is the volume that switches channel. Confounder: customers betting less once they face a sportsbook's margin; not measured. Direction: not applicable. Ceiling: projektion 6.0 binds. Parameter coupling: the 65 percent switching share is shared with con-1, con-3 and pro-6. Movement: the receiving end of a payment whose paying end is con-1.

The advertising comes under rules

2.4of 100

Because this is not legally gambling, none of the rules on gambling advertising apply to it. The football league has banned prediction market commercials outright, alongside tobacco and firearms, so the marketing moved to paid creators: 140 sponsored videos from one platform in ninety days, 101 from the other, plus social posts that are barely labelled as advertising and promo codes offering bonuses.

Value 9 · HealthImpact 0.8Plausibility 3.5

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The stream is the same one the argument above counts — gambling disorder and what travels with it — reaching a different group of people. It carries the same weight, one step below the top of the scale. What separates the two is who they concern: that argument is about protecting people already trading, this one is about people who would never have started. Nothing here is priced for the deception of an undisclosed advertisement as such, which is a wrong of a different kind and is dealt with by advertising law rather than by gambling law. The value sits one step below the maximum: the stream is health, and health that can be regained.

Roughly 3 million accounts trade sports contracts, and the sector is growing fast enough that acquisition is where the money goes. A quarter of accounts, about 750,000, are assumed to have been acquired in a year through paid creator content or a bonus offer, in a range from a tenth to a half — one platform sponsored at least 140 YouTube videos in ninety days and the other at least 101, alongside social posts that are undisclosed or barely labelled and promotional codes offering credit to new customers ^[7]^[9]. Of those, a fifth would not have started under the advertising rules a state gambling licence carries, in a range from a twentieth to a half: 150,000 accounts. About a third of them belong to people under 21, who are counted in the argument on the age limit; that leaves about 98,000 adults. Applying 19 percent — between the 17 percent of sports bettors and the 24 percent of fantasy sports players the national survey finds with problematic behaviour — gives about 18,600 people, each carrying a loss of 0.2 quality-adjusted years a year ^[3]. That the football league placed these products in the same prohibited advertising category as tobacco and firearms is not evidence of harm, but it is evidence that the people closest to the market do not regard the current arrangement as normal ^[8]. The Impact is the smallest of the health gains and it reaches the one group the other protections cannot: people who are not customers yet.

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	Accounts trading sports contracts [1]		3 million accounts
×	Acquired through paid creator content or a bonus offer Setting, range 10 to 50 percent: one platform sponsored at least 140 YouTube videos in ninety days and the other at least 101, alongside barely labelled social posts and promotional codes [7][9]	25 %	750,000 accounts
×	Who would not have started under gambling advertising rules Setting, range 5 to 50 percent: the one national test of an advertising ban, Italy's in 2019, produced no measured reduction in either direction, which is why this share is low	20 %	150,000 accounts
×	Held by adults the under-21 share is counted in the argument on the age limit	1.96 of 3 million accounts	98,000 people
×	Showing problematic gambling behaviour between the 17 percent of sports bettors and the 24 percent of fantasy sports players who report problematic behaviour many times a year [3]	19 %	18,620 people
×	Quality-adjusted years lost per person a year	0.2	3,724 quality-adjusted years
×	Value of the years the value of a healthy life year used across this site	40,000 euro each	149 million euro
÷	Normalised Impact scale of this evaluation	200 million euro a point	0.75

Score 0.75 Impact × 9 Value × 3.5 Plausibility ÷ 10 = 2.4 of 100

The marketing is documented and everything downstream of it is assumed. The counterfactual is the same platforms under state advertising rules, which no American jurisdiction has yet applied to them. That the advertising exists at this scale is a matter of record: sponsorship counts are published by tracking services, the undisclosed nature of much of it has been reported, and promotional codes are visible on the platforms themselves ^[7]^[9]. What has no measurement is the link that carries the whole quantity — how many customers advertising actually creates rather than merely reallocates between platforms. The wider evidence on gambling advertising restrictions is discouraging rather than encouraging: Italy banned gambling advertising outright in 2019, and what followed has never been measured against a country that kept advertising — its football authority and its Senate call the ban ineffective without data — so the one national test offers no reduction to point to, which is why this figure sits low. The confounder is that a fast-growing product attracts users through word of mouth and press coverage that no rule reaches. Reverse causation does not arise. The Plausibility is low because the number of customers advertising creates has never been measured and the nearest attempt to restrict it elsewhere produced no reading in either direction.

