New Report Examines Prediction Markets’ Impact on Gaming

Next.io published a report on the state of prediction markets. The report focused on prediction markets’ impact on the gambling industry, though it included lengthy sections of history and overviews of different parts of the prediction market industry.

It included critics of prediction markets, but the report also quoted Robin Hanson and several prediction market entrepreneurs. The report focused on sports and left other categories like politics or culture as future areas of expansion rather than centers of activity in their own right.

However, the Next.io report included a prescient warning for prediction market platforms. The report noted that in 2011, the United States shut down major online poker sites on a day dubbed “Black Tuesday.” It was a warning against any “too-big-to-fail” argument that might be deployed on behalf of prediction markets.

States within the Sixth Circuit’s jurisdiction are already split on whether state law can limit sports contracts on prediction market exchanges. The industry could be within a year or two of being heard at the Supreme Court.

We have our first intra-circuit split:

TN rules for Kalshi.

OH rules against Kalshi.

Sixth Circuit appeal incoming. https://t.co/rt0DVXv3kl

— Daniel Wallach (@WALLACHLEGAL) March 9, 2026

Regulatory risk has not slowed the prediction market industry’s growth. Rather, the industry has continued experimenting with new types of markets.

Moving beyond yes and no markets

CBOE Global Markets announced prediction markets that included “payout zones.” Traders could buy yes and no contracts as they normally would. They also have the option to buy contracts in a payout zone that partially pays out based on a contract’s performance.

Payout zones would give traders the ability to gain partial credit if they are “directionally” right. It could also improve event contracts’ hedging utility instead of a binary outcome barring interest payments on high balances.

CBOE’s announcement comes about a month after Kalshi’s filing to offer trading on margin to select traders. If approved, Kalshi would be able to offer institutional traders the option to post a small position up front, then pay more of the full position if the contract moved against the investor.

The prediction market industry has been even more experimental in free-to-play portions of the industry.

Conditional market templates

In 2023, Metaculus announced that it would support conditional markets on its prediction polling site. Conditionals give the probability of events happening if another event also happens. One of these questions is “If a global catastrophe occurs, will it be due to an artificial intelligence failure-mode?”

Should no global catastrophes occur by the year 2100, then the market will be annulled. Metaculus uses probability guesses on a sliding scale and user performance to arrive at its forecasts.

Still, the platform offers a model that real-money platforms could consider should they look for ways to offer conditionals. New types of markets are an expansion option beyond trying to create markets on increasingly controversial subjects.