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With online betting on the rise in the US and the rise of entertainment-focused prediction markets, is the identity of gambling evolving?
The atmosphere of gambling is changing rapidly as more innovations enter the space. Prediction markets are encroaching on the space of traditional gambling companies, with market leaders like Kalshi partnering with major brands like CNN to establish a foothold in the traditional media space.

CNN partners with Kalshi to integrate prediction markets into its global newsroom.
The first major news network to embrace Kalshi prediction markets.
A new era of media is here. pic.twitter.com/uXLlWVLjQs
— Kalshi (@Kalshi) December 3, 2025

The growing prevalence of prediction markets means that cultural or entertainment-based contracts are becoming ever more synonymous with betting. A quick glance over Kalshi’s bets, for example, shows some you’d expect from traditional sportsbooks, but also some more unusual options, such as “What will Carmelo Anthony say during The Tonight Show Starring Jimmy Fallon?”, or “‘Avatar: Fire And Ash’ Rotten Tomatoes score?”

“My clients don’t see themselves as gamblers anymore. They’re ‘engaged fans’ using apps that look like social media.” – Ava Chavez, Mission Prep Healthcare Adolescent Services Vice President

What’s more, traditional gambling brands are chasing down people’s attention spans with more and more entertainment or game-driven approaches. Microbets during live sports events and same-game parlays become quickfire, low-cost bets that are seen more as part of the fun of watching live sports than taking a risk on a bet.
“The gambling industry is reframing itself into something that doesn’t feel like gambling at all, and that’s exactly what worries me,” said Aja Chavez, Vice President of Adolescent Services at Mission Prep Healthcare, a teen residential health care center, while speaking to ReadWrite. “My clients don’t see themselves as gamblers anymore. They’re ‘engaged fans’ using apps that look like social media.
“The industry has successfully rebranded betting as entertainment, and it’s working. People spend hours on these platforms without recognizing it as gambling because it feels like just another part of watching sports. When I ask them about it, many genuinely don’t connect their daily app use with what their parents did at the bookies.”
This isn’t necessarily something wholly new, of course. Casinos, perhaps one of the most traditional forms of betting, has always leaned into the glitz and glamor of the spectacle.
What is new, however, is how prevalent this entertainment-meets-gambling atmosphere is when it can be funnelled out to everyone via gaming apps and online slots games.
Gambling is becoming increasingly woven into places typically reserved for entertainment. You can find gambling odds and prediction markets seamlessly on social media platforms like X, exposing more people to betting-style services from new demographics.
A new type of bettor
As the lines blur between entertainment and gambling, it brings new people into the world of betting. While that’s not inherently a bad thing, the lack of proper awareness about problem behavior can leave them exposed to risks they’re unused to handling.
Indeed, David Weisselberger, founding partner of Erase The Case, a law firm dedicated to assisting individuals in resolving their criminal history, has seen a rising number of first-time offenders being charged with petty theft or embezzlement. Each offense tends to be for less than $1,000 and was sparked by attempts to cover up or fund weekend ‘fun’ betting losses, often through misappropriating company funds or small-scale fraudulent acts.
“The traditional risk assessment models used by regulators do not capture this demographic of users because they do not gamble frequently enough or with the desperation of a traditional gambling addict,” Weisselberger explained to ReadWrite. “However, they continue to support their families and hold down full-time employment until they get arrested.”
Although on a small scale that tends to slip under the radar, these are more early indicators of potentially harmful behavior that could get missed.
“Prop Bets and In-Game Micro-Wagers create a mental framework that causes users to see their betting activities as a form of media consumption and not as high-stakes wagering,” added Weisselberger. “When a user places ten $50 prop bets on whether a quarterback’s passes will be completed, he/she views the activity as paying a premium for an enhanced viewing experience. It creates a lower barrier to entry for those who may never walk into a casino because they do not perceive themselves as gamblers.”
Change is required
While this is all well and good for gambling companies, it opens up new and potentially worrying questions about gambling-related harm reduction.
“In terms of how we should measure risk and harm, our traditional ways were built for a different era,” explained Chavez. “We look for things like chasing losses, lying about money, or desperate financial situations. These still matter, but they miss something crucial about modern betting.
“What I’m seeing now is a new pattern. People are losing money gradually through constant, small bets, and they’re spending enormous amounts of time on these platforms. By the time those classic warning signs appear, the psychological hooks are already deep.”
In the US, some of the signs that gambling operators need to keep an eye out for as part of social responsibility demands include escalating bet sizes, chasing losses, increased deposits, prolonged play, and signs of financial issues like borrowing money.
However, as Chavez points out, micro bets might not result in these early signs in the same way, but the same unhealthy and damaging behaviors could still be taking root, especially among vulnerable people.
“I believe we need to start looking for different red flags,” Chavez said. “We need to ask questions about how much of someone’s time and mindspace the platform consumes, whether betting has become woven into their identity as a fan, and just how normalized it’s become in their daily life. That’s where the harm starts now.”
Gambling hasn’t just changed form – it appears to have changed meaning.
Featured image: Unsplash
The post Are gambling markets becoming entertainment first, betting second? appeared first on ReadWrite.