evidence basis: Mechanism · P ceiling 6 identification: Mechanistic · rung ceiling 6 band: Chain open · P 3–3.5

Counterfactual: the same platforms under state gambling advertising rules — not observed anywhere. Design: mechanistic — the marketing volume is documented [7][9], the conversion to new customers is not. Confounder: organic growth through press and word of mouth that no advertising rule reaches; unaddressed. Direction: no reverse causation. Ceiling: mechanistic 6.0 binds. Band: chain open, because the customer-creation link carries the quantity, has no measurement, and the Italian advertising ban, the one national test, cannot be read in either direction.

The chain is named but the link carrying the quantity — how many customers advertising creates rather than reallocates — is unmeasured, and Italy's 2019 advertising ban, the one national test, has never been evaluated against a comparison. Read back: about a third of the time, advertising rules keep out roughly the number of new customers assumed here.

Open: Sponsorship spending and new-account numbers are both known to the platforms and to their creator partners. Account growth against sponsorship volume, across the states that have already blocked these exchanges, would test the link within a year.

What the venues take, on balance

1.2of 100

Money the customers lose does not vanish. A sportsbook keeps a tenth of every stake where the exchange kept a fee and paid the rest out between customers, so the measure moves receipts from one set of companies to another. On balance slightly more is taken than before, and it is taken by operators rather than by the professionals posting prices.

Value 3 · Income without a returnImpact 1.1Plausibility 3.5

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The stream is money companies take in, and money counts in full wherever it lands — an operator's euro is not worth less because of who owns the company. What places it below ordinary money is what stands opposite it: a grocer's revenue pays for groceries, while a stake buys a wager that on average returns less than it cost. Income taken with so little given back is real income, and it is counted two steps below the middle of the scale. The tax share of the same money keeps the middle, because what it buys is chosen by a legislature. Nothing is counted here for the fairness of who gets to take it. The value is well below the middle, because the money is real and what is given for it is not.

Three receipts move. Sportsbook operators take 10.2 percent of 7.83 billion euro of handle and hand 22 percent of it to the states, keeping about 623 million euro ^[2]. The exchange side — the platform's fee and what the professionals posting prices earned from retail customers — no longer receives the 6 percent it was taking on that same handle, about 470 million euro ^[6]. Offshore operators pick up the wider margin on the volume that leaves American jurisdiction, roughly 72 million euro, the half of the offshore loss that is a receipt rather than a refusal to pay. On balance the receiving side takes about 225 million euro a year more than before, counted at full weight. It is the smallest of the money streams and the least certain in its sign, because it is a difference between two large figures, one of which has never been measured in dollars. The Impact is small, and it exists so that the customers' extra loss is not counted as though the money disappeared.

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	Take of sportsbook operators after tax the state's 22 percent is booked in the argument on tax [2] [2]	10.2 % × 78 % × 7.83 billion	623 million euro
−	Takings the exchange side no longer receives the platform fee and what the professionals posting prices earned from retail customers; rests on the same unmeasured figure as the customers' argument [6]	6 % × 7.83 billion	153 million euro
+	Wider margin picked up offshore the half of the offshore loss that is a receipt rather than a refusal to pay	4 % × 1.81 billion	225 million euro
×	Weight of a euro received money counts in full wherever it lands; what is given back for it is carried by the value, not by the weight	1.0	225 million euro
÷	Normalised Impact scale of this evaluation	200 million euro a point	1.13

