WORLD CUP 2026
wagering operators this summer, there are a few potential disrupters to the regulated sports wagering industry. While it is uncertain how much the World Cup will drive increased handle, and how sustainable those betting habits will be, who those wagers are made with matters. Experience from other markets suggests that entrenched habits can be hard to change even in a fully legalized market. Future legalization is no guarantee that a regulated market will attract consumers, and bettors who are denied access to a legal sports betting market have several options available to them. Prediction Markets Prediction markets – such as those run by Kalshi or Polymarket – have proven to be a viable option for bettors. Regulated by the Commodity Futures Trading Commission (CFTC) as financial instruments, individuals trade against others who select the opposite side of the contract rather than betting against the house. The peer-to-peer model is not without critics, though. Kalshi has faced legal challenges in several jurisdictions and has even been forced to shut down sports-related contract offerings in states such as Massachusetts. 31 Additionally, the crypto-based prediction market, Polymarket, is facing a class action lawsuit in the Southern District of New York, where plaintiffs have alleged that the prediction model is nothing more than sports wagering in disguise. Even with intense regulatory scrutiny and mounting litigation, users are flocking to prediction market platforms, with the Kalshi app being downloaded more than three million times in the United States this past January. 32 States and regulated sports betting operators that were hoping that the CFTC would issue guidance or ban sports-related contract offerings
ahead of the World Cup, are out of luck. The CFTC recently announced that it was withdrawing a proposed ban on sports- related event contracts. 33 This leaves the Kalshi’s of the world free to operate in any state where they haven’t been ordered to cease operations, including major host states without traditional, regulated sports wagering – California, Texas, and Georgia. They will be joined by DraftKings, Fanatics, and FanDuel which have all launched their own prediction market apps across the US offering sports-related event contracts in a limited number of states, including California, Texas, Georgia, and Florida. Much has been made by state regulators and rival licensed operators of the lack of protections for consumers using prediction markets, but, in the context of the World Cup, integrity may be as serious an issue. There have been several high-profile cases of insider dealing on prediction markets including on sports events. As financial instruments, trading on prediction markets with insider information can be prosecuted as commodities fraud. Wire fraud statutes can also be used by the DOJ to prosecute athletes or staff using Material Non-Public Information (MNPI) to defraud platforms. Although Kalshi CEO has argued that trading using MNPI is not technically insider trading, 34 the majority of sport’s governing bodies, including FIFA, have moved quickly to tighten up their rules. These rules now have clauses to the effect that any transaction whose outcome is dependent on the result of a sports event is off limits to competitors, coaching and other staff. The major sports leagues have also signed partnerships with prediction markets operators which have also been brought under the banner of the Sportradar Universal Fraud Detection System. With the involvement of three countries in a region which has seen a huge expansion of prediction markets
31 https://www.mass.gov/news/ag-campbell-secures-court-order-that-will-block-kalshi-from-offering-unlawful-sports-wagers-in-massachusetts 32 https://www.pymnts.com/consumer-insights/2026/kalshi-overtakes-draftkings-and-fanduel-in-download-race/#:~:text=By%20PYMNTS%20 February%205%2C%202026,DraftKings%20Sportsbook%20or%20FanDuel%20Sportsbook. 33 https://www.corporatecomplianceinsights.com/cftc-withdraws-proposed-rule-prediction-markets/ 34 https://www.linkedin.com/posts/mansourtarek_insider-trading-is-banned-on-kalshi-and-activity-7414691318947532800-ZPk9/
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IMGL MAGAZINE | MARCH 2026
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