How Prediction Markets have Bucked the Market!

For Americans who love to gamble (and we have to assume that is you), finding a place to do so legally can be quite a challenge. Not only do states have different rules and regulations about what isThere are occasions when we here at ReadyBetGo want to bring you interesting facts about the gambling industry  When something catches our eye, we will publish it for your enjoyment. 
Image courtesy of Casino.org  and is not possible, but things also seem to be in constant flux. Right now, online casino gambling is only legal in seven states. There is a strong chance that New York could come online this year, but it is nowhere near a done deal. Sometimes it feels as though you have to play the system just to get a chance to play at all.

However, recently, there have been some welcome changes, and the rise of prediction market platforms is now offering many more Americans the chance to legally lay some money on the outcome of a future event. If you are wondering what prediction market platforms are all about and how they work, you are not alone. This 'new kid on the block' has been making a good deal of noise and drawing attention to itself. They are going mainstream, and we wanted to find out more.

We thought we would 'ask an expert', so we sat down with Ian Zerefa from Casino.org to get answers to our questions. 

Ready Bet Go

Hi Ian, welcome to Ready Bet Go. Before we dive into the specifics of prediction market platforms, can you let our readers know a bit more about Casino.org and your role at the company, please?

Ian Zerefa

Thank you for inviting me in. Casino.org is an independent casino and gambling review site. Since our inception in 1995, we have helped millions improve their chances in online gambling by offering up-to-date, trusted, and unbiased information. While online gambling might only have come out of the shadows relatively recently in the US, we have been working in legal, regulated markets around the world for over thirty years. I specialise in reviewing gambling sites in English-language markets and have been watching the rise of prediction market platforms with great interest.

Ready Bet Go

So are prediction markets gambling or financial derivatives, and why does it matter what they are?

Ian Zerefa

Well, technically and legally, they are a financial product and are regulated federally by the Commodity Futures Trading Commission (CFTC), which oversees derivatives markets in the US. They focus on market integrity, fraud prevention, and what contracts are permissible under the Commodity Exchange Act.

However, for all intents and purposes, for the many people who enjoy taking a position on a future event, they behave like a gambling product.  However, rather than 'betting against the house', users trade outcomes (as you would with stocks). The odds are not determined by a bookie; the platforms facilitate trades between users.

While they are regulated at the federal level, platform availability and what is offered can vary from state to state, as state regulators also have oversight. The authorities overlap and are not identical. This means that availability can vary significantly depending on location.

Ready Bet Go

How do users know which platforms to choose?

Ian Zerefa

Good question. It is the very reason we exist, to help people find the best sites that suit their needs. Knowing which categories a platform offers is essential – there is a wide range of topics to take a position on, from culture and politics to the weather, interest rate decisions, and the outcome of a sports event. Not all sites offer the same options. Some apps are sports-first, but others have a much wider choice.

We think that welcome offers can be a useful tiebreaker when deciding which one to choose. However, users should ensure the code is applicable in their state. As geographical restrictions apply, this is a determining factor too. Fortunately, we aim to make things easier for users. Casino.org has a list of the best prediction markets – as with all things that we work on, we do the hard work behind the scenes, taking players one step closer to the action.

Ultimately, the right and safe platform usually comes down to what you, as a player, want to trade, how easy it is to use, and whether it is available in your state. We recommend that, once those options have been determined, traders compare details such as pricing, payment methods, bonuses, and any state-specific restrictions.

Ready Bet Go

If prediction market apps are not 'the house' to bet against, how do they make money? After all, casino and sports betting sites make their money through winning more than they lose, but you say this is not the case with prediction markets.

Ian Zerefa

Yes, the financial models for these businesses work differently from traditional betting and gambling sites. The prediction market platforms and apps make money through trading fees, redemption or withdrawal charges, spreads, interest on balances, and other premium tools. The fee structures are a significant consideration and can matter more than many traders expect.

As with all things, the devil is in the details, and some platforms are easier to understand upfront than others. It is important for your readers to review the real costs associated with entering and exiting a position. They should have this information clear before they start trading – that way, they won't get any nasty surprises.

Ready Bet Go

Are prediction markets secure, or do you think they are just a flash in the pan?

Ian Zerefa

Well, without wanting to sound like the small print on an advert, investments can go up and down. Speculating is never going to guarantee returns, and if someone is going to win, then another person is going to lose. That is inevitable. However, the platforms we recommend are secure, and the concept has been around longer than people might expect.

The original model dates back to the early 2000s, when the Pentagon began setting up prediction markets that allowed users to buy and sell contracts based on Middle Eastern political outcomes. However, in 2003, government-led prediction markets were scrapped when concerns were raised about citizens betting on war!

However, the model was set, and several companies set about launching commercial versions. In 2018, Kalshi launched its prediction market, followed by Polymarket two years later. In 2024, a court ruling allowed prediction markets to operate as federally regulated event contract exchanges.

The rest, as they say, is history. Or maybe it's the future. Who knows? Perhaps you would like to trade on what will happen next!