Score 1.13 Impact × 3 Value × 3.5 Plausibility ÷ 10 = 1.2 of 100

This carries the plausibility of the argument it mirrors, and for the same reason: it is built from the identical quantities. The sportsbook hold and the tax rate are regulatory returns ^[2]. What is not measured is the dollar loss of retail customers on the exchange, and it enters here with the opposite sign to the way it enters the customers' argument — if the exchange was taking more than the 6 percent assumed, the exchange side loses more and this figure shrinks or turns negative. The counterfactual is the current position, with the volume on the exchanges. The confounder that matters is the same one: how much less customers bet once they face a sportsbook's margin, which nobody has measured. Reverse causation does not arise. The Plausibility is low, identical to the argument whose quantities it shares, because the same unmeasured figure drives both.

evidence basis: Mechanism · P ceiling 6 identification: Mechanistic · rung ceiling 6 band: Chain open · P 3–3.5

Counterfactual: the current position, with the volume on the exchanges. Design: mechanistic — the sportsbook hold and tax rate are regulatory returns [2]; the exchange side's takings rest on the same unmeasured dollar-loss figure that carries con-1 [6]. Confounder: reduced betting at a sportsbook's margin, unmeasured. Direction: no reverse causation. Ceiling: mechanistic 6.0 binds; the finding band binds below it. Movement: the receiving ends of the payments whose paying ends are con-1 and, in part, con-3.

The chain is named but rests on the same unmeasured figure as the customers' argument, and here it enters with the opposite sign: if the exchange was taking more than the 6 percent assumed, this gain shrinks or becomes a loss. Read back: about one time in three, the receiving side takes roughly the assumed amount more than before.

Open: Dollar-weighted returns for the maker and taker sides from the exchanges' own transaction data would fix both this figure and the customers' argument at once.

Arguments — Against

4 arguments · top 3 shown

The forecasts go with the volume

4.3of 100

Prediction markets produce a continuously updated probability for anything they list, and those numbers are used by journalists, researchers and companies. Sport is four fifths of the volume that pays for the platform. Take it away and the markets on elections, interest rates and public health may not survive on their own.

Value 7 · Public debateImpact 1.8Plausibility 3.5

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The stream is the quality of public information: a number that says how likely something is, produced by people with money at stake rather than by anyone with an argument to make. This site places that in the class it uses for participation and the conditions of public debate, above money and below health. The value is not in any single forecast but in having an independent series at all, which is why removing the volume that funds the platform matters more than removing any one market. Nothing here is counted for the entertainment of following the odds, which belongs with the enjoyment of betting and is not priced in this evaluation. The value sits in the upper middle of the scale, at the level this site uses for the conditions of public debate.

Sport is about four fifths of the volume on the largest exchange, and it is the volume that pays for the technology, the compliance and the market-making that keep the other contracts liquid ^[1]. Removing it does not automatically end the election and economic markets, but it removes the business that supports them. What those forecasts are worth has no market price, so this evaluation sets one: 350 million euro a year, in a range from 50 million to 1 billion. The lower end treats them as a curiosity that better-funded polling and forecasting already supply; the upper end treats them as a genuinely superior instrument whose accuracy in the 2024 and 2026 election cycles is now documented. This is the least grounded number in the debate and it is stated as a price rather than derived. The Impact is small, and it is the one stream here that would be entirely avoidable by writing the measure to exempt the platforms rather than the contracts.

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	Share of exchange volume that is sport [1]	four fifths on the largest platform	80 percent
=	Value set on the forecasting series the volume supports Setting, range 50 million to 1 billion: the low end treats them as a curiosity that polling already supplies, the high end as a superior instrument whose accuracy is documented	350 million euro a year	350 million euro
÷	Normalised Impact scale of this evaluation	200 million euro a point	1.75

