FTC sports gambling probe to exclude Kalshi and Polymarket, report says

Kalshi and Polymarket are expected to remain outside the FTC's inquiry into misleading practices within the $167 million online sports betting sector, according to reports.

The investigation will target sportsbooks such as DraftKings and FanDuel, leaving the two crypto-based platforms out of its scope.

The probe is expected to examine deceptive advertising and the incidence of suicides, hospitalizations and bankruptcies linked to the industry.

People with knowledge of the situation informed The Washington Sun that the assessment is still early and is being carried out by both political appointees and career officials.

New York alleges prediction markets cause problem gambling

Polymarket, a blockchain-based platform, and Kalshi, which provides crypto perpetuals, are already being examined in an insider trading investigation led by Representative James Comer, a Republican on the House Oversight Committee.

New York has separately filed lawsuits against Kalshi and Polymarket this year, alleging that they are operating illegal gambling services that promote addictive behavior in individuals under 21.

The Polymarket lawsuit from last month cited a study by the National Institutes of Health and the American Psychological Association that connected pathological gambling with mental health issues, suicidal tendencies and substance abuse.

Prediction markets say they aren't offering gambling

Both Kalshi and Polymarket reject the label of gambling and seek federal regulation under the Commodity Futures Trading Commission rather than oversight from individual states.

Kalshi CEO Tarek Mansour has argued that prediction markets are not gambling, describing them as an open financial marketplace that pairs buyers with sellers.

Casinos profit when customers lose. Prediction markets match buyers and sellers, regardless of who wins. “Kalshi doesn't make more or less money from winners or losers.”

In 2025, Polymarket CEO Shayne Coplan referred to DraftKings and FanDuel as a sportsbooks “duopoly” that acts against winning bettors.

Coplan stated that Polymarket provides derivatives and should not be regulated in the same manner as sportsbooks that offer gambling.

Donald Trump Jr., son of President Donald Trump, serves in advisory capacities at both companies. He owns $300,000 in Kalshi shares, and his investment firm 1789 Capital has put $500 million into Polymarket.