Prediction Market Responsible Gambling

Prediction market responsible gambling is a bit misleading. Prediction markets offer contracts on future events, which are federally regulated and not officially classified as “gambling.” As such, the major prediction market operators like Kalshi and Polymarket have a much more limited selection of responsible trading resources than sportsbooks. This page will cover how prediction market operators help their customers trade responsibly and within their means, similar to the responsible gambling resources offered by traditional sportsbooks. Let’s get started.

What is responsible gambling in prediction markets?

Prediction markets offer several tools to help users manage their risk responsibly. Kalshi, for example, calls these tools “responsible risk management,” which is their term for responsible gambling. The name might be different, but the tools are similar to what sportsbooks offer when their users want to take a break from the action. 

Tools for responsible trading on prediction markets

Prediction market operators don’t have the same commitment to responsible use of their products as their sportsbook counterparts, but several tools are available to help users trade responsibly. 

User limits – Prediction market customers can set deposit and time limits if they want to control how much they use the service. Kalshi offers a “personalized funding cap” that sets a maximum amount users can deposit to their accounts each month. Fanatics Markets, which has partnered with Crypto.com for prediction market operations, allows users to set daily, weekly, or monthly deposit limits and also offers a session time limit to ensure a cooling-off period each day. 

Time out/trading break – Users can temporarily restrict their access to prediction market platforms by signing up for a timeout or trading break that can last from a few days to several months. This is a quick and easy way to take a few days off from trading if you need a break. 

Voluntary self-exclusion – Prediction markets are not required to offer self-exclusion programs the same way sportsbooks are in many states, but a few offer the service anyway as part of their commitment to responsible trading. The opt-out option is unique to each operator and does not carry over to affiliated companies, so it is not comprehensive, but it’s a good way to restrict access to limit further losses.

Prediction market vs. sportsbook responsible gambling resources

Here is a comparison between sportsbook responsible management resources and prediction market responsible trading resources.

Sportsbook responsible gambling resources

Many states require sportsbooks to offer responsible gambling resources and disclose their availability on the app or home page. Regulators want it to be easy for users to get the help they need and they put the onus on the sportsbooks to make it simple for people to set limits on their gaming activity. 

States also administer their own responsible gambling efforts or partner with nonprofit organizations, including Gamblers Anonymous and the National Council on Problem Gaming, to help people deal with problem gambling. These efforts have helped thousands control their chronic gambling over the years. 

Here is an example of the disclosure requirements BetMGM requires affiliate partners to include when advertising a promotion on their website. 

These disclosures make it easy for users to find information about responsible gambling, similar to a drug company describing side effects in an ad for their product. State sports betting regulators have decided that it is important for people to have access this information, and the sportsbooks dutifully follow the rules laid out in the states in which they are licensed to operate. 

Prediction market responsible trading resources

In comparison, there are no disclosure requirements whatsoever for prediction market operators. There are no toll-free numbers for customers to call if they think they might have a problem with excessive trading. There are no websites that offer information on problem trading and how to get help. So far the CFTC, which regulates prediction markets, is treating sports-related event contracts the same way they treat futures contracts, which do not have any trading limits or disclosure requirements. 

The prediction market platforms that offer any responsible trading resources do so out of their own commitment to responsible trading. Polymarket doesn’t have any responsible trading resources at all, while Kalshi has the three options listed in the section above. 

The lack of responsible trading tools offered by some prediction market operators has concerned responsible gambling experts and many industry observers, who contend that the sportsbook industry’s embrace of responsible gambling initiatives helps people learn to gamble within their means. 

For now, we don’t expect anything to change. At prediction markets, it is up to the individual user to trade responsibly while proactively utilizing the limited responsible trading resources if they decide to take a break from their activity.

More on prediction market responsible gambling

InGame is your source for everything related to the prediction market industry. Check out some of our recent coverage related to responsible gambling.

Conclusion

As more sportsbooks open up their own prediction market platforms, providing ways for traders to transact within their means will become more important than ever. It is encouraging to see Fanatics Markets offer responsible trading resources similar to the responsible gambling tools on their sportsbook app, and we are hopeful others will follow suit. Kalshi also has several tools for its traders to use if they need a break from trading, but there is no industry-wide focus on responsible trading like there is in the sportsbook industry. 

Ultimately, trading responsibly is up to the individual users. Federal regulators are not going to add responsible trading disclosure requirements anytime soon. While we are pleased that some platforms offer ways for traders to take a break, enforcement will be minimal because the regulatory structure is not set up to ensure traders are adequately protected. As more operators enter the market, we will update this page with any additional information related to prediction market responsible trading efforts as they are rolled out.