Score 1.75 Impact × 7 Value × 3.5 Plausibility ÷ 10 = 4.3 of 100

Two things would have to hold and neither has been shown. The counterfactual is the exchanges continuing with their non-sports contracts alone, and nobody has established that they could not: the platforms existed before sports contracts were listed, on much smaller volumes, and several operate profitably outside the United States without them. That is a serious counter-argument to the whole chain and it is unresolved. Beyond it sits the question of what the forecasts are worth, which has a literature — prediction markets have repeatedly matched or beaten polling averages — but no method for pricing. The confounder in that literature is that the markets read the polls, so their accuracy is partly borrowed rather than independent, and the transaction data now available show the same prices carrying a systematic favourite–longshot bias, which is a caution about treating them as clean probabilities ^[6]. Reverse causation does not arise. The Plausibility is low: the claim rests on a price nobody has estimated and on a business-model assumption that the platforms' own history argues against.

evidence basis: Plausibility · P ceiling 5 identification: Mechanistic · rung ceiling 6 band: Chain open · P 3–3.5

Counterfactual: the exchanges continuing with non-sports contracts alone — which their own pre-sports history suggests is possible. Design: mechanistic — chain named (sports volume funds the platform → platform sustains other markets → forecasts exist), with the first link contradicted by the platforms' own history. Confounder: prediction markets reading the polls, so their forecasting accuracy is partly borrowed; and the documented favourite–longshot bias in their prices [6], which cautions against treating them as clean probabilities. Direction: no reverse causation. Ceiling: plausibilitaet 5.0 binds because the quantity is a stated price. Band: chain open, since the business-model link is unresolved and the price carries everything.

The chain is named but its first link — that the platforms cannot sustain non-sports markets without sports volume — is contradicted by their own history of operating before sports contracts were listed. Read back: about a third of the time, removing sports contracts costs the public the forecasting series as well.

Open: Several states already block these exchanges. Comparing the liquidity of election and economic contracts before and after those blocks took effect would test the business-model link directly.

The same bet costs more

3.7of 100

An exchange matches one customer against another and takes a fee of one or two percent; a sportsbook takes the other side itself and keeps about a tenth of everything staked. What retail customers lose on an exchange is the fee plus what the professionals posting prices earn from them, and nobody has published that in dollars. On the figures used here, pushing them into sportsbooks costs them money.

Value 5 · Household budgetsImpact 2.1Plausibility 3.5

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The stream is money, priced at the middle of the scale. What is counted here is what the customers who move lose beyond what the exchange was taking from them; it counts above face value, at 1.3, because the losses concentrate among people under financial pressure. Where that money goes is counted separately rather than netted away inside this argument: part reaches state treasuries, which is its own argument in favour, and the rest is an operator's receipt, which is another. Booking the whole movement as a single net figure, as earlier versions did, priced an operator's euro at half of anyone else's and hid that the sum has two ends. What the bettor loses along with the money — the ability to sell out of a position before an event ends — is not priced here. The value is the middle of the scale, and the position of the people paying is carried by the Impact.

About 24.1 billion euro a year of sports contracts trades on the exchanges, counted at the dollar each contract pays out — which is what the two sides of a contract put in between them ^[1]. Half of that is assumed to come from retail customers, in a range from 35 to 65 percent; the professional side posting prices does not move to a sportsbook. Of the retail 12.05 billion, 65 percent is assumed to reach a licensed sportsbook: 7.83 billion euro of handle. A sportsbook keeps 10.2 percent of what is staked ^[2]. On the exchange, before fees, money only changes hands between customers, so what retail customers lose in dollars is the fee plus what the professionals earn from them; the published average return of minus 20 percent is an average across contracts, dominated by cheap longshots, and not a share of the money ^[6]. Six percent is used, in a range from 2 to 15 percent. The same customers therefore lose 4.2 points more on every euro staked: 329 million euro a year, counted at 1.3 because of who carries it — about 177 euro each across the accounts that move, far below the share of a household budget at which a larger figure would apply. That is 428 million euro a year. The Impact is the largest money stream in this debate, and its sign rests on one unmeasured figure: above about 10 percent, the exchange would be the dearer venue.

