Prediction Markets vs. Sportsbooks: Why Gambling Addicts See No Difference

By the time the soccer coach discovered prediction markets, he had already blocked himself from sportsbooks. The tax accountant described the experience as "getting the same high" on these platforms as he did from gambling. "That was how I relapsed — with Kalshi and Polymarket. I lost a bunch of money," he admitted.

The rapid expansion of prediction markets has ignited a contentious debate across courts and legislatures nationwide. Operators argue they should be regulated like stock exchanges due to federal law and their peer-to-peer structure. Sportsbooks and state officials, however, insist these platforms should fall under the same scrutiny as sports gambling. While the regulatory battle rages on with no resolution in sight, clinicians treating gambling disorders are sounding the alarm about the growing overlap between sports betting and prediction markets.

Clinicians Warn: The Psychological Impact Is Identical

Experts in gambling addiction treatment report that the end result for patients is often indistinguishable between sports gambling and prediction markets. Two individuals who spoke to The Associated Press—identified by their occupations due to the sensitivity of their situations—shared harrowing accounts of relapsing into prediction markets after taking legal steps to curb their sports betting habits.

"There may be real differences in how these products are defined or regulated, but in the therapy room, we are often seeing the same cycle of anticipation, action and reaction play out again and again," said Dr. Cynthia Grant, vice president of clinical services for Birches Health, a national network of gambling addiction providers.

"I sometimes think of it like different doors into the same room. The label on the door may change, but once someone’s inside, the experience can feel very familiar."

The Path from Sportsbooks to Prediction Markets

While sportsbooks and prediction markets offer similar betting options—such as wagers on games, player performances, and other outcomes—their formats differ significantly. Sportsbooks employ in-house experts to set fixed odds, creating a house-versus-gambler dynamic. In contrast, prediction markets operate as peer-to-peer platforms where traders exchange contracts based on yes-or-no questions. Profits and losses are determined by market movements: winning a "yes" contract when most traders bet "no" yields higher payouts. Prediction markets primarily generate revenue through transaction fees.

For individuals struggling with gambling addiction, both models lead to the same destructive outcome.

The Soccer Coach’s Story: A Cycle of Debt and Relapse

The soccer coach began gambling at 16, starting with small bets against friends in his New York neighborhood. By 18, he was frequenting casinos and placing bets at sportsbooks. Despite mounting losses, he turned to prediction markets, where he quickly fell back into old patterns.

"I would be in all this debt and get a paycheck for $2,000 on a Friday and it would be gone by Saturday or Sunday," said the 21-year-old coach. "I wouldn’t have money to fill up my gas tank." He described struggling with loans and maxed-out credit cards, a cycle he thought he had escaped by blocking himself from sportsbooks.

The Tax Accountant’s Relapse: A Familiar High

The tax accountant, who requested anonymity due to the sensitivity of his situation, described the allure of prediction markets as "the same high" he once got from sports betting. After taking steps to distance himself from sportsbooks, he found himself drawn back into gambling through platforms like Kalshi and Polymarket.

"I thought I had control," he said. "But the rush was too strong. I lost thousands in just a few weeks."

Why Prediction Markets Are a Growing Concern for Addiction Experts

Clinicians like Dr. Grant emphasize that the psychological mechanisms driving gambling addiction—anticipation, risk-taking, and the thrill of a potential payoff—are present in both sportsbooks and prediction markets. The accessibility and anonymity of online platforms further exacerbate the problem, making it easier for individuals to hide their habits from loved ones.

"The language may change, but the experience doesn’t," Dr. Grant explained. "Whether it’s a sportsbook or a prediction market, the brain chemistry and behavioral patterns remain the same."

Regulatory Gray Area Leaves Vulnerable Users Unprotected

As the debate over regulation continues, gambling addiction specialists urge lawmakers to consider the human cost. While operators of prediction markets argue for lighter oversight, citing their peer-to-peer structure and federal exemptions, clinicians warn that the lack of standardized safeguards leaves users—particularly those in recovery—exposed to relapse.

"We’re seeing patients who were stable in recovery suddenly spiral after discovering prediction markets," said Dr. Grant. "These platforms are marketed as innovative and sophisticated, but for someone with a gambling disorder, they’re just another way to lose control."