Sports Prediction Markets Become the Next Legal Battleground

A year after political prediction markets captivated investors by allowing them to trade on presidential and congressional race outcomes, a new frontier is emerging — sports prediction markets. These platforms let participants buy and sell contracts tied to the results of sporting events, marking the latest evolution in the growing market for real-world event trading.

At the center of this development is the Commodity Futures Trading Commission (CFTC), the federal agency that regulates event contracts. These instruments are typically defined as derivative contracts whose payoff depends on the outcome of a specific event — such as an economic indicator, weather pattern, or even sports result.

The most common event contract structure is binary, where traders speculate on a “yes” or “no” outcome. Once the event concludes, the party that predicted correctly receives the payout. As with traditional futures markets, prices fluctuate based on market demand until the event is settled.

From Elections to End Zones: How Event Contracts Are Expanding into Sports

This model naturally extends to sports, where buyers and sellers can trade contracts based on outcomes like game winners, total points, or player performance. For instance, a trader might purchase a contract predicting that a specific team will win the Super Bowl — if the prediction is correct, they receive a payout; if not, the counterparty benefits.

Over the past year, several companies have entered the sports event contract space. Kalshi, a CFTC-designated contract market, began offering futures tied to championship odds and outright winners in early 2025. More recently, it has expanded to include contracts on in-game variables such as touchdown counts, point spreads, and total scores.

A recent CFTC filing suggests Kalshi may soon allow contracts that cover multiple outcomes, provided there’s enough liquidity in the underlying markets. Meanwhile, Robinhood has announced a partnership with Kalshi to enable users to trade on professional and college football outcomes directly through its platform — a move that could significantly broaden access to these emerging financial instruments.

The Regulatory Debate Ahead

As prediction markets increasingly overlap with sports betting and financial trading, the line between speculation and gambling continues to blur. The CFTC’s oversight of these contracts positions sports prediction markets as a potential new legal battleground, raising key questions about consumer protection, market integrity, and the future of event-based derivatives in the United States.