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	Sports event contract volume Setting, range 12 to 60 billion dollars a year [1]	notional, one dollar per contract	24.1 billion euro
×	Put in by retail customers Setting, range 35 to 65 percent: every contract has two sides, and the professional side posting prices does not move to a sportsbook	50 %	12.05 billion euro
×	Share reaching a licensed sportsbook Setting, range 40 to 85 percent: some customers stop, some go offshore	65 %	7.83 billion euro
×	Additional loss per euro staked Setting on the exchange figure, range 2 to 15 percent: before fees the exchange is zero-sum across all money invested, so retail customers lose the taker fee plus what the professionals earn from them; the published minus 20 percent is an average across contracts, not across dollars [6]. The sportsbook figure is 16.96 billion dollars kept from 166.94 billion staked [2] [2][6]	10.2 % kept by a sportsbook against 6 % lost on the exchange	329 million euro
×	What the money is worth to the customers losing it retail customers, among whom the losses concentrate; about 177 euro each a year, well below the share of a household budget at which a larger figure would apply	1.3	428 million euro
÷	Normalised Impact scale of this evaluation	200 million euro a point	2.14

Score 2.14 Impact × 5 Value × 3.5 Plausibility ÷ 10 = 3.7 of 100

The sportsbook figure is a regulatory return: 16.96 billion dollars kept from 166.94 billion staked in 2025 ^[2]. The exchange figure is not measured. The only transaction-level study reports returns per contract, and states itself that before fees the average return across all money invested is zero; its minus 20 percent says how often cheap contracts lose, not how much money retail customers lose ^[6]. What customers lose in dollars is the taker fee — 1.75 cents on a 50-cent contract — plus whatever the professionals posting prices earn from them, and that split has not been published. The counterfactual is the same customers at a sportsbook; no design links the two populations. The confounder that matters is betting appetite: longshot buyers who move may choose parlays, where a sportsbook keeps 25 to 30 percent, which would enlarge this argument; against it, an exchange lets a customer sell out of a position, so part of what they pay there buys something a sportsbook does not supply. Reverse causation does not arise. The Plausibility is low: one of the two prices is measured, the other is not, and the sign of the argument hangs on it.

evidence basis: Mechanism · P ceiling 6 identification: Mechanistic · rung ceiling 6 band: Chain open · P 3–3.5

Counterfactual: the same retail customers staking at a licensed sportsbook — not observed. Design: mechanistic — the sportsbook hold is a regulatory return [2]; the dollar loss of retail customers on the exchange is a setting derived from the zero-sum structure and the taker fee, because the published returns are per contract, not per dollar [6]. Confounder: betting appetite (parlays at 25 to 30 percent margin) against the option to sell out of a position; unresolved. Direction: no reverse causation. Ceiling: mechanistic 6.0 binds; the finding band binds below it. Movement: only the customers' end is booked here; the state's share is pro-2 and the operators' net take is pro-6, each at the same plausibility. Parameter coupling: retail share and switching share are shared with pro-2, pro-6 and con-3.

The chain is named — customers move, a sportsbook keeps 10.2 percent, the exchange cost them less — but its middle link has no measurement: the only transaction study gives per-contract returns and itself notes that the exchange is zero-sum across money before fees [6]. Read back: about one time in three, retail customers lose roughly the assumed amount more at a sportsbook than on an exchange.

Open: Dollar-weighted returns for the maker and taker sides from the exchanges' own transaction data — the study already holds them per contract — would give the exchange figure directly and settle the sign.

Some of it goes where nobody is looking

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Prediction markets on sport existed offshore for years before a licensed American exchange listed them, and American customers reached them without difficulty. Closing the regulated version does not close the market. What it closes is the version that files reports.

Value 5 · Household budgetsImpact 0.9Plausibility 3.5

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The stream is money lost where there is no recourse, priced at the middle of the scale like other money. An offshore or crypto-settled market has no age check worth the name, no segregated customer funds, no reporting obligation and no authority a customer can complain to. What is priced here is both the transfer that does not stop and the extra harm of it happening beyond reach. The problem gambling that follows a customer offshore is counted in the argument on licensing protections rather than a second time here, since it is the same person and the same disorder. The value is the middle of the scale, because the stream is money and the absence of protection around it is priced in the Impact.

