An association of doctors in Texas has raised concerns over the current form of prediction markets, arguing that these businesses are now actively contributing to gambling addiction, and that more needs to be done to safeguard consumers, mostly through tighter regulatory measures.
Texas Doctors Worry about Proliferation of Prediction Markets – Urge More Protective Measures
Dr Lindy McGee, an assistant professor at Baylor College of Medicine and the former chair of the Child and Adolescent Health Committee for the Texas Medical Association, has highlighted those risks, arguing that prediction markets are so proliferated that high school seniors can legally access “Vegas” when they wish to.
“They can bet on just about anything,” Dr McGee added. McGee acknowledges that prediction markets are not technically gambling, which has been one of the debates in the United States, with sector companies pushing back against state and regulatory attempts to shoehorn them into this specific definition.
Only recently, a federal judge struck down a request for preliminary injunction that Kalshi sought against the state of New York and its gambling regulator over the temporary prohibition of offering sports event contracts locally.
“Although they technically, legally don’t fall under the category of gambling, I’m going to stress that prediction markets, like they’re used today, they’re no different psychologically than any other type of gambling,” McGee further explained.
In order to safeguard consumers, and especially young and vulnerable people, the Texas Medical Association suggests at least several prominent changes to the current regulatory climate for prediction markets.
For starters, famous people should be prohibited from advertising such platforms, the association argued. Furthermore, prediction markets must be accessible only to individuals aged 21 or older.
Advertising should also be prohibited close to schools and parks, but also extend to social media. McGee explained that the reality is that teenagers and younger people are simply far more likely to develop a gambling-related problem because of engaging with these products early in their lives.
“This is a smoldering problem that is going to become a huge fire within the next couple of years,” McGee explained.
“But we do know in general with gambling that it is very prevalent in the adolescent and young adult population that it can have devastating effects, especially a risk of suicide,” the doctor further explained.
Prediction Markets Not Happy with States Attempting Local Regulation
For their part, prediction market platforms have been wary of states attempting to spearhead regulation against the sector, with the main operators doubling down on the familiar argument that their products ought to be regulated under the Commodity Futures Trading Commission (CFTC).
While arguing that they are not gambling, Kalshi, one of the most prominent platforms in the United States and worldwide, has joined the National Council on Problem Gambling (NCPG).
The company’s admittance has caused an internal rift, resulting in the Michigan Gambling Control Board (MGCB) leaving over the mismatch between stated goals by the NCPG and the prediction market company’s addition.