Key Highlights
Contents
- Jonathan Cohen, AIBM’s policy expert, highlights insufficient safeguards in prediction markets and sports gambling platforms, particularly affecting young male demographics
- Approximately 40% of US citizens suspect sports competitions are manipulated, indicating widespread distrust in institutions
- Cohen emphasizes how prediction markets confuse the distinction between gambling activities and financial investments, particularly on trading platforms
- Recent Polymarket insider trading incident involving the Maduro situation has intensified legislative attention on prediction market platforms
- AIBM advocates for age verification measures, automatic spending caps for users under 25, and evidence-based protective measures for gambling services
The American Institute for Boys and Men is advocating for enhanced regulatory oversight of prediction market platforms and sports gambling operations across the United States. In a recent conversation with Gambling Insider, Jonathan Cohen, who leads the organization’s sports gambling policy initiatives, presented his comprehensive analysis.
Since joining AIBM this past January, Cohen brings both scholarly expertise and advocacy experience to his role. He has authored two comprehensive books examining US gambling regulations and has contributed his insights on PBS as well as during a Brookings Institution discussion focused on prediction market platforms.
His core thesis is straightforward: existing protective measures for sports gambling remain inadequate, while prediction markets operate with virtually no meaningful oversight.
Recent studies conducted by AIBM reveal that substantial portions of the American population anticipate fraudulent practices within gambling-related sectors. According to a Deseret News survey, approximately 40% of Americans harbor suspicions that sporting events are manipulated.
Cohen characterizes this sentiment as symptomatic of declining confidence in American institutional structures broadly, extending beyond gambling industry concerns specifically. However, he noted that industry communications emphasizing competitive integrity are “failing to connect” with everyday Americans.
Emerging Dangers in Prediction Market Platforms
Among Cohen’s most pointed critiques are those directed at prediction market services such as Polymarket and Kalshi. According to him, these platforms obscure the boundary separating gambling from legitimate investment activities, especially when integrated into brokerage applications.
“Users may engage with prediction market platforms genuinely believing they’re participating in investment activities, without recognizing the gambling characteristics inherent to these services,” Cohen explained.
He referenced the recent criminal charges against a military service member for insider trading on Polymarket connected to the apprehension of Venezuelan leader Nicholas Maduro. This incident, Cohen argues, has ended the “grace period” prediction markets enjoyed in public perception.
Cohen additionally expressed alarm regarding market manipulation possibilities. He mentioned Polymarket’s derivatives offerings, including a speculative contract questioning whether trading volume for the second coming of Jesus Christ would surpass 5%. He characterized such offerings as apparently engineered for manipulation purposes, drawing parallels to fraudulent cryptocurrency schemes.
The prediction market sector has pursued credibility through media collaborations and positioning itself as “News 2.0.” Cohen acknowledged limited value in utilizing markets as immediate public opinion gauges, particularly during electoral cycles. Nevertheless, he suggested the underlying objective of these partnerships is product normalization.
He also challenged the “wisdom of the crowd” rationale. The prediction market user demographic remains limited and disproportionately comprises younger males. This hardly constitutes a representative population sample, he argued.
Recommended Regulatory Framework
AIBM is formulating a comprehensive policy platform. Proposals include establishing 21 as the minimum age requirement for accessing prediction markets and sports gambling services. The organization additionally endorses automatic spending limitations for users below age 25, mirroring Flutter’s implementation across the UK and Ireland.
Cohen supports restrictions on loss-recovery behaviors and dramatic increases in wager amounts. He noted that platforms already possess the analytical capabilities to detect these behavioral patterns but face no obligation to intervene.
He stressed that any forthcoming regulations must be grounded in genuine consumer behavior data. Presently, he explained, the prediction market industry operates as a “black box.” Minimal public information exists regarding user demographics, expenditure levels, or market maker participation.
Cohen dismissed the current array of voluntary responsible gambling features on sportsbook platforms as ineffective. “The solution isn’t improved marketing campaigns,” he stated. “We must fundamentally reconsider allowing unrestricted user behavior immediately upon application download.”
Regarding political developments, Cohen suggested Congressional action will most likely address insider trading regulations concerning national security-related prediction markets. A forthcoming Supreme Court decision could also significantly alter the legal framework governing prediction markets.
Cohen interpreted the establishment of a sports betting super PAC as evidence that the industry perceives regulatory threats. He characterized it as “equally an acknowledgment of vulnerability as a demonstration of power.”
Multiple states, including Colorado, Maryland, and Ohio, currently have pending legislation targeting stricter sports gambling regulations.