Of the 12.05 billion euro retail customers put into sports contracts a year, 15 percent is assumed to move to markets outside any American regulator, in a range from 5 to 35 percent — 1.8 billion euro. For that share the licensing protections counted above do not arrive and the state tax does not either; the customers simply carry on somewhere with fewer safeguards than they had before the measure. The loss is set at 8 percent of the migrating money, in a range from 3 to 20 percent: an offshore book keeps about as much as a licensed one, some 4 points more than the 6 percent assumed lost on the exchange, and the absence of any recourse — withheld winnings, frozen balances — adds about as much again. That is about 145 million euro a year, counted at 1.3 like the customers' other money: 188 million. Of the two halves, the wider margin is an operator's receipt and is counted as such on the other side; what is taken by refusing to honour a bet is not, because money kept that way is not a receipt anyone is entitled to. Crypto-settled markets make this easier than it was for offshore sportsbooks, because there is no payment processor to block. The Impact is small beside the health gains, and it eats directly into the protections that are part of the case for the measure.

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	Sports event contract volume [1]	notional, one dollar per contract	24.1 billion euro
×	Put in by retail customers Setting, range 35 to 65 percent: the professional side does not follow its customers offshore	50 %	12.05 billion euro
×	Share moving beyond any American regulator Setting, range 5 to 35 percent: crypto-settled markets have no payment processor to block, but some platforms geofence effectively	15 %	1.81 billion euro
×	Additional loss per euro that goes there Setting, range 3 to 20 percent: an offshore book keeps about as much as a licensed one, some 4 points above the 6 percent assumed lost on the exchange, plus about as much again for the absence of any recourse	8 %	145 million euro
×	What the money is worth to the customers losing it retail customers, among whom the losses concentrate	1.3	188 million euro
÷	Normalised Impact scale of this evaluation	200 million euro a point	0.94

Score 0.94 Impact × 5 Value × 3.5 Plausibility ÷ 10 = 1.6 of 100

The pattern is established and the size is not. Offshore prediction markets on sport operated for years with American customers before a licensed exchange listed the same contracts, which is the precedent this argument rests on, though it is a description rather than a measurement — nobody counted the American volume on those platforms. The counterfactual is the current position with a licensed alternative available. The chain is short and visible: the regulated version closes, the customer wants to continue, an unregulated one is reachable. The counter-mechanism is genuine and only partly answered: several of those offshore platforms geofenced American users under regulatory pressure and some now do so effectively, which would hold the migrating share below the figure used. That is why the range runs down to 5 percent. Reverse causation does not arise. The Plausibility is low because the migrating share has never been measured and the effectiveness of geofencing against it is unresolved.

evidence basis: Precedent · P ceiling 6 identification: Mechanistic · rung ceiling 6 band: Chain open · P 3–3.5

Counterfactual: the current position with a licensed alternative available. Design: mechanistic — offshore prediction markets with American customers are a described precedent rather than a measured one; no source counts the volume. Confounder: geofencing under regulatory pressure, which some platforms now apply effectively; partly answered by the low share used, not resolved. Direction: no reverse causation. Ceiling: mechanistic 6.0 binds below the praezedenz ceiling of 8.5. Movement: the wider offshore margin is booked as a receipt in pro-6; the withheld half has no second end, because money kept by refusing to pay out is not counted as anyone's legitimate gain. Band: chain open, because the migrating share carries the quantity and the geofencing counter-mechanism is unresolved.

The chain is named but the migrating share has never been counted, and the counter-mechanism — geofencing that some offshore platforms now apply effectively — is unresolved. Read back: about a third of the time, roughly the assumed share of volume moves beyond any American regulator.

Open: Thirteen states are already enforcing against these exchanges. Comparing crypto-settled market activity from those states against the rest, before and after enforcement, would measure the migration directly.

An exchange will not throw you out for winning

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A sportsbook that keeps losing to a customer restricts or closes their account, which is legal everywhere and routine. An exchange has no position to protect, so it does not care who wins. It also holds customer money in segregated accounts under federal rules and does not lend against a bet.

