Prediction markets like Kalshi and Polymarket are growing fast with almost no federal oversight, and that is bad news for ordinary users, who mostly lose money.

• Because these apps are treated as financial exchanges rather than gambling, they operate in all 50 states while sports betting apps are limited state by state.
• Most accounts lose money, and a tiny sliver of traders takes home the bulk of the profits — users have lost roughly half a billion dollars on Kalshi alone.
• Sports bets make up most of the trading, so in practice these apps work like sportsbooks with looser rules and an 18-and-up age limit instead of 21.
• Insider trading is a real problem: a Columbia law professor puts it in the hundreds of millions on Polymarket, and George Santos profited betting on his own attendance at a Trump speech.
• Trump's administration shows no interest in regulating, and Don Jr. sits on boards tied to the two biggest platforms.

Outlook: States like Ohio, Tennessee, and Minnesota are pushing back in court after a federal appeals court said they can enforce their gambling laws, setting up a fight likely headed to the Supreme Court.