Consumer Protections for Prediction Market Event Contracts

NCPG remains neutral on the legalization of prediction markets and event contracts, consistent with its founding principle of neutrality on gambling legalization. This neutrality allows NCPG to convene diverse stakeholders — regulators, platforms, researchers, and public health leaders — and advance balanced, collaborative solutions. NCPG does not to advocate for or against the legalization of these markets, but to ensure that responsible participation practices and consumer protections evolve alongside them.

NCPG emphasizes that trading event contracts on prediction markets is functionally gambling, regardless of how it is legally defined. As such, these activities carry real risk of gambling-related harm and must include strong, consistent consumer protections. The concern is significant enough that NCPG has identified a gap in national infrastructure dedicated to education and responsible trading practices specific to financial markets, and is actively working to address it.

NCPG believes that responsible participation standards, risk awareness education, and access to help-seeking resources should apply to prediction market platforms, similar to protections that exist in traditional gambling environments. Specifically, NCPG advocates for: dedicated responsible trading tools and guidance for platforms; a prohibition of credit-based participation, age restrictions limiting access to 21+, accessible pathways to support services, including the National Problem Gambling Helpline™ (1-800-MY-RESET); early intervention and risk-mitigation resources tailored to trading behaviors; and industry training and accreditation standards to ensure platforms are equipped to identify and respond to behavioral risk.

NCPG recognizes that the regulatory landscape for prediction markets is complex and still evolving, with overlapping federal and state considerations. While we remain neutral on which framework should prevail, our position is clear: the need for consumer protections, education, and access to support resources exists immediately.

NCPG recognizes that the regulatory landscape for prediction markets is complex and still evolving, with overlapping federal and state considerations. While we remain neutral on which framework should prevail, our position is clear: the need for consumer protections, education, and access to support resources exists immediately.

NCPG emphasizes that trading event contracts on prediction markets is functionally gambling, regardless of how it is legally defined. As such, these products carry behavioral risks that closely mirror those seen in traditional gambling environments. Whether or not a product is legally classified as gambling, the behavioral and public health implications warrant the same degree of attention, education, and consumer protection infrastructure.

The evidence base is still emerging. Prediction markets are a relatively new and rapidly expanding product category, which means the field has not yet accumulated the longitudinal data that exists for more established forms of gambling. NCPG is actively working to build the research and data infrastructure needed to track these trends — including assessing helpline utilization, conducting national needs assessments, and identifying gaps in education and support. What we can say is that the growth of these platforms means the potential scale of harm is increasing, and we must get ahead of it now rather than wait for a crisis.

This is one of NCPG’s core concerns. When platforms use financial and investment language—“trading,” “markets,” “positions”—rather than gambling terminology, it can fundamentally change how users perceive the activity and their level of risk. People who would never self-identify as gamblers may engage more heavily and may not recognize warning signs of problematic behavior because the framing doesn’t match their expectations of what gambling looks like.

Regardless of how these products are described, participation should be understood as a form of risk-based activity—functionally similar to gambling—and should be approached as entertainment, not as a way to make money. This is why NCPG is working to develop more inclusive, non-traditional messaging that helps individuals better recognize risk and access support when needed.

There are meaningful parallels and meaningful differences. Like sports betting, prediction markets offer frequent opportunities to place money on uncertain outcomes, can be accessed easily via mobile platforms, and carry the behavioral risk patterns associated with problem gambling — including chasing losses, escalating engagement, and emotional decision-making. However, prediction markets are framed in financial and civic language, attracting a different and often broader demographic than traditional sports bettors. They are also federally regulated as financial instruments, rather than under state-level gambling frameworks, which means the existing problem gambling infrastructure — built largely around the sports betting and casino context — does not neatly apply. Additionally, this landscape is changing with the advent of prediction markets launched under sports betting platforms and thus are considered legal in states where otherwise sports betting is illegal.

NCPG is actively working to build that data and research capacity. This includes plans for national needs assessments across trading platforms and fintech providers, tracking helpline utilization related to trading behaviors, and expanding thought leadership and research in this space. Currently, the data infrastructure specific to prediction markets is limited — which is itself a problem NCPG is working to solve. Developing the evidence base to understand the scope and nature of trading-related harm is a central component of NCPG’s work in this area.