Value 5 · Household budgetsImpact 0.6Plausibility 4

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The stream is money and the security of money: what a skilled bettor is prevented from earning when a sportsbook closes their account, and what any customer stands to lose if an operator fails holding their balance. It is priced at the middle of the scale like other money. Nothing here is counted for the fairness of being restricted for winning, which is a grievance rather than a stream, nor for the convenience of trading out of a position, which is a feature rather than a harm. The great majority of customers are never restricted and never affected by either, which is why the figure is small. The value is the middle of the scale, because the stream is money and its security.

Two small things sit under this argument. The first is the skilled minority: perhaps 50,000 people trade sports contracts with a genuine edge and would be limited or closed by a sportsbook within months, losing something like 2,000 euro a year each — about 100 million euro, in a range from 20 to 300 million. The second is the safety of customer balances: the exchanges hold them in segregated accounts under federal rules, while sportsbook balances are in several states an ordinary claim against the company. Against perhaps 2 billion euro of balances, an operator failure at one percent a year with half the money recovered gives about 10 million euro of expected loss. Together roughly 110 million euro a year. The transaction data cut against the first half rather than for it: on the exchange, the side posting prices earned minus 9.64 percent, so even the skilled were losing, just less ^[6]. The Impact is the smallest in this debate and it is the one argument for exchanges that survives their own loss data.

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	Customers trading with a genuine edge who a sportsbook would restrict Setting, range 20,000 to 150,000: the measured maker return of minus 9.64 percent suggests the winning group is small [6]		50,000 people
×	Lost to each a year Setting, range 400 to 6,000 euro	2,000 euro	100 million euro
+	Expected loss from an operator failure holding unsegregated balances exchange balances are segregated under federal rules; sportsbook balances are an ordinary claim in several states	2 billion euro × 1 % × half recovered	110 million euro
÷	Normalised Impact scale of this evaluation	200 million euro a point	0.55

Score 0.55 Impact × 5 Value × 4 Plausibility ÷ 10 = 1.1 of 100

The premises are documented and the sizes are constructed. That sportsbooks restrict winning customers is universal practice, openly acknowledged and legal in every American jurisdiction; that federally regulated exchanges segregate customer funds follows from the rules they operate under. The counterfactual is the current position with both venues available. What has no source is the number of customers with a genuine edge, and the transaction data suggest it is smaller than the argument assumes: the makers' average return per contract was minus 9.64 percent, so even the side posting prices lost on the typical contract ^[6]. That cuts against the load-bearing quantity, though less than it seems: it is an average across contracts rather than dollars, taken across a population that certainly contains both winners and losers, and the argument concerns the winners. Reverse causation does not arise. The Plausibility is below the middle: both premises are certain and the number of people who actually benefit is contradicted by the same data that carry the rest of this evaluation.

evidence basis: Mechanism · P ceiling 6 identification: Mechanistic · rung ceiling 6 band: Chain closed, unevidenced · P 4–5

Counterfactual: the current position with both venues available. Design: mechanistic — sportsbook restriction of winning customers and exchange fund segregation are documented practice; the number of customers with an edge is constructed. Confounder: the makers' measured average return of minus 9.64 percent, which suggests the winning group is smaller than assumed [6]; named and only partly answered, since an average conceals a distribution. Direction: no reverse causation. Ceiling: mechanistic 6.0 binds. Band: chain closed but unevidenced — links named, the counter-finding stated, only the count of skilled customers missing.

The premises are documented; what is missing is any count of customers with a genuine edge, and the measured maker return of minus 9.64 percent suggests that group is small. The counter-finding is named and partly answered by the fact that an average conceals a distribution. Read back: about half the time, roughly the assumed number of skilled customers lose access to a venue that tolerates them.

Open: The exchanges hold the distribution of customer returns, not just the average. Publishing the share of accounts with positive lifetime returns would settle the size of this argument outright.

