Arizona gaming regulators have voiced concern about prediction market platforms that allow users to place wagers tied to real-world developments, warning that the apps carry gambling risks while operating outside the state’s regulatory structure.
Officials say these services enable users to trade contracts connected to future outcomes. The offerings cover areas such as election results, sports performance, legislative decisions and other public events. Some markets even focus on details such as whether a governor will say certain words during a speech or how long a government shutdown might last.
State regulators say those activities resemble gambling even when the platforms present them as trading or forecasting tools.
State Regulators Describe Prediction Markets As Gambling
Suzanne Trainor of the Arizona Department of Gaming said the platforms fall within the same category as gambling products.
“Prediction markets are a form of gambling, so they also carry the same risks,” Trainor said.
She explained that the state regulates sportsbooks and other legal gambling operators through licensing rules that require safeguards related to consumer protection and responsible play. Prediction market companies do not operate within that same system.
“What we do know is that we’re not seeing the same protections for responsible gaming and for gambling in terms of the licensed sports books that do exist,” Trainor said. “They’re playing by the rules. They’re licensed by our office. And so these prediction markets… are not working by the same rules, the same framework as others.”
Regulators have expressed concern that users may not fully understand the difference between state-licensed sports betting operators and prediction market platforms.
Limited Protection For Users
Trainor said users who run into problems with prediction market apps may have limited options for resolving disputes because the platforms are not licensed by the state.
“If someone is thinking, you know, I didn’t get my money from this app, they might call a state regulator, an office like us. And we’re actually not able to, in many cases, help them right away because we don’t have that relationship. They’re not regulated and licensed,” Trainor said.
Research from theAmerican Gaming Association also suggests many users view prediction markets differently from traditional betting. According to the research, 28 percent of prediction market participants say they believe they are “investing,”compared with nine percent of sportsbook bettors.
Trainor said that perception can increase the risk of problematic gambling behavior.
“People viewing it as a side hustle as a means to make money. And what the data does tell us is people with those kind of beliefs are often not able to play responsibly,” Trainor said.
Arizona has sent cease-and-desist letters to some prediction market operators, including Kalshi. The company has previously said it is federally regulated. State officials say they are not opposed to the concept of prediction markets but want them placed under state regulation.
For now, Arizona officials have urged residents to review the differences between licensed sportsbooks and prediction market platforms before using them.
Source:
“Arizona regulators concerned about prediction market betting apps”, kold.com, March 12, 2026
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