Kalshi and Crypto.com recently unveiled a new national alliance of prediction market operators named the Coalition for Prediction Markets (CPM). This initiative includes well-known players such as cryptocurrency exchange Coinbase, retail trading platform Robinhood, and sports gaming operator Underdog.
The establishment of this coalition comes amid a significant surge in the U.S. prediction market landscape, particularly following a federal court’s decision last year to dismiss a longstanding prohibition on election betting. This legal change has sparked increased investor interest in prediction markets, leading to a boom in activity within the sector.
Nick Jones, the founder of crypto firm Zumo, emphasized the importance of the coalition, stating, “This was the catalyst for growing investor interest, and this new coalition will further legitimize the sector, strengthening operating rules and setting a higher bar for integrity standards.”
Prediction markets allow users to trade binary contracts based on potential outcomes in various areas, including politics, sports, economics, and entertainment. The rising interest from major firms like Robinhood and Underdog indicates that investors are increasingly viewing prediction markets as a viable growth area. However, there are critics who liken these platforms to mere online gambling.
Matt David, an executive board member of CPM, remarked on the unique position of the U.S. in prediction markets, saying, “The U.S. is the biggest frontier for prediction markets, and the momentum we’re seeing makes a unified industry voice not just important, but necessary.”
Both Kalshi and its competitor Polymarket have experienced rapid growth, with Kalshi’s valuation reportedly more than doubling to $11 billion following its latest funding round. The coalition aims to address various challenges facing the industry, including advocating for a strengthened federal framework for prediction markets, establishing nationwide standards to prevent insider trading, and countering state-level regulations that could hinder market operation.
Sara Slane, head of corporate development at Kalshi and an executive member of the coalition, stressed the importance of a solid regulatory environment. “We spent years working with the CFTC because prediction markets must operate with strong federal safeguards that prevent insider trading, protect consumers, and ensure these markets remain transparent and corruption-free.”
The coalition has indicated that more companies are currently in discussions to join the effort, signaling a potential expansion of the alliance.