Summary

Treating sports event contracts as wagers brings them under what a state licence carries — an exclusion register, deposit rules, an age limit of 21 and advertising rules — and that reaches people who now bet without any of it. Against that, customers pushed from an exchange into a sportsbook probably pay more for the same bet: a sportsbook keeps a tenth of every stake, while on an exchange money changes hands between customers and what retail customers lose is the fee plus what the professionals earn from them. The only transaction-level study reports an average return of minus 20 percent per contract, but that is an average across contracts dominated by cheap longshots, not a share of the money, so it does not show exchanges to be the dearer venue. What the customers pay extra does not disappear: states collect a share of it, and the rest moves from the exchange side to sportsbook operators, counted in full but one step below ordinary money, because a wager returns so little for it. The marketing that no rule reaches — creator content and barely labelled posts — is a smaller gain. A share of the volume plausibly leaves for offshore markets, and the election and economic forecasts lose the business that funds them. The balance leans towards the measure because the health gains carry weight, while the money streams nearly cancel and their sign rests on the unmeasured exchange loss.

Outlook — effect over time

Better for the future · 0.63 previous scale

Sources

DLA Piper: Legal status at odds: tracking developments in prediction markets and sports betting. dlapiper.com
Sports Handle: US Sports Betting in 2025 Reaches Record Highs. sportshandle.com
National Council on Problem Gambling: National Survey on Gambling Attitudes and Gambling Experiences 3.0. ncpgambling.org
Journal of Gambling Studies, comparative policy review: Limit-setting in online gambling: a comparative policy review of European approaches. pmc.ncbi.nlm.nih.gov
Congressional Research Service: CFTC Issues Proposed Rule Regarding Prediction Markets. congress.gov
Bürgi, Deng and Whelan, University College Dublin: Makers and Takers: The Economics of the Kalshi Prediction Market. karlwhelan.com
Tubefilter: Prediction markets like Kalshi and Polymarket are everywhere, but not at the Super Bowl. tubefilter.com
Front Office Sports: NFL Won't Allow Prediction-Market Super Bowl Commercials. frontofficesports.com
Slate: Polymarket and Kalshi's secret ads are flooding social media. slate.com

Last reviewed by Claude Opus 5 · September 16, 2026 · 5× AI, not yet reviewed by a human

September 16, 2026AI reviewClaude Opus 5re-scored
Anbieterempfang nach Julians Entscheidung vom 16.09. von V 4 auf V 3 gesenkt (pro-6): Pro 3,73 zu Con 2,16, r 0,64 auf 0,63 — Kategorie nach altem Maßstab unverändert besser.
September 16, 2026AI reviewClaude Opus 5re-scored
Glücksspiel-Regel 16.09.: Buchungsregel gluecksspiel-gegenleistung/1.0 angewandt: Empfaengerseite Gewicht 1 und V 4 statt 0,5 — con-1 in Zahlerbein (0,4277) und Empfaengerseite pro-6 (V 4, 225 Mio) geteilt, con-3 mit Spielergewicht 1,3, normalisierung erstmals an allen Geldstroemen; r 0,64
September 14, 2026AI reviewClaude Opus 5re-scored
Gesamtprüfung 08.09. nachgearbeitet: Kalshi −20 % sind Kontrakt-, nicht Dollarrenditen (Papier: vor Gebühren Nullsumme): pro-4/con-4 entfallen, v1-con-1 kehrt mit 6 % Börsenverlust zurück (P 3,5); Nominalvolumen auf Kleinkundengeld, Gruppen in pro-1/pro-5 getrennt, con-5 110 statt 150 Mio; r 0,69 → 0,64.
September 6, 2026AI reviewClaude Opus 5re-scored
Re-scored after checking the channel-cost claim: transaction data on 313,972 Kalshi contracts show retail losing about 20 percent, not the stated fee, so v1's largest contra argument was wrong and is withdrawn; advertising added as a separate stream.
September 6, 2026AI reviewClaude Opus 5First evaluation
Created for the English side: the channel-shift cost from an exchange fee to a sportsbook hold is what keeps the balance close.

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