Prediction markets are the latest in a long line of examples of how gambling innovation takes root in the gray areas.
Major prediction markets are embroiled in lawsuits across the country, with some states like Arizona banning some operators altogether. State governments argue that the services are sidestepping necessary gambling licensing laws, while prediction markets maintain they shouldn’t be subject to state-level regulation.
While there are some ways that prediction markets mimic traditional gambling, especially sportsbooks, there are also clearly ways that they are innovating. Traditional gambling operators wouldn’t offer so many entertainment or political bets – if any at all. Local betting shops don’t offer odds on what a tech CEO is going to say in the next all-hands meeting.
These types of off-the-wall bets are attracting a new crowd who wouldn’t typically be betting. Speaking to Sigma, CEO and founder of Yield Sec Ismail Vali noted that those under 30 are the most responsive to prediction markets and their current affairs-style event contracts.
“Under-30s don’t think they’re gambling,” he said. “They genuinely believe they’re predicting. Whatever that means, but it’s not gambling when it absolutely is.”
Gambling innovation has a long history of operating in the legal gray areas
Part of the reason why prediction markets have surged in popularity so quickly, and why they’re getting so much pushback now, is because they operate in the legal gray area.
There is virtually no specific regulation for what prediction markets can offer event contracts on, as they’re currently overseen by the Commodity Futures Trading Commission (CFTC), which treats them as derivatives exchanges. Some market leaders like Kalshi are working proactively with the CFTC to keep up this relationship, rather than move to state-by-state regulation like traditional gambling.

“Prediction markets are a perfect example. They borrow mechanics from futures and options markets, behavioral incentives from gambling, and speech-based framing that resembles polling or forecasting. That hybridity creates regulatory ambiguity, which is where innovation thrives.” – Braden Perry, Kennyhertz Perry, LLC, attorney

Prediction markets may be the current example of gambling innovation springing up just past the line of official regulation, but past examples have included sweepstakes, slot machines, daily fantasy sports games, and a wealth of other once-innovative, now-normalized (and regulated) gambling methods.
“Most gambling laws in the US were written to regulate clearly defined activities: casinos, sportsbooks, lotteries, or regulated derivatives markets,” Braden Perry, a litigation, regulatory, and government investigations attorney with Kennyhertz Perry, LLC, explained to ReadWrite. “Innovation happens when a new product doesn’t fit neatly into any of those boxes.
“Prediction markets are a perfect example. They borrow mechanics from futures and options markets, behavioral incentives from gambling, and speech-based framing that resembles polling or forecasting. That hybridity creates regulatory ambiguity, which is where innovation thrives.”
As Perry goes on to note, this is far from incidental. The developers of prediction markets seemingly skirt regulation to create something new, avoiding being weighed down by regulatory ties.
“Developers tend to design products right up to the edge of existing definitions: avoiding ‘chance’ by emphasizing skill or information, avoiding ‘wagering’ by using contracts or tokens, or avoiding ‘consideration’ through alternative purchase mechanisms,” he stated. “This is not accidental. It’s a direct response to highly prescriptive gambling statutes that leave little room for licensed experimentation.”
Where does regulation need to step in?
Prediction markets are in a lightning-in-a-bottle stage right now. With little specific regulation beyond what applies to derivatives exchanges, the playing field is fairly open for experimentation. That’s both a good thing for consumers in terms of offering a lot of variety, but also exposes both users and third parties to potential risk.
“Regulators are often reactive rather than proactive in this space,” Perry continued. “Agencies typically wait for scale, harm, or public visibility before stepping in, especially when jurisdiction is unclear, such as between gaming regulators, securities regulators, and commodities regulators. That delay effectively becomes a window for experimentation.”
A recent example centers around Coinbase CEO Brian Armstrong, who poked fun at prediction markets in the company’s quarterly earnings call on October 30.

lol this was fun – happened spontaneously when someone on our team dropped a link in the chat https://t.co/tQiV3B9jUj
— Brian Armstrong (@brian_armstrong) October 31, 2025

“I was a little distracted because I was tracking the prediction market about what Coinbase will say on their next earnings call,” Armstrong said in his parting remarks, as reported by Bloomberg. “I just want to add here the words Bitcoin, Ethereum, blockchain, staking, and Web3, to make sure we get those in before the end of the call.”
While naturally just being a lighthearted comment, his comment shows just how easily he could manipulate such event contracts. If Armstrong put money on him saying that string of words, he can then easily fulfil said event contract. Make the words something even more random, raise the odds, and he could make even more off the back of it.
There’s no real regulatory framework to prevent anyone from doing this currently, highlighting how such rules are not just prohibitory but also protective for everyone involved. In time, organizations will need to catch up, whether that’s on a state or federal level.
“Historically, this is how many now-regulated products began: daily fantasy sports, online poker, esports wagering, and even early financial derivatives,” Perry said. “Grey areas aren’t a bug in gambling regulation; they’re a structural feature of how innovation tests outdated legal frameworks.”
Featured image: Midjourney
The post Life in the gray: why gambling innovation stems from unregulated areas appeared first on ReadWrite.