As millions of Americans filled out brackets and tuned in for March Madness, something else quietly unfolded alongside the NCAA men’s and women’s basketball tournaments: a massive surge of sports betting on so-called “prediction markets.”
These platforms – operating under the guise of financial exchanges – have taken in hundreds of millions of dollars in wagers tied to March Madness outcomes. But unlike traditional sportsbooks, many of these bets were placed outside the guardrails that voters and lawmakers carefully put in place for other gambling platforms. That includes bets placed by minors under the legal gambling age in their state, and even by users in states where sports betting remains illegal altogether.
That should concern anyone who believes in states’ rights to regulate what goes on in their own backyards, the rule of law, and responsible governance.
Americans did not stumble blindly into legalized sports betting. In state after state, voters and legislators debated the issue and struck a balance where gambling would be permitted, but only under strict conditions. Those conditions include age minimums – typically 21 – consumer protections to prevent addiction and fraud, and tax structures designed to ensure the public benefits from expanded gaming.
Prediction markets are now bypassing that entire framework.
By labeling wagers as “event contracts” and presenting themselves as financial platforms, these companies claim they are not engaged in gambling at all. But the public sees through that distinction. According to a recent Morning Consult poll, 81 percent of Americans say that trading on sports outcomes through prediction markets is gambling, not investing, as prediction markets claim.
The same poll found that roughly three-quarters of Americans believe the financial framing of these platforms masks the real risks, particularly for younger users. And some 77 percent of Americans say prediction market platforms that allow teenagers to bet on sports could increase gambling-related harm among young adults, compared with sportsbooks that require users to be 21.
Even more troubling, these platforms are accessible across state lines, meaning users in states that have explicitly rejected legalized sports betting can still participate. That undermines the authority of states to set their own laws and standards – something conservatives, in particular, have long championed.
This is not an argument against innovation. Financial markets have long played a valuable role in price discovery and risk management. This is about drawing a bright red line. When a product walks, talks, and profits like sports betting, it should be regulated as such.
Calling it something else does not change the underlying reality. It only changes who is and is not held accountable.
If companies are offering wagers on sporting events, they should be required to follow the same rules as every other operator: comply with state laws, enforce age restrictions, implement consumer safeguards, and contribute their fair share in taxes.
Anything less creates a two-tiered system, one where compliant businesses follow the law and others flout states’ rights for profit.
March Madness is supposed to be about fair competition. But what we saw off the court was anything but.
George Landrith is the President of Fairfax-based Frontiers of Freedom and was the Republican candidate for the U.S. House of Representatives from Virginia’s Fifth Congressional District in 1994 and 1996.
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