Rival prediction markets Kalshi and Polymarket will reportedly be excluded from the Federal Trade Commission’s (FTC) probe into deceptive practices in the $167 million online sports gambling industry.
The two crypto-linked firms aren’t a focus of the FTC probe, which will instead set its sights on sportsbooks like DraftKings and FanDuel.
It will likely look into misleading advertisements, as well as the rate of suicides, hospitalizations, and bankruptcies caused by the industry.
Sources familiar with the matter told The Washington Sun that the industry evaluation “is in its early stages,” and that it’s conducted by political and career staffers.
New York alleges prediction markets cause problem gambling
Polymarket, which utilises blockchain technology, and Kalshi, which offers crypto perpetuals, are already under the scope of an insider trading probe overseen by Republican House Oversight Committee member James Comer.
The state of New York has also sued Kalshi and Polymarket this year, accusing them both of running an illegal gambling operation that’s encouraging problem gambling among people under the age of 21.
Last month’s Polymarket suit highlighted a study from the National Institutes of Health and American Psychological Association that linked pathological gambling to mental health disorders, suicidal behaviors and substance abuse.
Prediction markets say they aren’t offering gambling
Neither Kalshi nor Polymarket want to be considered gambling, and hope to be regulated federally under the Commodity Futures Trading Commission instead of individual states.
Kalshi CEO Tarek Mansour recently argued that prediction markets aren’t gambling because it is an open financial market that matches buyers and sellers.
— Americans For Fair Markets (@FairMarkets_US) October 12, 2026
WATCH: Kalshi CEO @mansourtarek_ DISMANTLES the claim that prediction markets are gambling.
Casinos profit when customers lose. Prediction markets match buyers and sellers, regardless of who wins.
“Kalshi doesn't make more or less money from winners or losers.” pic.twitter.com/6KXyP1pyuD
Read more: American Indian tribes want Kalshi and Polymarket off their land
Last year, Polymarket CEO Shayne Coplan called DraftKings and FanDuel a sportsbooks “duopoly” that acts against winning bettors.
He said that Polymarket offers derivatives and shouldn’t be regulated like sportsbooks that offer gambling.
President Donald Trump’s son Donald Trump Jr. holds advisory roles in both firms. He holds $300,000 worth of Kalshi shares, and his investment firm 1789 Capital has invested $500 million in Polymarket.
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