An Ohio federal court ruled Monday that a “prediction market” online betting platform is required to abide by the same state gambling laws that regulate casinos. The ruling highlights the enormous spread of the prediction market gambling industry, which allows users to gamble on almost any “event contract,” including sporting events, election races, or even when the return of Christ will occur. Experts say that prediction market gambling presents a host of dangers to society, including high rates of addiction, the corruption of athletes and others with insider knowledge surrounding bets, and even threats to national security.

In Monday’s court ruling in Ohio, the New York-based predictive market gambling platform Kalshi argued that it should not be regulated as a bookmaking entity but should be handled as federally regulated swaps. But U.S. District Judge Sarah Morrison disagreed, ruling that since Kalshi offers gambling on sporting and other events and not transactions “involving financial instruments and measures that traditionally and directly affect commodity prices,” it must be treated as a gambling platform.

Ohio Attorney General Dave Yost (R) lauded the decision, pointing out that Kalshi was trying to evade state laws that regulate sports betting. “You’ve got two industries that are essentially doing the same thing, competing for the same base of customers,” he noted during “Washington Watch” Wednesday. “One’s got heavy regulation, one does not. That’s not really a free market — that’s a fettered market.”

The Ohio ruling marked a small step towards regulating prediction market gambling, but the industry still remains largely unregulated. A lengthy report published by The Wall Street Journal last week exposed how Kalshi and its primary competitor Polymarket are luring college students into the web of online gambling by offering on-campus fraternities and student influencers large sums of money to recruit users in exchange for tens of thousands of dollars to spend on “‘epic parties’ — one frat raised $30,510 over a two-week period.”

WSJ reported that the situation is turning out “about as well as you might expect: Students are losing hundreds of dollars on false rumors. The National Collegiate Athletic Association is raising alarms about betting on college games, and a student athletic department employee was fired for betting on Kalshi. Meanwhile, student groups are hosting parties with Polymarket-branded beer pong sets.”

The lack of regulations on prediction market platforms has “sparked waves of concern over allegations of insider trading — and how speculators have hit it big on macabre wagers over war, death and crime.”

Experts like John Kindt, a professor emeritus of Business and Legal Policy at the University of Illinois at Urbana-Champaign, say that the dangers of prediction platforms extend even into the realm of national security. “You just can’t have anybody anywhere betting on anything they want to into the millions of dollars,” he told The Washington Stand last June. “This … will destabilize the financial and economic systems of America, and therefore it is actually a national security issue. It’s an economic national security issue.”

Kindt went on to observe that the current unregulated environment surrounding prediction market gambling mirrors the conditions that were present with credit default swaps and subprime mortgages in 2008, which resulted in the Great Recession. “This is ‘open borders’ in the financial systems, and it impacts everybody. The non-gambling people say, ‘Well, I don’t gamble.’ This is going to nail everybody just like the Great Recession did. You don’t have to gamble.”

Kindt also pointed to how prediction market platforms will only deepen the existing issue of young people increasingly becoming addicted to gambling. “Electronic gambling on cell phones in particular is the ‘hidden fentanyl’ of gambling addiction, and kids are already showing over a 10% gambling addiction,” he pointed out. “It’s an involuntary tithe of our children to the idols of gambling.”

A further wrinkle in the outlook for prediction market gambling is that the industry appears to have an ally in the White House. In February 2025, President Trump nominated Kalshi Board Member Brian Quintenz for the role of commissioner on the Commodity Futures Trading Commission (CFTC) (but later withdrew the nomination). In addition, Donald Trump Jr. serves as an adviser to Kalshi and is also an investor in Polymarket.

Meanwhile, a representative for Kalshi stated that the betting platform will seek an appeal on Monday’s Ohio federal court ruling, citing a recent split decision in Tennessee that blocked the city of Nashville from being able to force Kalshi to abide by state regulations. “Because these cases are starting to pop up around the country, I think this is probably eventually headed for the Supreme Court,” Yost observed.