The Role of Regulation in Prediction Markets

Democracy Dies in Darkness
Regulation would help curb some significant issues.

July 24, 2026, at 6:59 a.m. EDT

By Jonathan D. Cohen and Isaac Rose-Berman, City Journal
Photo by Dado Ruvic/Reuters

Published by the Manhattan Institute, City Journal focuses on urban policy.

Americans are investing billions in prediction markets. These platforms allow individuals to speculate on outcomes like elections, album sales, and football games. However, from a legal standpoint, these activities aren’t considered gambling. Instead, prediction markets are considered investment platforms both by the markets themselves and by federal regulators. The contracts offered are classified as a type of financial derivative.