At the SBC Summit Americas in Ft. Lauderdale, prediction markets took center stage. Conference attendees gathered for the panel titled “Trading on the Future: Prediction Markets Are Here to Stay,” where a powerhouse quartet featuring two legal experts and two gambling industry insiders debated the future of event contracts and their potentially disruptive force on the sports betting industry.
Moderated by PredictionNews’ own senior political reporter Christopher Gerlacher, the discussion ranged from CFTC regulation to industry turf wars.
Whether you missed it or want to revisit the highlights, here are the moments that turned heads in the standing-room-only crowd.
Existential threat for existing gaming entities?
“Today, it’s predictions. Yesterday was sweeps. They’re still processing sweepstakes, now they have to deal with this. The reaction has been different for different tribes, for different clients, depending on how knowledgeable they are. Most are not knowledgeable. They don’t know this headwind that is about to be taken away from them. But the problem is, the ones that do know can’t do anything about it.”
Early in the panel, iGaming CEO Melissa Blau noted that her clients, sportsbooks and tribal gaming entities, view sports event contracts and prediction markets as a threat.
In states like Florida, Kalshi has become a competitor to Hard Rock Bet, which previously was the only sportsbook in the states. Then there’s other states like California that have not legalized sports betting yet its citizens have access to prediction markets like Kalshi and Crypto.com.
Sports prediction markets vs. sportsbooks: A nuanced topic
“The only thing they have in common is the risk of money and that they involve sports. But there is no other thing the same or exactly the same.”
Alex Kane called the debate around sports event contracts a “very nuanced topic,” pointing out that the exchange model is an entirely different product than what users get from sportsbooks. His company Sporttrade — which launched in New Jersey in 2022 and now holds licenses in four additional states — recently filed a no-action letter with the CFTC seeking approval to offer its contracts nationwide as a federally regulated derivatives exchange.
“Sporttrade looks much more like futures trading than online casino regulation,” Kane has said.
It’s the parlays, stupid
One issue debated was whether prediction markets will be able to sufficiently offer a parlay product.
“They are going to do parlays,” Blau said.
In fact, Kalshi already has done parlays and marketed them as such. They launched their first parlay product ahead of the Oscars but it showed little promise on the exchange.
Kane noted that sportsbooks get “85-90% of the their cash flow” from parlays and same-game parlays.
As Kane pointed out, any product resembling a parlay on the exchanges is going to look very different from what the sportsbooks currently offer. If prediction markets can’t figure out parlays, can they truly disrupt the space?
Legality of sports event contracts in question
“There is no congressional authorization for sports-related event contracts — at least not from my lens."
Daniel Wallach and fellow attorney David Aron debated whether sports contracts run afoul of federal laws like the Dodd-Frank Act, Wire Act, and Commodity Exchange Act (CEA).
Wallach, in particular, was adamant that the existence of sports event contracts nationwide was in violation of the law, citing Kalshi’s own legal arguments used to advance their election markets last fall.
“Now, less than nine months later, they’ve shifted 180 degrees, calling event contracts financial instruments,” he said. “At best, Kalshi is gaslighting everyone. At worst, they’re changing their story. They can’t have it both ways.”
Regulatory capture in the current administration?
“Does it even matter?” Blau asked, noting Kalshi’s political connections. She pointed to Donald Trump Jr., who is an advisor for the company, and Brian Quintenz, a former Kalshi board member now tapped by President Trump to lead the CFTC.
“The train has left the station.”
Wallach went further, calling the situation a textbook example of regulatory capture and sounding the alarm on what he sees as a dangerous precedent.
“This is a captured situation. And shouldn’t it bother everybody that this is how our government is doling out entitlements?” Wallach asked. “I know Alex [Kane] very badly wants to be on a CFTC-regulated exchange and have a level playing field. I know everybody in this room wants in on this new vertical. But doesn’t it bother us at a basic level that this is how it’s happening? Because the son of a president is a strategic advisor to a gaming company?”
Wallach, a supporter of event contracts in principle, said the method of approval — not the markets themselves — is what really raises red flags.
“I want event contracts. I really want them to happen,” he said. “But not this way. Not without guardrails. Not without regulation. Not without congressional authorization. And not favoring one company.”
He warned that Kalshi, for now, is effectively operating in a monopolistic vacuum, thanks to favorable judicial rulings and a regulatory gray zone that’s unlikely to be resolved anytime soon.
“Until the formal rulemaking process is completed — which could be a year or more away, if it happens at all — they’ve got clear sailing,” Wallach said. “Who benefits? The stockholders. Who are the stockholders? Just do the math. This is the absolute worst way to make policy — based on who’s in office.”
Still, Wallach believes the courts will eventually step in.
“We may be a monarchy,” he said wryly, “but the judiciary hasn’t been captured.”
Public interest debate
In arguably the most entertaining portion of the panel, Kane challenged Wallach, arguing that it’s a two-part test under the CEA that determines whether an event contract is permissible.
“He's got all these papers here, and he seems to have no wrong answers. But even Dan Wallach has failed to read the order from the commissioner," Kane said. “It's a two-part test as to whether a contract is permissible. A two-part test, because if it was simply a one-part test there would be no long dissertation by then Chairman Berkovitz...Does it involve gaming, and is it in the public interest?”
Kane questioned whether monopolistic setups like Florida’s — where Hard Rock Bet holds exclusive control — truly serve the public.
“Those million people are subjected to have one option. They can't choose their price. If they're good at betting, they're limited. The company that is operating here that has the monopoly doesn't share tax revenue, does not pay tax revenue, right? Those million people that are subjected to worse odds, a worse experience, no competition...Are they part of the public? Is it in their public interest that they have one option?”
